LiveWell’s CBD investments catch the eye of Canopy Growth
LiveWell Foods Canada Inc. (TSXV:LVWL) signed a supply agreement on Wednesday, the company’s first. The CBD company will export a minimum of 5000 kilograms of CBD isolate to Brazil over the next year. At $7000 per kilogram, the deal is worth at least $35 million annually. And the agreement includes annual renewal opportunities for up to five years.
"We are seeing evidence of substantial demand in the CBD market. We are delighted to be able to announce our first CBD supply agreement in Brazil and we are in active discussions regarding the balance of our supply for 2019," said David Rendimonti, LiveWell’s President in a statement. "Brazil is the largest country in South America and the eighth largest global economy, providing lots of room for growth."
Purchasing 1000 acres of industrial hemp
The announcement follows the company’s purchase of 1000 acres of industrial hemp just last week. LiveWell hopes to extract 25,000 kilograms of CBD oil in total from the purchase. The purchase agreement with Brazil, the eighth largest economy in the world, represents 20 percent of their initial expected CBD supply as per that previous announcement.
"This purchase of large industrial hemp biomass supply is in line with our strategic vision to become a global CBD market leader, by delivering high-quality innovative CBD health and wellness products in 2019," said Mr. David Rendimonti, President of LiveWell Canada.
LiveWell Canada enters the cannabis space as a health and wellness company focused on the advanced research and development of CBD oil and other cannabinoid products. Following a recent trend, the company listed on the TSX Venture Exchange earlier this summer. And with 1.5 million square feet of greenhouse space at their disposal, some experts believe that LiveWell is on their way to becoming a strategic competitor within the cannabis industry.
A white paper on CBD research
LiveWell also published a White Paper on CBD from industrial hemp on Friday, which covers the health benefits of CBD, including the company’s research. The paper goes into more detail regarding CBD’s market potential around the globe.
“Given the rapid emergence of interest in CBD, but relative lack of information, we thought it would be helpful to summarize our findings to provide context to our stakeholders regarding its health benefits and the CBD market," David Renidimonti, President of LiveWell, stated on Friday.
It”s clear that LiveWell hopes to add their voice to the competitive CBD market with this research presentation.
A big name partner in Canopy Growth
LiveWell is preparing for the start of recreational cannabis sales in Canada with support from business partners like Canopy Growth Corporation (TSX:WEED) (NYSE:CGC)
Canopy Growth, and its investment company Canopy Rivers Corporation purchased a combined 14 percent of LiveWell shortly after the company listed on the TSX-V in June. The move comes after a strategic agreement made in April that accelerated LiveWell’s commercialization capabilities. The greenhouse space in Ottawa is credited to investments made by both Canopy companies.
“We will work collaboratively with Canopy Growth to accelerate LiveWell's speed to market and deploy the resulting offtake throughout Canopy's industry-leading distribution platforms,” Canopy Rivers co-founder Sean McNulty clarified in the press release dated April 5. “With their Ottawa project located less than an hour from Canopy Growth's Smith Falls headquarters, and 5 minutes from the airport, LiveWell, once developed, represents a [complementary] supplement to our portfolio of production and distribution partners.”