Israeli company Together (TASE: TGDR) has announced that it has signed a binding Memorandum of Understanding with an entity in an EU country for collaboration on growing, processing and exporting medical cannabis. As part of the collaboration, a new joint venture will strive to obtain licenses for setting up greenhouses and a production facility of about 30,000 square meters.
Together continues to hope that the Israeli government will end its foot-dragging an approve exports of medical cannabis. But meanwhile it is diversifying its options having set up greenhouses for growing and processing medical in an Africa country, and now it hopes to do the same in an unnamed EU country.
Under the terms of the agreement, a new joint venture will be founded with a partner in the EU country. The partner will provide the operating company with a suitable amount of land for operating its activities in the foreign country, and Together will provide the required knowhow and skills for carrying out the operations.
Together will hold 51% of the shares of the operating company, and the partner will hold 49% of the shares of the operating company, and the profits yielded by operations will be divided between the parties according to their holdings.
Together reports that to the best of its knowledge, as of the date of signing the memorandum of principles, legislation is underway in the foreign country, which will allow the growing, production and export of medical cannabis and its products. The company estimates that the procedure for obtaining the licenses in the foreign country will take place over the coming months.
Financing the operations will be implemented with an owner's loan under terms that will be set between the parties as part of the binding agreement that will be signed between them. Prior to the division of profits, the joint company will repay the loan to Together, under terms that will be set in the binding agreement. The rights and commitments of the parties are subject to the fulfillment of the contingent conditions as set out in the agreement.
Together CEO Nissim Bracha said, "We are continually working to expand our growing, production and marketing infrastructure in attractive target markets and we believe that this agreement in a European country with an optimal climate for growing medical cannabis at worthwhile costs and which is close to target markets will enable us to increase and to improve our response to demand for medical cannabis produce and products. Moving forward with this agreement, as with similar agreements before, it represents the fulfillment of the company's business strategy to operate from several locations worldwide and is due to the legalization process in, among other places, North America, which will create a high rate of growth and demand for cannabis products."
He added, "As previously stated, operations at a number of locations worldwide can create flexibility for the supply company and high production capacity, and we hope that as well as creating value for the company's shareholders, we can also play a significant role in developing a major export sector for the State of Israel."
Together and its operations unit Globus Pharma have marketing and distribution agreements with leading companies in the medical cannabis sector in Germany and Canada amounting to an overall 80 tons of produce annually. Together Pharma has more than 20 years of knowhow in growing medical cannabis that meets the strictest international standards, and it is in advanced stages of receiving marketing approval in Germany and the entire European market, including submitting a request to receive a European permit for exporting medical cannabis products and receiving a license to distribute them throughout Europe.
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2018
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