Auxly Cannabis Group has entered into a hemp cultivation and purchase agreement pursuant to which the Company has agreed to act as the financial sponsor for the development of a hemp farming co-operative consisting of six individual hemp licence holders pursuant to the Cannabis Act (collectively, the “Hemp Farmers”) located in Prince Edward Island.
To date, the Company has funded $4.5 million of the approximately $6 million it will advance and the Hemp Farmers have planted nearly 300 acres of hemp, which they expect to result in approximately 100,000 kilograms of hemp biomass. Pursuant to the Agreement, Auxly’s wholly-owned subsidiary, Dosecann is entitled to purchase all of the hemp cultivated by the Hemp Farmers in 2019 at a preferential price relative to current wholesale market rates; the funds advanced by Auxly toward the development of the project will act as pre-payment for any future hemp purchases by Dosecann. The Company expects the initial hemp harvesting to commence later this fall, at which point the hemp will be tested, milled and stored pursuant to Dosecann specifications prior to delivery to Dosecann for extraction and manufacturing into final finished products.
Hon. Bloyce Thompson, Minister of Agriculture and Land for Prince Edward Island, commented: “We are incredibly excited to have the finest farmers in Canada cultivating hemp at home in PEI. I had the great opportunity of visiting the farm and seeing first-hand the 300 acres that have been planted, and I’m incredibly impressed by the technologies and advancements that the Hemp Farmers bring to the Island.”
“We are very excited to partner with experienced farmers in the province of PEI,” said Hugo Alves, President of Auxly. “I’m proud of our Dosecann team for finding this opportunity and being able to demonstrate our continued support for Atlantic Canada.”