It's a busy week for Crop Infrastructure Corp (CSE:CROP, OTCMKTS:CRXPF) and shares were up again Thursday as the cannabis sector investor revealed it had hired a firm to build its Nevada facility.
An extraction tech group will build a one-ton-per-day extraction facility at its Nevada CBD farm, the group said.
Major supply deal
On October 23 this year, Crop inked its first major supply deal for its Hempire tenant in Nevada with a commercial extraction technology company. Namely, a three-year, 500,000-pound-per-year (1.5 million pounds in total) deal with deliveries starting August next year.
That same company will be developing, and providing, extraction equipment for the CROP Nevada extraction facility, Crop said today.
The initial $3.2 million, equivalent to around 89,000 pounds of product, will be allocated towards paying for 60% of the facility.
The balance of around $2 million, due in cash over the next eight months will be financed by revenue from the company's operations.
The CBD flower off-take is to be delivered in shipments of 50,000 dry pounds on a bi-monthly basis with payment to be made plus the cost of delivery of $36.00 per pound to $57.00 per pound.
Harvesting 240 acres
CROP is currently harvesting its 240 acres planted this year, which will be processed for isolate and is also readying its 1,865-acre CBD farm for 2019 planting.
"The synergies and relationship between CROP and our off-take partner continue to evolve," said CROP CEO Michael Yorke.
"We look forward to continuing to develop this new partnership into new opportunities and other territories. We believe this is an effective and creative way of financing and developing our growth in a non-dilutive arrangement."
Cannabis industry analysts The Brightfield Group, estimate the hemp-CBD market alone could reach $22 billion by 2022.
Yesterday, Crop Infrastructure shares surged 25% as said it had signed former Coca-Cola branding executive Arashdeep Singh to head up its CannaDrink beverage business.
Singh has nearly 10 years' experience with drinks behemoth The Coca-Cola Company (NYSE:KO).
His last position was a senior brand manager for a $750 million portfolio of Coca Cola products.
Crop Infrastructure shares are up over 22% on Thursday at $0.41 each.
Reporting by Giles Gwinnett
giles@proactiveinvestors.com