Shares in cannabis-focused Crop Infrastructure Corp. (CSE:CROP, CSE:CROP.CN, OTCMKTS:CRXPF) advanced Monday as it inked a deal for more acreage in Nevada, expanding its asset there.
The company told investors it had inked a three-year lease agreement for 800 additional acres of pivot-irrigated agricultural property, which will cost $550 per acre in 2019 and $700 per acre 2020 forward, paid quarterly beginning in March next year.
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The site is close to Crop's existing 1,065-acre hemp cannabidiol farm in Nye county - also in Nevada.
"Crop is preparing for the upcoming Hemp Farming Act of 2018 which would remove hemp's controlled substance designation, thus legalizing the Crop under federal law, and allowing CBD isolate to be sold across all 50 states and exported internationally," said Crop's chief executive Michael Yorke.
"As we enter the next phase of project development in Nevada we look forward to building our GMP extraction facility and introducing our made-in-America CBD Isolate to infuse into our recently announced CannaDrink beverages and licensed topical lines.
"Crop has the largest real estate footprint in Nevada dedicated to hemp CBD."
He added: "Once the additional upgrades are completed, we anticipate that our tenant and brand licensee will have 1,340 acres under irrigation.
Potential harvest
"With two crops expected annually in 2019, we foresee a harvest potential of approximately 2,680,000 lb of CBD flower. We expect to comfortably use funds from our 2018 harvest (next 30 to 60 days) to organically grow into the projects new footprint."
The company said its combined Nevada properties, including the original one of 315 acres, have a total pivoted area of 1,340 acres but will require the installation of additional pivots and water wheels at a cost of $300,000.
Seasonal fertiliser, planting and seed costs are not expected to exceed $600,000. All harvesting and commercial drying equipment have been paid for during the 2018 season.
According to cannabis industry analysts at the Brightfield Group, it is estimated the hemp CBD market alone could hit $22B by 2022.
Crop Infrastructure shares surged over 8% in Toronto to C$0.63.