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Cannasouth joins forces with leading US company
Through its joint venture subsidiary, Cannasouth Cultivation Limited (CCL), Cannasouth Limited has entered into a service agreement with EAH Enterprises LLC, trading as Vera Cultivation in Colorado, USA.
Vera Cultivation (Vera) is a US market leader in the production of high-quality cannabis product using world class and proprietary growing systems.
The agreement is for the supply of services to finalise the design of CCL’s cultivation facility, develop (licensed) operating systems and procedures, and provide support for the rapid and successful implementation of CCL’s state-of-the art growing facilities.
Vera is a well-established cultivation business operating in one of the most competitive cannabis cultivation markets in the world. The agreement will provide CCL with the ability to produce high quality yields at low cost.
The agreement supports an important milestone for Cannasouth towards meeting its business objectives, which includes producing next generation, affordable, New Zealand-grown and manufactured pharmaceutical grade medicinal cannabis products for New Zealand patients and export markets.
Cannasouth conducted extensive due diligence and consultations with many established growing operations in Europe and USA, and carried out site visits prior to Covid-19 travel restrictions.
Cannasouth CEO Mark Lucas says
“The company selected Vera because of its market leading, high-end facilities and operating systems, and its consideration for the environment.”
Vera’s hybrid greenhouse model combines the benefits of greenhouse production with high-end indoor cultivation technology. Compared to other growing models, Vera has a minimal resource input approach to production, which is great for profitability and fits well with Cannasouth’s own brand positioning.
The result is a sustainable, consistent, high quality, high yield product at some of the lowest production costs in the industry. Both businesses have strong values based on sustainability and the environment, which is why this partnership makes so much sense.
Cannasouth Cultivation’s JV partner, Aaron Craig, says, “Ultimately, we want to produce the best raw material for our customers. Alex Park [Vera CEO] and his team are the best in the business. Now we have formalised our great relationship via this service agreement, we are looking forward to implementing our plans. It’s an exciting time for all parties involved.”
“New Zealand is embarking on a journey we are passionate about,” says Alex Park, Chief Executive Officer, Vera Cultivation. “We are excited to be working with Cannasouth to lend them our knowledge and expertise in design and operating systems, which will enable them to achieve operational excellence and deliver product as soon as possible to the market”.
The term of the service agreement is two-and-a-half-years and includes provisions relating to intellectual property rights. It is subject to applicable New Zealand laws, as well as a number of territorial and commercial restraints. Services will be performed by Vera in two phases, with compensation being staged and linked to key deliverables.