Vancouver, British Columbia--(Newsfile Corp. - September 26, 2019) - FSD Pharma Inc. (CSE: HUGE) (FSE: 0K9) (OTCQB: FSDDF), through its wholly-owned subsidiary FV Pharma, has signed a letter of intent with World Class Extractions (CSE: PUMP) (FSE: WCF) to create a joint venture to develop, manage and operate a cannabis extraction and processing facility in Cobourg, Ontario. FSD Pharma and World Class Extractions will each hold a 50% interest in the new joint venture, with each company nominating 2 of the 5 directors, with the 5th director being independent.
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The joint venture is expected to enter into a 5-year lease, commencing December 1, 2019, with FV Pharma for up to 5,000 square feet of licensed indoor space with an option for an additional 5 years and include provisions for expansion.
Extraction operations to extract various cannabidiol and other valuable elements from cannabis and hemp plants will commence following the installation of 3 Boss Extraction systems by World Class Extractions' subsidiary Soma Labs Scientific, who will provide the Joint Venture with all of the extraction and processing equipment required, assuming all direct costs.
The patent-pending Boss Extraction system provides proprietary systems and methods for producing cannabis extracts. Its technology can perform sub-critical CO2 extraction; combining proprietary max flow technology with advanced thermodynamics, automated features, and an exclusive plug and play design. Each Boss system can process up to 200 lbs of dry biomass per day, producing extracts that have substantially greater concentrations of target cannabinoids while possessing minimal contaminants.
The Boss Extraction system is intended to provide third-party Licensed Producers with access to the technology needed to extract oil for value-added product production. Once operational, the extraction machinery will be managed and operated by FSD Pharma, with both parties funding operating costs and expenditures associated with the Joint Venture.
FSD Pharma has agreed to allocate additional finished space as required to expand the facility to accommodate the installation of World Class Extractions' Small Beast, a large capacity ethanol extraction system, along with all the required peripheral equipment for the processing of crude into refined products.
Dr. Raza Bokhari, Executive Co-Chairman and CEO of FSD Pharma, stated: "This is an important development for FSD Pharma, allowing the Company and World-Class to establish a processing center for on-site extraction of oil-based products and extracts at our Facility in Cobourg in 2019. Using FV Pharma's processing license, the Joint Venture can begin processing once the Boss Extraction Systems are installed and our agreement is finalized. This Joint Venture provides us with additional revenue opportunities as we process our pharmaceutical-grade cannabis flower into high-quality oil-based products to meet the increasing demand for such products in the medicinal space."
Rosy Mondin, CEO of World-Class Extractions, stated: "World-Class is thrilled to be the official extractor of FV Pharma, while opening up our processing operations to other Canadian producers. The toll processing model is economical as license holders can create valued added cannabis oil derivative products under their corporate brand(s) without major expenditures on in-house extraction machinery or requiring a processing license. This milestone is incredibly significant as World Class is now ready to accept new tolling contracts and officially begin to generate revenue in the near term."
FSD Pharma is focused on the research and development of novel cannabinoid-based treatments for several central nervous system disorders including chronic pain, fibromyalgia and irritable bowel syndrome, and on the development of the highest quality indoor grown, pharmaceutical-grade cannabis.
FSD Pharma has 25,000 square feet licensed to cultivate cannabis at its Cobourg, Ontario facility, the former Kraft plant, which sits on 70 acres of land with 40 acres primed for development, and an expansion capability of up to 3.9 million square feet. FSD's wholly-owned subsidiary, FV Pharma, is a licensed producer under the Cannabis Act and Regulations, having received its cultivation license on October 13, 2017 and its Sale for Medical Purposes license on June 21, 2019.
For more information, please visit the company's website, www.fsdpharma.com, or contact Zeeshan Saeed, President and Founder at 416-854-8884 or email zeeshan@fsdpharma.com. For investor relations in Canada email IR@FSDpharma.com. In the United States, contact Miriam Weber Miller of LHA Investor Relations, who can be reached at 212-838-3777 or by email at MMiller@lhai.com.
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