Momentum Public Relations
Press Releases: May 30th, 2019
CROP INFRASTRUCTURE CORP. (“CROP” or the “Company”) (CSE: CROP) (OTC: CRXPF) (Frankfurt: 2FR) announces today that ELITE VENTURES GROUP, LLC (“Elite”), a Nevada limited liability company in which CROP holds a 49% membership interest, in partnership with its licensee THE HEMPIRE COMPANY, LLC (“Hempire” and, together with Elite, “Elite & Hempire”), has entered into a supply agreement (the “Supply Agreement”) with BIOSCIENCE ENTERPRISES, INC. (“Bioscience”), a California based cannabidiol (“CBD”) isolate distribution company, to supply Bioscience with an aggregate of USD$89,500,000 in CBD isolate, with deliveries required to commence in November, 2019 and ending in March 2020, upon completion of the Supply Agreement’s initial five-month term (the “Initial Term”).
Pursuant to the terms of the Supply Agreement, Elite & Hempire have agreed to provide certain amounts of CBD isolate, on a monthly basis, to Bioscience on an agreed upon per kilogram price in consideration for:
- a USD$525,000 deposit payable upon entry of the Supply Agreement (paid);
- a second deposit of USD$350,000 due within thirty (30) days of entry of the Supply Agreement; and
- USD$875,000 due upon confirmation of the first Shipment (the “Third Deposit” and, collectively, the “Deposits”).
The Deposits are to be applied against the balance of first Shipment. In the event Elite & Hempire fail to deliver the first Shipment, Bioscience is entitled, at its sole discretion, to either the full repayment of the Third Deposit or have the proceeds of Third Deposit converted into common shares in the capital of CROP (each, a “Share”) at a price discounted 20% to the closing market price of the Shares on November 15, 2019, subject to a floor of $0.30 per Share.
Prior to each Shipment, Bioscience shall deposit 10% of the value of the CBD isolate of the subject Shipment (USD$1,900,000) into an escrow account held by Bioscience. The balance of each Shipment (USD$17,100,000) is due and payable within thirty (30) days of the receipt (“NET 30”), by the parties, of testing results for heavy metals, residuals, pesticides and microbial content in addition to a minimum 99.5% purity rating. The CBD isolate is to be sent for testing within three (3) business days of its delivery to Bioscience’s distribution center. During the NET 30 period, Elite & Hempire shall maintain title of the CBD isolate.
All proceeds generated from the sale of the CBD isolate to Bioscience under the Supply Agreement are to be distributed among the members of Elite pro rata to each members’ respective membership interest (approximately USD$43,855,000 for CROP’s 49% membership interest in Elite).
Bioscience has the sole right to extend the Initial Term for an additional two months (until May, 2020) on the same terms disclosed above (an additional USD$38,000,000 in value). The total anticipated value of the Supply Agreement, if the Initial Term is extended, is expected to be approximately USD$131,500,000.
Elite’s Nye County, Nevada CBD farm spans approximately 2,200 acres with 1,350 acres under pivot irrigation using organic growing methodologies. The 2019 cultivation is expected to produce 10-20% CBD genetic hemp-CBD which is expected to be extracted and isolated to produce a minimum 99.5% pure CBD isolate. Based on calculations of the Company’s grow consultant and assuming a minimum average of 10% CBD content, the Supply Agreement will represent ~35% of the farm’s potential CBD isolate yield from its 2019 cultivation. The parties plan to work together not just within the parameters of the Supply Agreement, but also to expand the Supply Agreement to include new high-yield cannabinol (“CBN”) and cannabigerol (“CBG”) isolates in order to provide new SKUs for Bioscience and to help foster a long-term partnership for the Company, its subsidiaries and stakeholders.
In connection with the Supply Agreement, CROP has agreed to pay an introduction fee of 1,333,333 Shares at a deemed price of CAD$0.30 per Share to a third party finder who introduced Elite & Hempire to Bioscience. All securities issued in connection with the Supply Agreement are conditional upon the approval of the Canadian Securities Exchange (“CSE”) and will be subject to a statutory hold period of four months and a day.
Richard Parker, President of Bioscience stated: “We are thrilled to be working with such an innovative group as CROP on a partnership that we hope will flourish within the progressing CBD industry. Having the best products on the market is what we believe makes Bioscience stand out as a reputable supplier, and without producers like CROP that would not be possible.”
Michael Yorke, CEO of CROP stated: “While the monetary value of the Supply Agreement is significant for CROP and its stakeholders, the relationship we are building with the team at Bioscience is key to our continual efforts to become a key player in the CBD production space and the development of new strains of product for isolation which will complement Bioscience’s industry-leading clientele and what both Bioscience and CROP believe will be in demand in 2020, 2021 and far beyond.”
About Bioscience
Since its inception in 2018, Bioscience has emerged as a major contender in the CBD supply business. Native to California, Bioscience has contracts across the continental USA and Canada for the supply of European Union and domestic grade isolate, oil and aerosol CDB in white label or specialized labeled products. Bioscience prides itself on having the purest CBD supply on the market today brought through a world class quality assessment and quarantine process.
About CROP
CROP is a publicly listed company trading on the CSE under the symbol CROP. The Company is focused on owning a portfolio of cannabis branding, CBD and real estate assets through its wholly and partially-owned subsidiaries. CROP’s portfolio of projects includes cultivation properties in California, two in Washington State, a 1,000-acre Nevada cannabis farm, 2,115 acres of Hemp CBD farms, and a growing portfolio of share equity in various companies within the cannabis space.
CROP has developed a portfolio of assets including Canna Drink, a cannabis infused functional beverage line and 16 cannabis brands.
Company Contact
Michael Yorke – CEO and Director
E-mail: info@cropcorp.com
Website: www.cropcorp.com
Phone: (604) 484-4206