International Cannabis Corp. (CSE: WRLD, OTC:KNHBF) told investors it's planted another flag in the European Union after buying Polannabis Holdings, which controls a hemp processing and extraction licence in Poland.
Polannabis has access to more than 850 acres of premium hemp crops; estimated to produce up to 6,800 tons of material in which Cannabinoid (CBD) derived products can be made. The company will fund initial development and European expansion with a capital infusion, as well as make payments of C$2.5 million and will issue over 26.5 million shares.
READ: International Cannabis eyeing unique EU opportunity after it receives Greek cannabis cultivation licence
"Polannabis brings a highly skilled workforce, proprietary extraction methodologies, as well as existing revenue generating supply contracts," said Eugene Beukman, the CEO and director of ICC.
ICC has already hired Sababa Sciences (Sababa), an Israeli based cannabis company to design, build and oversee the expansion of the Polish assets.
The Polish group has secured a monthly off-take agreement for 100 kilos of 99.9% CBD isolate, which will be launched immediately upon the completion of the above expansion.
Expansion in Europe
ICC's immediate investment in Polannabis will increase its CBD extraction capacity to an initial run-rate of over 2,400,000 grams per year, it said, ahead of Phase II build out which will begin in 2019.
Sababa's team has extensive experience in cannabinoid extraction, organic cultivation, product development and medical research.
Poland is the sixth most populous member of the EU and collectively with Greece will function as ICC's flagship European hemp cultivation and extraction hub.
Notably, ICC already holds an exclusive agreement with Cosmos Holdings (Cosmos), a European based pharmaceutical distributor, for medical cannabis products and all cannabis derivatives within Cosmos's distribution network of 110 clients.
Cosmos' distribution network represents around 35,000 pharmacies across 16 countries. The EU has more than 500 million potential consumers, affording ICC with a unique opportunity.
The acquisition of Polannabis provides ICC with immediate revenue generation and the ability to leverage its European distribution network.
ICC also said that a contingent consideration of up to C$2.5 million in cash to founding principals may be paid based on Polannabis achieving C$25 million in EBITDA by 2021.
ICC plans to invest an additional C$2 million.
The company has stepped up its European aspirations recently. It said it had been granted a medical cannabis cultivation licence by the Greek government - adding to the existing hemp licence the company has in the country.
The licence - the first of its kind to be issued in Greece - is needed for pre-approval to grow medical Cannabis in the Greek prefecture of Imathia. International Cannabis Corp plants another flag in the EU with the acquisition of Polannabis Holdings. International Cannabis Corp plants another flag in the EU with the acquisition of Polannabis Holdings.
Reporting by Giles Gwinnett