Erin Resources (ASX:ERI) announced that MGC Pharmaceuticals has secured the option to acquire a license to grow its proprietary Sativa L Cannabis (Hemp) strain in Namibia.
As quoted in the press release:
The option has been secured through one of the MGC founder’s existing business operations in Namibia which has been awarded the license. This option has been secured to roll the Namibian production license into MGC’s operations as part of the existing MGC acquisition consideration terms agreed with Erin, for no additional consideration. The MGC operations and initial production facilities are currently being established in Slovenia, following key commercial license approvals in the region announced on 11 June 2015, to enable the company to grow for up to eight (8) months of the year in the Northern Hemisphere outdoor operations.
- MGC secures option with Namibian company to acquire license to grow Sativa L Cannabis (Hemp)
- Provides immediate access to low cost growing operation in legal Cannabinoid (CBD) jurisdiction
- Material impact on near term cashflow‐ potential 50% increase in MGC operating cashflow from 2017
- Ability to quickly increase to full 12 month production cycle (from current 8 months in Slovenia)
- Namibian CBD license will permit MGC to grow an unlimited amount of product for processing and trade
- MGC’s existing CBD import/export license will enable increased target production of CBD resin in Slovenia and distribution under existing and future commercial offtake agreements
- Forms a key part of MGC’s strategy to establish operations in the Northern and Southern hemispheres ‐ enabling crops to be grown 365 days of the year
- Accelerates discussions with additional CBD offtake partners
- Strong support from the Namibian Government who welcome the investment in the region
Nativ Segev, CEO of MGC Pharmaceuticals, commented:
Securing the option to establish a growing operation in the Southern Hemisphere provides MGC with the ability to become a supplier of CBD extract all year round. By diversifying our operations geographically we will be able to generate cash flow to the business all year round. We also expect to be able to fill orders for CBD in countries where the supply dwindles out of season, making MGC a preferred supplier to many cosmetics and pharmaceuticals companies who require a constant supply of CBD.