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Zoetic makes three-pronged change to streamline its cultivation strategy

It is expanding its seed testing programme; it is terminating the lease on its Colorado production facility; and it has struck a European joint-venture to grow high-quality hemp seeds

Zoetic International PLC -

Zoetic International PLC (LON:ZOE) has made a three-pronged change to streamline its cultivation strategy.

The cannabinoid (CBD) specialist is expanding its seed testing programme via a partnership with GVB Biopharma; it is terminating the lease on its Colorado production facility; and it has struck a European joint-venture to grow high-quality hemp seeds.

In working with GVB, it said it wants to avoid the problems faced by certain Kentucky and North Carolina-based competitors that have based their products around what appears to be genetically-deficient hemp seed stocks.

“With the CBD industry becoming increasingly litigious, now is not the time to make uninformed business decisions and we strongly believe that by entering into this partnership, Zoetic will be better positioned to take data-driven action to move the company and its products forward," said joint chief executive, Antonio Russo in a statement.

The maker of the Chill tobacco alternative brand, said the closure of its Colorado leasehold facility would allow the business to scale “in line with both development and demand”, while reducing, in the short-term at least, one of its most significant overheads.

"As our Chill products enjoy sustained growth in their popularity, now is the right time to modernise the company's infrastructure and bring production into line with our vision,” said co-CEO Trevor Taylor.

“Although our facility in Colorado has served us well, we look forward to the new opportunities that other global cultivation sites offer whilst reducing one of the Company's most significant overhead costs."

As a further step into new global markets, Zoetic has struck a JV deal with an unnamed but “trusted” European cultivation partner.

With correct market positioning and appropriate legal protections in place, there is scope for Zoetic to be a leading UK/EU provider of high calibre hemp seed genetics, it added.

“With the movement of seed cultivation operations to Europe, Zoetic is set to scale the growth of its seed offerings as field trials in the US are completed," Taylor explained.

Quick facts: Zoetic International PLC

Price: 58.8 GBX

LSE:ZOE
Market: LSE
Market Cap: £115 m
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