Canada's Invictus MD Strategies Corp., CannAmerica Brands Corp. and CBDistribution Co. Ltd. agreed to form a cannabis joint venture.
Each party will own one-third of the JV, which will acquire hemp biomass for extraction into cannabidiol, or CBD, isolate. CBD is a nonpsychoactive cannabinoid found in cannabis.
Under the binding letter of intent, Invictus will contribute a C$5 million line of credit for the JV to acquire extraction equipment, build out infrastructure and fund working capital. Vancouver, Canada-based CannAmerica will contribute operational expertise, as well as source the property, extraction equipment, staffing and manage operations for the JV. CBDistribution will contribute the sourcing of hemp biomass procurement, branding, marketing and commercialization of the finished product, including but not limited to CBD isolate.
Invictus plans to enter into a definitive joint venture agreement on or before Jan. 31, subject to board approval and completion of satisfactory due diligence.
The company said the JV enables it to expand beyond Canada and capitalizes on the $867 billion farm bill President Donald Trump signed in December 2018. The new law legalized mass hemp production and distribution in the U.S. It defines hemp as cannabis with less than 0.3% tetrahydrocannabinol, or THC — the plant's main psychoactive cannabinoid.