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Tech Junior Taps into Cannabis Revenue Stream

Jon Brown Jon Brown, Stockhouse
0 Comments| November 14, 2018

Canadian tech Company EnerDynamic Hybrid Technologies Corp(TSX: V. EHT, OTCQB: EDYYF, Forum) is a
Click to enlarge developer of proprietary, turn-key technologies that serve as bankable and sustainable energy solutions, which can be implemented anywhere. Most recently, these assets have come to benefit the cannabis industry and its related derivatives.

EHT just announced that it has signed a Manufacturing and Supply Agreement with cannabis cultivator hi!farms to deliver its custom Controlled Environment Agricultural Units (CEAU) to the cultivator’s new facility in North Bay, Ontario.

EHT has been well covered on Stockhouse through the development of its ENERTEC module structures, which boast full integration of smart energy solutions. Using a proprietary skin and foam core that is stronger than traditional wood or steel structural insulated panels, the Company provides high thermal energy efficiency in structures where no electrical grid exists.
This deal with hi!farms offers substantial reoccurring revenue for the Company, who will also receive a share of the net profits of medical cannabis sales from every unit, on a 50/50 basis (following repayment in full of original sale price) with hi!farms, for the next six years. Let’s take a closer look at how this agreement will benefit both companies.

EHT will supply 32 CEAUs to H!farms to cultivate medicinal cannabis. The Phase 1, units are expected to be complete by the end of Q2 2019. A further 270 units are set for Phase 2 of the project, which is expected to be complete by Q1 2020. The phase 1 CEAUs represent manufacturing revenues in excess of more than $6.3 million for EHT. Annual production from the 32 CEAUs is predicted to be 18,000 lbs. at $1,500/lb of sellable medicinal grade cannabis, each unit is expected to generate approximately $600,000 a year in net revenue of which EHT will receive 50%. After full payment of the 32 units EHT would receive $9,600,000 in revenue per year for the balance of the 6 year contract.

EHT CEO John Gamble stated that “We are confident that we can deliver leading edge grow units to hi!farms and that the risk associated with initial purchase price deferral is more than offset by the long-term recurring revenue benefit.”
Solar power is becoming more popular and EHT’s flagship ENERTEC Embedded Solar Roof Module has addressed two major concerns among consumers: cost and weight.

The ENERTEC system is a cheaper and lighter product than what is typically found on the market, however it also covers a new hurdle that has risen for the legal cannabis industry in particular – power consumption.

It has been estimated that it takes the same amount of power to make a pound of cannabis product as the average Canadian household consumes in roughly two months and EHT’s solar systems are capable of producing more energy than a home requires. This allows that structure to become either a battery storage system on its own, or a source of power for the local micro grid.

Click to enlarge

This is no doubt beneficial for its latest partnership with hi!farms. The cultivator has been negotiating agreements to supply medical grade cannabis to academic, medical, and distribution partners for research and sales in its home province. It is in the business of developing comprehensive vertical cultivation technologies for the production and sale of cannabis and its related derivatives (dried flower, concentrated oils, and capsules for the medical market).

These cultivation technologies include solutions for everything from irrigation systems, to nutrient delivery mechanisms, to lighting (natural and artificial) and environment control. Turn-key components include comprehensive technical drawings, working beta units and production-ready components of within cultivation systems and sub-systems. This includes direct sales to licensed consumers as well as wholesale sales to other licensed producers throughout Canada and the world.

The CEAU's are designed by H!Farms with patent applications in process and patent applications for its’ other technologies are in process.

FULL DISCLOSURE: EnerDynamic Hybrid Technologies is a paid client of Stockhouse Publishing.

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