EuroLife Brands Inc (CSE:EURO) (OTCMKTS:EURPF) is confident about its potential growth in Europe as it revealed that negotiations to finalize a binding letter of intent (LOI) to acquire a 20% interest in a state-of-the-art industrial hemp cultivation operation near Dresden, Germany, continue as planned.
In a corporate update, the company said that via "sustained strategic deployment of capital and unification of synergistic assets", it aimed to become amongst the largest cultivators of hemp in Europe.
The Dresden hemp deal is expected to be finalized in the first quarter of 2020 and the partners aim to maximize the value of the 110,000 kilograms of existing hemp biomass that is currently on hand, EuroLife added.
It also noted that building on recent announcements with AgraFlora Organics International Ltd., Champignon Brands Inc., and Yield Growth Corp., management was assessing a number of ancillary product streams.
"In addition to standard CBD extraction for use in varying consumable products, investigation into high value end-points such 'eco-friendly' sustainable paper and plastic packaging alternatives, fiber and textiles, and animal feed are possible product lines to capture additional margin," added the firm.
With a population of over 700 million citizens, with over 500 million in the EU alone, the European opportunity afforded within the hemp and cannabidiol marketplace is substantial, reckons the group.
The firm reckons that as the cannabis industry matures and normalization takes hold, those organizations equipped with low-cost production, combined with tactical downstream high-margin capability will prevail.
In a recently published report on cannabis, Prohibition Partners, notes EuroLife, predict that the number of medical cannabis patients in Germany will rise to 1 million by 2024, the total medical cannabis market value growing to €7.5 billion by 2028, and adult-use consumption increasing to €16 billion by 2028.
"We are making great progress toward our goal of becoming a vertically integrated cannabis company operating in the hemp, CBD and health & wellness sectors," Shawn Moniz, CEO of EuroLife, said in a statement Tuesday.
"Industry reports continue to indicate the European medical and adult-use cannabis markets are significant with the German market leading the pack," he added.
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