Cann Global Limited has entered into a Heads of Agreement (H.O.A.) with the South African company Koegas Medicinal Herbs to establish a Joint Venture (CGB to hold 70%) in medicinal Cannabis production and distribution in Africa, which includes local South African medicinal cannabis applications, in respect to four (4) strategic locations in South Africa. This JV is to be entered into through a new subsidiary company of CGB named Cann Global South Africa (CGSA).
"The Board considers Africa to be a potentially huge emerging market, and has considered of strategic importance to establish a base in Africa for distribution of CGB's existing and future products and with the goal of producing and distributing locally in Africa as well," they explain. "This new JV adds significantly to the existing established global network of CGB in Australia, Asia, North America and Israel in accessing the emerging African markets as well."
"This agreement ensures access to significant land packages totalling over 1,500 acres with in-place access to power and irrigation for both greenhouse/indoor and broad-acre/outdoor growing opportunities," the team with the company explains."South African legislation provides for a well-regulated (Medicines Control Council of South Africa) medicinal cannabis and hemp growing environment which can potentially transform CGSA into a major producer of high yielding, low cost medicinal cannabis (including targeted cannabinoids CBD and CBG) and hemp."
"The South African opportunity should assist CGSA to fast track its production status for extracted cannabis (CBD and CBG) and hemp raw products to meet local and international order requests. CGSA's partner in the South African applications, Koegas, have well established stakeholders operating in the agricultural and regulatory environments to ensure all necessary requirements of the applications are completed and processed in a timely manner.
Heads of Agreement between Cann Global Limited and Koegas Medicinal Herbs
According to them, under the Heads of Agreement entered into between the parties: "The Company will set up a wholly owned subsidiary, Cann Global South Africa (CGSA). CGSA will enter into a formal 70/30 JV partnership agreement with Koegas," they further explain. "CGSA will set out a key development business plan and funding parameters in respect of working exclusively with Koegas to develop the South African medicinal Cannabis and Hemp project which will include Koegas' applications for the 4 relevant licenses from the MCCSA. (Medicines Control Council of South Africa)."
"In consideration for its 70% share in the JV, CGB will issue 10 million fully paid ordinary Shares at the direction of Koegas. "The products produced and developed on the relevant licenses are intended to be sold in the South African and Global markets. CGSA will fund the joint venture and will include key milestones to be met to ensure the timely development of the licenses. Subject to regulatory approvals CGB intends to raise money directly into CGSA with the view to independently list CGSA on the ASX. In the event that Cann Global elects to proceed with this strategy, it is intended that a priority allocation of shares will be reserved for existing shareholders of CGB."
"As part of the joint venture, Koegas will manage all necessary local personnel, logistics, government support and other necessary resources on a transparent cost basis whilst CGB will provide its technical, regulatory and operational expertise, including intellectual property for plant and product development, including its genetics subject to regulatory approvals. CGB will also utilise its Australian and overseas networks to distribute products grown and processed under the joint venture agreement."