Canada house drops JV with Nutritional High In October of 2018, Abba entered into a Joint Venture with Nutritional High International Inc. (“NH”) for the joint development of extraction capabilities within Abba’s licensed facility in Pickering, Ontario (the “JV”). The JV contemplated certain funding obligations by both Abba and NH, certain operating project costs to be included at the JV level, and an equal profit share between Abba and NH. Canada House management has determined that participating in the oils and extracts market is part of the Company’s core strategy, however, the economics contemplated under the JV do not sufficiently compensate Abba for its existing licenses, the proximity of its licensed facility to the Greater Toronto Area, and the expertise of its existing staff. As such, and in light of the Company’s current focus on protecting its Balance Sheet, the Company has decided not to pursue the JV under its current terms.
Given Canada House’s intention to offer oils and concentrate products to medical patients and provincial distributors in an expedited fashion, the Company has developed a relationship with an Ontario based licensed producer focusing only on extraction (the “Extraction Partner”). Under the terms of the relationship, the Extraction Partner will make available to Abba bulk transferred oils and tinctures for sale through Canada House’s distribution network and will contract manufacture white label products for Abba. Canada House will incur no capital expenditure to bring these products to market. Abba is currently working with Health Canada to amend its license to allow for the sale of oils and concentrate products. The Company expects, license permitting, to have these products available for sale to provincially authorized distributors and registered Abba patients during CYE Q1 2020.