Mr. Peter Cheung reports
DISCOVER WELLNESS SOLUTIONS SIGNS MOU WITH QUAD PLAY TO ENTER THAILAND'S DEREGULATING HEMP EXTRACT MARKET
Discover Wellness Solutions Inc. has entered into a memorandum of understanding on co-operation on arrangement of hemp business in Thailand with Quad Play of Thailand. Thailand is an attractive market for Discover Wellness as it is the first country globally to deregulate hemp-derived oils and extracts which allows it to be included in consumer product goods. The MOU is the first step in DWS and QP creating a joint business for the development and marketing of consumer-packaged goods infused with hemp extracts for the Asian market, including wellness, food, beverage and cosmetics products.
Under the terms of the MOU, QP would import high-potency hemp seeds from DWS for distribution and cultivation in Thailand. QP will become an exclusive supplier of DWS seeds in Thailand. The agreement is subject to an initial trial order of 20,000 seeds. Upon successful completion of the trial order, QP will prepurchase 200,000 seeds ($200,000 (U.S.) value) and in return DWS will receive a 4-per-cent equity interest in QP. Additionally, DWS has a right of first refusal to acquire control of QP once regulations in Thailand allow for control by foreign companies.
QP will arrange for co-operation with producers in Thailand of medicine, food and drinks products which wish to incorporate hemp oils and extracts in their products. By this arrangement, DWS can use Thailand as a base for distributing seeds, cultivating and producing DWS's products for sales in Thailand domestically and internationally.
Effective, Jan. 29, 2021, the Thai government amended its hemp regulations. Under its new definition hemp with less than 1 per cent THC can now be imported, exported and used for government, industrial, medical and research purposes.
"We view this arrangement as a first step for Discover Wellness' global distribution strategy into the fast-growing food and beverage markets of Asia, a potential $5.8-billion market by 2024 according to Prohibition Partners. We are excited to be working with QP as our exclusive partner and leverage their deep relationships with traditional consumer packaged goods companies within Thailand and the broader Asian market," commented Peter Cheung, interim chief executive officer and chief financial officer.
Key points from the MOU
The QP and DWS have the intention to co-operate and develop hemp industry in Thailand to become the bio medical hub that produces a variety of hemp products, such as medical, food, beverages and cosmetic products, for domestic and export to regional comprehensive economic partnership and global markets.
- QP to become the exclusive supplier of DWS seeds in Thailand.
- The agreement will be subject to an initial order of 20,000 seeds.
- QP to pre-purchase 200,0000 seeds (value of $200,000 (U.S.)) for 4,000 shares in QP that represents a 4-per-cent equity interest on a fully diluted basis in QP. The prepurchase and equity interest is subject to a successful trial order.
- After the initial 200,000 seeds, QP to pay on a per seed basis and Discover Wellness has the option to convert those amounts into additional equity of QP to a maximum allowed under foreign ownership rules currently at 33 per cent.
- Discover Wellness shall have the ROFR to acquire control of QP once regulations in Thailand allow for control by foreign companies.
QP and DWS are working diligently on completing the detailed implementation plan to be in line with the timeframe agreed and prepare a joint venture agreement. The company will provide updates from time to time in due course.
Quad Play (Thailand) Co. Ltd.
Quad Play is a Thai registered company with several licensed entities in the cannabis and hemp ecosystem. Quad Play recently signed a memorandum of agreement with Walailak University. Quad Play's wholly owned subsidiary Jai Sai currently has two licensed traditional Thai medical clinics with plans to roll out many more nationwide; they will form one of the main distribution channels for QP and DWS products. Quad Play will become a leader in developing genetics, cultivation, extraction technology and production of bio medical products for food, beverage and health products for domestic market, and ultimately export to regional comprehensive economic partnership and global markets.
Discover Wellness Solutions Inc.
Discover Wellness (formerly RMMI Corp.) is a Canadian company licensed, through its subsidiary to cultivate, produce, process and sell cannabis in various forms. The company's vision is to enhance shareholder value by establishing cost leadership in hemp processing and CBD extraction coupled with a global distribution strategy.
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