Under the agreement, BevCanna will gain access to seed preservation company Phemone One Corp’s extensive live genetic cannabis library. The infused beverage company will also be able to use proprietary formulations, standard operating procedures and farming data from private label nutrient company Norstar Nutrients Ltd.
The parties plan to enter into a definitive agreement within 45 days of the letter of intent, according to a statement by BevCanna.
READ: BevCanna Enterprises enters into deal to manufacture CBD wellness beverages for Marianna Naturals
Phenome One boasts one of Canada’s largest live genetic cannabis libraries of over 350 cultivars that have been tested for nearly 30 years. The company will also identify, breed, enhance and preserve the existing library of cultivars using genotype and phenotype selection from BevCanna's current inventory of seeds, cultivars or genetic material.
Breeding programs will be focused on genetic development of existing cultivars for geographic and environmental conditions at Anarchist Mountain, Osoyoos, BevCanna said, with an emphasis on results of production yields and laboratory analysis that demonstrate high CBD, THC and specific medicinal cannabinoid and terpenes.
Norstar’s nutrient formulations and regimes are customized to the elite library of production cultivars, and standard operating procedures for feed and specific plant nutrient schedules will also be provided for selected cultivars.
"This agreement will provide a unique advantage to BevCanna, in that we'll gain access to both Phenome One's extensive genetic cannabis library and Norstar's proprietary formulas," said John Campbell, chief strategy officer at BevCanna in the statement.
"We're also excited to leverage their significant expertise in optimizing our existing cultivars, increasing our overall cannabis yield projections."
The term sheet for the definitive agreement stipulates that BevCanna would issue 2 million shares and an additional Nutrient Development definitive agreement that will be entered into at the same time as the definitive agreement. The firm will issue a further 2 million shares within 45 days prior to planting its 2021 outdoor cultivation harvest and Phenome’s due diligence. BevCanna will offer an additional 3% royalty on gross revenue from sales derived from Phenome’s library or BevCanna’s cultivars that Phenome genetically enhances.
In other news, BevCanna also said it had settled a $22,500 debt to two creditors for consulting fees and a signing bonus in respect of an advisory board appointment in exchange for 75,000 shares priced at C$0.30 each.
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