Vancouver, British Columbia--(Newsfile Corp. - December 18, 2019) - Nextleaf Solutions Ltd. (CSE: OILS) (OTCQB: OILFF) (FSE: L0MA), a Coquitlam-based company developing disruptive intellectual property for the extraction and purification of cannabinoids, continues to monetize its intellectual property through a licensing agreement with a British Columbia-based cannabis processing equipment distribution company.
Under the terms of this license agreement, the licensee is permitted, on a non-exclusive basis, to commercialize and distribute certain intellectual property, specifically, three issued and pending patents developed by Nextleaf related to post-extraction processing equipment.
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Nextleaf will receive a royalty equal to 20% of the licensee's gross revenue from all sources in exchange for, among other consideration, the licensed IP. Based on the licensee's current product backlog and 2020 projections, Nextleaf's management estimates the Royalty could yield over $3 million in royalty fees to Nextleaf in the 2020 calendar year, with initial revenue expected to commence in the immediate term. Nextleaf may terminate the agreement if the Licensee does not meet certain minimum annual sales targets.
Charles Ackerman, CFO, stated: "We believe this is an ideal partnership with a company whose management has a proven track record of building one of the industry's largest cannabis processing equipment distributors. This deal brings OILS closer to its previously announced goal of $5,000,000-$10,000,000 in gross revenue from IP licensing alone in the next 12 months. We believe IP licensing has the potential to represent up to 10-20% of our gross annual revenue."
In addition to the development and monetization of its IP portfolio, Nextleaf continues to focus on assisting Nextleaf Labs Ltd., which holds its Health Canada processing licensed, to reach full commercial production including the production and sale of bulk CBD and THC oils. Nextleaf expects to announce additional commercial agreements during the first calendar quarter of 2020.
Paul Pedersen, co-founder and CEO, recently stated: "Nextleaf being awarded 10 patents by four international patent offices in the key markets of Canada, Australia, Colombia, and the United States validates our technology and further reinforces our vision of developing defendable intellectual property that improves CBD and THC oil economics globally."
The company is focused commercializing its IP portfolio through toll processing, wholesale of CBD and THC distillate, and licensing IP to partners operating in other legal markets.
Nextleaf's built-out, 6,540 square foot dedicated extraction and processing facility is located in Greater Vancouver, British Columbia, where it offers toll processing and white label production services to licensed standard and micro cultivators, hemp farmers, and standard processors, as well as renting extraction equipment.
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