Medcolcanna Organics Inc. announced the execution of two Definitive Colombian Supply Agreements and two EU Sales Agreements for EUGMP and CUMS-IMC certified Dried Flower. The executed agreements are for the purchase of 1,200 and up to 8,000 kilos per year of indoor grown and EUGMP certified dried flower as well as 800 kilos of CUMS-IMC certified Dried Flower. MCCN has also signed two definitive agreements for the sale of and distribution of the EUGMP and CUMS-IMC certified Dried Flower.
The terms outlined in the definitive Colombian supply agreements include the purchase and sale of THC Dried Flower. MCCN is to purchase 100% of the existing capacity (1,200 kilos per year) and 100% of the grower's expanded capacity up to 8,000 kilos per year, this supply is produced from the only indoor facility in Colombia. The agreement is for a three-year term with the possibility to extend the term.
The grower has obtained the EUGMP certification, which commands a market premium for sales into the European Union. Medcolcanna expects to receive the first shipment in October 2022. The grower expects to complete its first expansion by late Q4-2022 which will increase its production by approximately 4,000 kilos of annualized production The agreement establishes a long-term supply partnership, with the contract having a three-year term, with the possibility of extending the term.
Working capital has been provided by MCCN to the supplier as a condition to the agreement. The quota for the export of THC has been granted to MCCN MCCN has applied to the Colombian Government to allocate a portion of its THC quota to this supplier and is expecting the approval to occur shortly. The approval of the allocation of the quota to the supplier to perform its obligation to grow at their indoor GMP EU certified facility.
MCCN is providing its genetics to the supplier, to utilize in their indoor facility. The second Colombian Supply Agreement is for MCCN to purchase 800 kilos of CUMS-IMC certified dried flower per year. The grower has a state of the art, climate control polycarbonate Greenhouse infrastructure with supplemental lights to guarantee indoor quality production.
The grower has obtained the Israel CUMS-IMC certification, which commands a market premium for sales into Israel. Medcolcanna expects to receive the first shipment in late October or November 2022. The agreement establishes a long-term supply partnership, with the contract having a two-year term, with the possibility of extending the term.
THC quotas has been granted and allocated to the supplier approved by the government and ready to start cultivation.