Bophelo Enters into $30 Million Offtake Agreement with Medcan
Bophelo Bio Science & Wellness Pty Ltd (“Bophelo”), a company registered in the Kingdom of Lesotho, and a wholly-owned subisidary of Halo Labs Inc. (“Halo”), has entered into an offtake agreement with Medcan Ltd, a company incorporated in the Republic of Malta, for the sale of bulk cannabis biomass, primarily into the European market.
The term of the Agreement is for a period commencing on August 3, 2020 and ending on the earlier of (i) the date on which Medcan has purchased the full specified volume biomass from Bophelo, or (ii) the 7th anniversary of the effective date.
The contract specifies initial deliveries of up to 10,000 kilograms. Initial shipments are expected to commence in the 4th quarter of 2020. Based on current European demand, Medcan anticipates taking delivery of the initial 10,000 kilograms by the end of 2021. Medcan will pay Bophelo within 15 days of receipt and acceptance of the product.
Bophelo has been working with Pharmaconsulta Limited, a Good Agricultural and Collection (“GACP”) accreditation specialist consulting firm, based in Malta, to obtain Maltese GACP certification, that Bophelo anticipates achieving prior to the end of 2020.
Bophelo will procure the transport of the biomass by a licensed cannabis transport operator. and deliver the biomass to Medcan in containers, complying with the applicable Agricultural Practice Standards, or as otherwise agreed to by the parties. All the biomass is subject to Medcan’s inspection and acceptance or rejection at Bophelo’s facility in Lesotho. Such inspections shall be conducted by a compliant laboratory.
Bophelo shall ensure that all bulk extract delivered to Medcan complies with the specifications agreed, insofar as each batch must provide a total THC concentration of at least 2%. This shall be verified by ensuring that each one gram of bulk extract yields a combined total of at least 120 milligrams of THC and THCA, using a pre-determined formula as contained in the Agreement. Bophelo currently has approximately 186 kilograms of clean, tested material, already packaged and stored in a secure vault. All material produced to date at Bophelo has tested completely clean with not a trace of pesticide, mold, fungus or heavy metals.
Pursuant to the Agreement, Medcan will pay Bophelo prevailing market rates, calculated on the basis of a price per gram, based on the delivery weight. The price will be determined on the basis that Medcan shall seek to sell the batch at the highest value achievable in the market, currently estimated to be $3.00 per gram. The bulk cannabis to be delivered includes A and B grade trimmed flower buds, as well as bulk material, consisting of trimmings and sugar leaves for processing into distillate.
Halo’s founders have known Medcan’s partner Kase Manufacturing located in California who played an instrumental role in setting up this contract.
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