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Westleaf Inc
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Close 2019-07-23 C$ 0.485
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Delta 9 to buy $4M of cannabis products from Westleaf

2019-07-24 07:30 ET - News Release

See News Release (C-DN) Delta 9 Cannabis Inc

Mr. John Arbuthnot of Delta 9 reports


Delta 9 Cannabis Inc.'s subsidiary, Delta 9 Bio-Tech Inc., has entered into a one-year white-labelling agreement with Westleaf Inc. to supply approximately $4-million of cannabis derivative products from Westleaf's large-scale extraction and manufacturing facility located in Calgary, known as The Plant. Under the terms of the agreement, the deliveries of cannabis derivative products will begin on Oct. 1, 2019, subject to receipt of final licence approval from Health Canada for The Plant, and will continue an initial term of one year. During this initial year, Delta 9 will be required to purchase a minimum of approximately $4-million of various white-labelled cannabis derivative products (subject to regulation, such products are expected to include a mix of vape pens, gel caps, tincture oil and edibles) with an option to increase such amount up to $16-million per year.

"We are looking forward to expanding our product distribution to include cannabis derivative products with the anticipated rollout of additional regulations this fall. When looking at our suite of options for white-labelled derivative cannabis products, Westleaf stood out as a clear choice," said John Arbuthnot, president and chief executive officer of Delta 9. "Given Westleaf's menu of existing product formulations and distribution capabilities through their cannabis retail chain, Prairie Records, we view this agreement as positive step in expanding our Delta 9 branded product offerings and distribution footprint."

"This is an important milestone for The Plant and for Westleaf in securing contractual revenue," noted Scott Hurd, president and chief executive officer, Westleaf. "This is the first of what we believe will be many derivative product sales and manufacturing agreements for our facility, phase 1 of which is designed to process up to 65,000 kilograms of dried cannabis flower per year." Mr. Hurd added that The Plant has an additional 45,000 square feet of space available for expansion which will greatly increase its capacity to formulate and produce the next wave of cannabis derivative products such as vapes, edibles and topicals, once they are legalized later this year.

About Delta 9 Cannabis Inc.

Delta 9 is a vertically integrated cannabis company focused on bringing the highest-quality cannabis products to market. Delta 9's wholly owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the Access to Cannabis for Medical Purposes Regulations and operates an 80,000-square-foot production facility in Winnipeg, Man. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand.

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