Mr. Marc Geen reports
SPEAKEASY SIGNS LOI WITH M&J ORCHARDS TO OPERATE A 50 ACRE HEMP FIELD
Speakeasy Cannabis Club Ltd. has signed a non-binding letter of intent with M&J Orchards Ltd. to plant 50 acres of hemp in 2020 on M&J's property.
Industrial hemp regulations
The production of industrial hemp follows a different, far less stringent set of regulations than those for the production of cannabis, allowing an easier licensing process for the production of hemp containing less than 0.3 per cent tetrahydrocannabinol. Industrial hemp producers can grow hemp of approved varieties, collect the biomass and sell to licensed producers that can then process into concentrated forms of CBD.
Reasons for additional land
Speakeasy's property has already undergone stringent approval processes from the Agricultural Land Reserve, federal, provincial, municipal governments and Health Canada for the cultivation of THC-bearing cannabis. The company finds it necessary to lease land in order to grow industrial hemp and secure a supply of CBD-bearing hemp, which would meet its biomass standards. The demand for CBD is expected to be greater than Speakeasy could possibly grow on its land package, therefore strategic partnerships with landowners and operators to produce industrial hemp is essential for the company to keep up with demand.
Throughout the 2020 season, Speakeasy will continue to develop its phase 2 outdoor grow facility on the remaining land suitable for growing cannabis on its 290-acre property and expects it to be licensed and ready for the 2021 grow season.
Founder Marc Geen stated, "Between utilizing our location and excellent climate, unique to the industry harvest equipment and methods and our large-scale, efficient processing and extraction facility, which we anticipate to come on line this fall, we will be in an excellent position to participate competitively in markets here in Canada and around the world."
CBD market opportunity
CBD markets have been expanding aggressively for the last two years and are expected to continue as countries around the world open up:
- BDS Analytics and Arcview Market Research project that the collective market for CBD sales in the United States will surpass $20-billion by 2024.
- The Canadian CBD market is expected to reach $1-billion in the next five years -- Forbes.
Competitive CBD pricing for international markets
Projected harvest amounts will allow us to produce over 6,500 kilograms of CBD distillate from yields from the proposed 50-acre field with an expected selling price of $10,000 per kilogram. Although recent sales of CBD distillate have been approximately $30,000 per kilogram, Speakeasy's management projects that those prices are not sustainable and will level out at around $10,000 per kilogram, which is consistent with prices being obtained in the United States and Europe. Speakeasy projects that its cost of production for a kilogram of distillate will be approximately $485, which, if realized, will give the company an important advantage in global markets.
Strategic sales and distributions
Speakeasy has been working on outlets for its CBD distillate production by fostering relationships throughout Canada, Mexico and throughout Europe.
Mr. Geen stated: "Building relationships with clients and companies is an important part of any business. We have been building strong relationships for years in anticipation of beginning sales and distribution of Speakeasy's products and it is finally time to enact these sales and distribution agreements." Over the next few months Speakeasy intends to announce partnerships and supply agreements with companies it is proud to be working with. Speakeasy's vision has always started with what the customer wants and working backward from there, it is exciting to reveal the full scope of the plan that culminates in delivering to the customer exactly what they want.
About M&J Orchards Ltd.
M&J Orchards is a Geen family company that owns land directly adjacent to the Speakeasy property in Rock Creek, B.C., an area ideal for the production of cannabis. M&J Orchards will provide irrigated land, a hemp production licence, equipment, storage and manpower for the project. Speakeasy will provide financing, know-how, harvesting, processing and sales of material harvested from the proposed 50-acre field.
About Speakeasy Cannabis Club Ltd.
Speakeasy holds a cultivation, processing and sales licence issued by Health Canada under the Cannabis Act. Speakeasy owns 290 acres of land in Rock Creek, B.C., and leverages three generations of farming experience in British Columbia, as well as its favourable location to grow and process high-quality cannabis products at low cost. Speakeasy cultivates small-batch, high-quality craft cannabis in its 10,000-square-foot indoor facility and has recently completed the development of its 60-acre outdoor field. The company's intention, upon receipt of an amendment to its current licence to include the outdoor cultivation area, is to produce approximately 70,000 kg of outdoor, sun-grown cannabis in 2020.
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