CLS Holdings USA Inc, a diversified cannabis company operating as Cannabis Life Sciences (CLS), announced a 50/50 joint venture with Ranson Shepherd to manufacture pre-rolls, a category that represented around 11% of overall cannabis sales in Nevada in 2020.
The Las Vegas, Nevada-based cannabis company said the collaborative venture is expected to allow for the rapid production of “high quality, low-cost pre-rolls” and anticipates producing 200,000 pre-rolls per month after the initial start-up period.
The company cited recently published data showing that the average wholesale price for pre-rolls in Nevada exceeds $3 per unit. “The company plans to manufacture .5/.8/1.0 gram infused pre-rolls,” it added. The company anticipates beginning production of the joint venture's pre-rolls in the first quarter of 2022.
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"We are excited to add yet another notch to our growing belt of high quality, reliable products that has helped the company become more successful than ever," CLS Holdings USA (CSE:CLSH, OTCQB:CLSH) president and COO Andrew Glashow said in a statement. "We anticipate to continue riding this upward wave of success with our latest collaboration. Ranson has established himself as a key player in Nevada's cannabis industry in a short amount of time and we could not be more excited to partner with him on one of the market's most sought after items."
The joint venture will utilize the company's existing 22,500 square feet manufacturing facility creating economies of scale and plans to create its own pre-rolls as well as manufacture pre-rolls for other brands under exclusive licensing agreements.
Significantly, the JV is expected to provide a structural cost advantage and become one of the lowest cost providers based on raw material procurement, create additional jobs and anticipates achieving gross margins in-line with CLS' standalone gross margins and to become accretive to CLS.
CLS Holdings USA acts as an integrated cannabis producer and retailer through its Oasis Cannabis subsidiaries in Nevada and plans to expand to other states. CLS stands for Cannabis Life Sciences, in a nod to the company's patented proprietary method of extracting various cannabinoids from the marijuana plant and converting them into products with a higher level of quality and consistency. The firm’s business model includes licensing operations, processing operations, processing facilities, sale of products, brand creation and consulting services.
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