Nextleaf Solutions Ltd (CSE:OILS) (OTCQB:OILFF) announced Thursday that its pending acquisition Nextleaf Labs has signed a cannabis extraction agreement with a well-known Ontario producer.
Under the terms of the deal, the client, which operates a 10-acre cannabis cultivation greenhouse will provide cannabis biomass, which Nextleaf Labs will process into refined and distilled THC and CBD oils using the company’s proprietary extraction technology.
Nextleaf Labs will supply the oils to the wholesale market, and the net proceeds will be shared between the two parties, which Nextleaf Solutions believes could generate as much as C$16 million in gross revenue for the company.
The agreement will expire after either one year or whenever 15 metric tons of biomass has been delivered.
"Our stakeholders have been eagerly awaiting the commercialization of Nextleaf Solutions' proprietary extraction technology,” Nextleaf Solutions CFO Charles Ackerman said in a statement. “We are pleased Nextleaf Labs' first large cannabis extraction agreement is with such a strong cultivator, who has been an early industry leader producing exceptional quality product at a large scale.”
Nextleaf said it believes there’s a significant opportunity to monetize lower-grade cannabis materials into high-purity distilled oil. By investing in technology, Nextleaf is able to deliver efficient, scalable, low-cost solutions to business-to-business partners and customers, the company said.
"We believe we are delivering on the overall mission of building a fundamentally-sound company that operates one of the most efficient, technology-driven cannabis oil refineries in Canada, and we look forward to taking the business into the next phase of growth," Ackerman added.
Nextleaf Solutions, based in Vancouver, owns a portfolio of 15 issued patents and over 60 pending patents for the extraction, purification, and formulation of cannabinoids.
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