BevCanna Enterprises Inc (CSE:BEV) (OTCMKTS:BVNNF) is boosting its intellectual property portfolio with the addition of water-soluble cannabinoid powder DepperGreen.
The Vancouver-based company announced Thursday that it had exercised its option to acquire the right, title and interest to DeeperGreen, which is developed by California-based Greener Frontiers.
The two companies signed an agreement in April 2019 to develop ready‐to‐drink cannabis‐infused beverages, with BevCanna holding the option to acquire all the intellectual property of Greener Frontiers related to their technology for water‐soluble cannabis powder.
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DeeperGreen converts extracted cannabis into a fast-acting, tasteless, odorless, water-soluble powdered ingredient.
Testing on the powder confirmed it as a stable ingredient that, when tested with cannabinoids, consistently delivers target concentrations within one batch and from batch-to-batch. It also accurately and precisely infuses granular drink mixes and ready-to-drink water beverages.
"DeeperGreen technology expands BevCanna's ability to produce a portfolio of cannabis infused beverage formats," said Emma Andrews, chief commercialization officer at BevCanna.
"The addition of a water-soluble powder allows us to offer consumers more variety in methods of consumption, which can now pair with various consumption occasions.”
Powdered drink mixes complement the firm’s existing expertise in ready-to-drink products, Andrews told shareholders, and allow the company to expand the innovation pipeline for its house brands, and with white label partners through contract manufacturing.
The agreement with Greener Frontiers also gives BevCanna an important entry point into the US market.
In exchange to the intellectual property for DeeperGreen, BevCanna will issue Greener Frontiers a batch of shares priced at US$0.38 (C$0.50) under the following terms:
- 3,684,210 shares within ten days of selling at least 10,000 single-serve powder sachets at no less than US$3 per unit under the first phase of a forthcoming pilot program;
- 3,684,210 shares if Greener Frontiers assists BevCanna to launch a line of infused drinks within nine months of the date of the agreement, and BevCanna successfully commercializes and brings to market the line of infused drinks including achieving positive sales in California, excluding sales under the pilot program;
- 2,631,578 shares once revenues hit US$7.5 million revenues or US$3.6 million in EBITDA by BevCanna no later than December 31, 2021 from sales in California; and
- 2,631,578 Shares on US$16.5 million in revenues, or US$9.9 million in EBITDA by BevCanna by December 31, 2022 from sales in California of the line of powder drink being developed
BevCanna also agreed to loan Greener Frontiers up to US$250,000 in connection with its stage 2 capital commitment for its licensed manufacturing facility in Sacramento, California.
The deal is expected to close on or before December 21.
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