Nextleaf Solutions Ltd (CSE:OILS) (OTCQB:OILFF) (FRA:L0MA) told shareholders that it had completed the second wholesale order from its recently announced customer, a Nasdaq-listed cannabis company.
The Vancouver-based cannabis processor said its wholly-owned subsidiary, Nextleaf Labs, supplies the partner with high-purity CBD distillate to power its branded CBD oil products. “These products are distributed by provincially authorized retailers across Canada,” said the company.
In addition, the company revealed that Nextleaf Labs has received an initial purchase order for around “40 kilos of high-purity THC distillate” from an Ontario licensed producer. The new partner plans to use Nextleaf's THC distillate to power its vape brand.
READ: Nextleaf Solutions awarded another US patent for processing method; notes big tobacco and alcohol validating its IP-focused strategy
"We are thrilled that our two newest partners are leveraging Nextleaf's competitive advantage to power their established brands," said Nextleaf Solutions CEO Paul Pedersen.
Nextleaf is expanding its business-to-business (B2B) wholesale business by supplying some of the world's largest cannabis producers with THC and CBD oils produced by its cannabis oil refinery.
“With the recent issuance of our sales amendment by Health Canada, Nextleaf looks forward to increasing revenues through the sale of branded consumer cannabis products by provincially authorized retailers," said Pedersen.
Meanwhile, during the second quarter, the company said it focused on the finalization of Nextleaf's sales amendment, and scaling of its vape cartridge manufacturing line, capable of producing up to 8,000 vape cartridges per day.
"Beyond turning initial B2B orders into longer-term supply agreements, increased revenue optionality is key to be building a sustainable business model. We've built a facility, team, and IP base that has synergies through all three of our revenue pillars of IP licensing, B2B bulk sales, and B2C branded product sales,” said Nextleaf CFO Charles Ackerman.
“We believe a diverse revenue model, with commonalties will allow us to build a very sustainable business in the medium-term, while smoothing revenues as the B2B market normalizes."
Nextleaf highlighted several milestones from its busy second quarter:
- The US Patent and Trademark Office granted Nextleaf three distinct patents related to the extraction, purification, and delivery of cannabinoids;
- The Canadian Intellectual Property Office granted Nextleaf a patent for the acetylation of cannabinoids. More specifically, the patent covers a process for acetylating CBD, and subsequent refinement of CBD-O-Acetate using a proprietary extraction and distillation technique;
- Nextleaf Labs received an amendment to its existing Standard Cannabis Processing Licence from Health Canada that authorizes the sale of cannabis extracts, edibles, and topical products, directly to provincially-authorized distributors and retailers across Canada;
- Nextleaf closed a private placement with an institutional investor for gross proceeds of $3,000,000 through the issuance of a senior secured convertible note in the principal amount of $3,300,000 and a warrant to purchase up to 6,875,000 shares.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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