May 13, 2021 Cannabis Global, Inc. and Marijuana Company of America today announced the closing of a definitive agreement establishing a new manufacturing and research center for advanced cannabis concentrates, cannabinoid polymeric nanoparticles and nanofibers.
The joint venture, operating under the name MCOA Lynwood Services, Inc, will be managed from Natural Plant Extracts of California (NPE) in its Lynwood, California location.
Cannabis Global is majority owner of Natural Plant Extracts, holder of a Type 7 cannabis manufacturing permit. The new venture will immediately focus on the production of cannabis concentrates, which will be processed at the licensed NPE facility and will continue the research and development of Cannabis Global polymeric nanoparticle technologies, for which patent applications were filed late last year. Cannabis concentrates will be sold into the regulated California market and will be used within the Company’s upcoming products.
“We see numerous benefits to the joint venture,” commented Arman Tabatabaei, CEO of Cannabis Global. “Cannabis concentrates are one of the fastest growing areas of the regulated cannabis market and the pursuit is natural considering our recently renewed Type 7 license for volatile extraction, the licensing of which is strictly limited by The State of California. We also see powerful vertical integration and cost savings by being able to produce our own inputs to be added to our own brands. These cost savings will be further amplified by sending our finished products through our own distribution company and license – Northern Lights Distribution.”
Under the terms of the joint venture, MCOA will contribute capital and leases on production equipment to be used as the means of production. Cannabis Global will own 60% of the joint venture, allowing full consolidation of the revenues of the JV, while MCOA will own 40%.
The Companies will each appoint two individuals to the new JV board of directors. Last year, according to data published by MJBizDaily, the cannabis concentrate product category was up by more than 40%, representing one of the fast growing cannabis sub-categories.
Pricing of products in the category also rose last year by five percent, primarily driven by increased demand as consumers continued to move away from vape products due to health concerns and as consumers in mature markets, such as Los Angeles, are increasingly demanding more potent cannabis products.
Cannabis Global also plans to continue its research and development programs relating to cannabinoid polymeric nano technologies and to support its patent applications via the new joint venture operations.
During 2019 and 2020, Cannabis Global filed six provisional patents and three non-provisional patent applications on various cannabis technology, including unique polymeric nanoparticles and fibers for use in oral and dermal cannabinoid delivery.
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