MMJ Group Holdings Ltd (ASX:MMJ) investment company BevCanna Enterprises Inc has entered into an exclusive supply agreement with Nextleaf Solutions Ltd (CSE:OILS) for the production of high-purity cannabinoid-rich distillate.
Nextleaf is the owner of five issued and 24 pending patents pertaining to the distillate, which is a key ingredient used in the manufacturing of standardised THC and CBD-infused products.
Exclusive licence has been granted to BevCanna by Nextleaf, for the use of its intellectual property (IP) related to water-soluble cannabinoids for the development, manufacturing and sale of BevCanna products.
This includes BevCanna’s portfolio of house brands and white-label products developed by BevCanna for third parties.
BevCanna chief commercialisation officer Emma Andrews said the company was very pleased to leverage Nextleaf’s technology within its formulations, as it had a proven reputation for unique and differentiated intellectual property.
She added: “Its patented extraction process will allow our beverages to be made with odourless, tasteless cannabinoids, resulting in a superior taste and consumption experience – [it] is a natural complement to our premium spring water baste.
“Taste and reliability will be essential to growing this category.”
Product development activities to expand
Performance milestones include commercialisation within 12 months of infused products and edibles being legalised in Canada, which is anticipated in October 2019.
The initial term of the agreement extends for three years after legalisation and extends for a subsequent five-year renewal period, unless terminated earlier.
Under BevCanna’s recently issued research licence, product development activities will take a big step forward to include stability validation, sensory evaluation, and equipment testing, in preparation for scale-up toward full commercialisation.
Experience in creating iconic brands
Nextleaf chief executive officer Paul Pedersen said: “The BevCanna team brings a tremendous amount of experience in creating iconic beverage brands and consumer packaged goods, including Mike’s Hard Lemonade, Vega, and Trace Beverages.
“BevCanna’s existing infrastructure, including a world-class bottling plant and spring water aquifer in British Columbia, is a great example of the calibre of partners we want to commercialise our IP through.”
BevCamma recently shared two of its intended brands for commercialisation in Canada, including Anarchist Mountain Beverages, a line of THC-infused sparking spring water beverages with botanical flavour profiles inspired by the Pacific Northwest, and Grüv, a line of easy-drinking iced tea beverages with a balanced blend of THC and CBD.
Based in British Columbia, Canada, BevCanna has a 100-acre outdoor cultivation site in the fertile Okanagan Valley as well as exclusive rights to a pristine spring water aquifer and a world-class, 40,000 square foot, HACCP-certified manufacturing facility with current bottling capacity of up to 72 million bottles per shift per year.
Nextleaf is the first publicly traded company to be issued a US patent for the industrial-scale extraction and purification of cannabinoids.
Once cannabis concentrates become legal across Canada on October 17 this year, the company plans to commercialise its intellectual property portfolio through IP licensing and business-to-business processing services.