As per the agreement, Algae.Tec will invest a further US$1 million (above the initial US$1.5 million deal signed in May) into Auberna, with the new amount to be injected over a six-month period.
Importantly, the agreement will provide Algae.Tec with direct equity in a federally licensed commercial cannabis businesses in Uruguay, facilitating access to key export markets globally.
Uruguay remains the only federally regulated jurisdiction for both medicinal and recreational cannabis.
Algae.Tec is now well positioned to deploy its proprietary growing technology into the rapidly growing global medicinal cannabis market.
The new agreement provides Algae.Tec the ability to sell extracted oil to medicinal and recreational cannabis product manufacturers and develop a proprietary line of branded products.
Additionally, Auberna will grant Algae.Tec a distribution license with respect to its own intellectual property for commercial distribution.
In September, Algae.Tec started planting the first 10-acre cannabis crop in Uruguay as part of the research and collaboration agreement.
Based on the current market pricing for cannabis oil, seed extracts and fibre products, the revenue from the first crop is expected to be between US$6-8 million from product sales.
The companies are developing an initial crop of active heirloom cannabis, without genetically altered structures and with naturally high levels of cannabinoids.