Nextleaf Solutions Ltd (CSE:OILS) (OTCMKTS:OILFF) has entered into a patent licensing agreement with a British Columbia-based cannabis process equipment distribution company.
The agreement allows the licensee to commercialize and distribute three of Nextleaf’s issued and pending patents related to post-extraction cannabis processing equipment.
In addition to the intellectual property, Nextleaf said it will provide the company with initial working capital and strategic support as part of the agreement. In exchange, Nextleaf will receive a 20% royalty, which it projects could yield more than $3 million in 2020.
"We believe this is an ideal partnership with a company whose management has a proven track record of building one of the industry's largest cannabis processing equipment distributors," Nextleaf CFO Charles Ackerman said in a statement. "This deal allows OILS to continue its work to efficiently monetize its patent portfolio globally. It also brings closer to its previously announced goal of $5 million to $10 million in gross revenue from IP licensing alone in the next 12 months. We believe IP licensing has the potential to represent up to 10-20% of our gross annual revenue," continued Ackerman.
In addition to IP licensing, the company reiterated its focus on assisting its Health Canada-licensed cannabis processor Nextleaf Labs Ltd in reaching full commercial production, including the sale of bulk CBD and THC oils. Nextleaf said it expects to announce additional commercial agreements in the first quarter of 2020.
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