Here’s the press release. They are setting up a JV in Canada. We wonder if it is just a first step to create a back door for China to start exporting their hemp into Canada ? Remember China always plays the long game.
Vancouver, British Columbia–(Newsfile Corp. – May 29, 2019) – Benchmark Botanics, Inc. (CSE: BBT) (FSE: BBW) (OTC Pink: BHHKF) (“Benchmark”, “BBT” or the “Company”) a federally-licensed producer and distributor of medical-grade cannabis, is pleased to report that it has signed a definitive agreement with China-based Zhejiang Yatai Pharmaceutical Co., Ltd. (“Zhejian Yatai “), a publicly listed company on the Shenzhen Stock Exchange (stock code: 002370), to set up a joint venture company in Canada.
Subject to compliance with relevant Canadian Cannabis Laws, the new company will explore business opportunities in the Cannabis industry to become involved in cultivation, manufacture, processing, and marketing of high cannabidiol (“CBD”) cannabis products; in the cultivation and R&D of medical cannabis; and in the extraction, isolation, and purification of high-CBD cannabis oil for commercial applications. This definitive agreement solidifies the terms of the Letter of Intent of Strategic Cooperation between Benchmark and Zhejian Yatai, which was reported in a news release on May 7, 2019.
“This agreement with Zhejiang Yatai is a significant milestone for Benchmark Botanics,” said William Ying, CEO of Benchmark Botanics. “Zhejiang Yatai is a Top 500 Chinese corporation and is a leader and an innovator in the pharmaceutical industry. Benchmark is the perfect partner to take Zhejiang Yatai’s drug research and development, production and sales in the pharmaceutical field and synergize with Benchmark’s expertise in cannabis cultivation and extraction.”
On May 27, 2019, the companies signed the definitive investment cooperation agreement, whereby the parties agreed to set up the new joint venture company in Canada. The new company will have a share capital of $14 million CAD, of which Zhejiang Yatai will invest $7 million CAD cash, accounting for 50% of the new company’s share capital; BBT will cause its wholly-owned subsidiary Potanicals Green Growers Inc. (“PGG”) to use its existing Health Canada issued license to apply for a license for property to be acquired by the new company (the “Facility”) for cannabis cultivation, processing, and sale thereon and in exchange BBT will receive 25% of the new company’s share capital (with a cash equivalent of $3.5 million CAD); and Rippington Investment (“RI”) will invest $3.5 million CAD, accounting for the remaining 25% of the new company’s share capital.
Objective of the Agreement
The objective of the Investment Cooperation Agreement is to explore business opportunities in the Cannabis industry, subject to compliance with Canadian Cannabis and Hemp Regulations and Act, to become involved in cultivation, manufacture, processing, and marketing of high CBD (cannabidiol) cannabis products; the cultivation and R&D of medical cannabis; and the extraction, isolation, and purification of high-CBD cannabis oil for commercial; and any other activities as approved by the Board of Directors. Future products from the joint venture company may also be marketed, sold and distributed in countries and jurisdictions where cannabis products are legal.
Primary Components of the Joint Venture
The company name will be YATAI & BBT Biotech Ltd.
A limited liability corporation is to be established pursuant to the laws and regulations of Canada with the company’s first issue of 14 million shares will be made as follows:
- Yatai Pharmaceutical will purchase 7,000,000 shares for $7,000,000 CAD, representing 50% of the initial issued shares. The contributions will be made in two stages. In the first stage Yatai Pharmaceutical will contribute $4 million CAD and in second stage Yatai Pharmaceutical will contribute $3 million CAD.
- BBT will receive 3,500,000 shares, representing 25% of the initial issued shares, by causing PGG to use its existing Health Canada issued license to apply a license for the Facility for cannabis cultivation, processing, and sale. The shares will be issued at the time of the joint venture company’s incorporation.
- RI will purchase 3,500,000 shares for $3,500,000 CAD, representing 25% of the initial issued shares. The contributions will be made in two stages. In the first stage RI will contribute $2 million CAD and in second stage RI will contribute $1.5 million CAD.
The company’s business scope will be to explore business opportunities in the cannabis industry, subject to compliance with the Canadian cannabis legislation and regulations, promote high content of CBD industrial hemp cultivation, cultivation, processing, marketing and medical cannabis cultivation, research and development and high purity CBD-based cannabinoid extraction, separation, purification and commercialization of multi-field applications and other activities to be determined by the company.
The joint venture company will make full use of the existing resources and the company’s experience in the field of drug development, promote the cultivation of high content of CBD industrial hemp cultivation, processing, marketing, research and development of medical cannabis and high purity CBD-based cannabinoids extraction, separation, purification and development.