Under the terms of the agreement, the company will pre-fund the purchase of 60,000 kilograms of dried hemp flower. Organigram said it plans to harvest those hemp flowers this year for extraction into CBD isolate.
1812 Hemp will use the funds to acquire specialized large-scale hemp harvesting and processing equipment in order to boost crop yields.
Organigram already entered a purchase agreement with 1812 Hemp in January, upon which it has obtained a right of first refusal on 1812 Hemp’s future harvests.
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“Access to a large, consistent volume of CBD-producing hemp has become increasingly important as Canadians express their demand for CBD-rich products for use in both recreational and medical capacities,” Organigram CEO Greg Engel said in a statement.
“We’ve heard the call for CBD in the market and this agreement positions Organigram to meet that demand.”
1812 Hemp is an industrial hemp company that works on enhancing the genetic development of hemp cultivars for a variety of applications.
Organigram is a Canadian licensed producer of cannabis and cannabis-derived products. The company is focused on growing its global footprint and is known for cannabis brands such as Trailblazer, The Edison Cannabis Company and Ankr Organics.
Organigram shares were trading higher by 1.72% at $5.93 at the time of publication Friday.
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