The LOI represents the initial production on an annual supply agreement and is estimated in value to be in excess of $70MM USD per annum. Parties intend to increase allocation and supply based on market development in the targeted region.
Production will occur in Colombia at CannabCo's extraction, production and processing facility located 30 minutes outside of the country's capital city of Bogota.
We are very excited to be part of Colombia's efforts to become the world leader in medical cannabis supply said Joseph Palumbo, the country general manager. We have been inundated with supply requests for a market that is grossly underserviced and under-producing currently, and we are looking forward to ramping up to meet the demand over the next few years. We believe that Colombia with its perfect growing climate and dedication to the medical cannabis market will be the primary source of medical cannabis on a global scale.
CannabCo could not be more pleased with the supply agreement or its decision to enter the Colombian cannabis market. With its near perfect growing conditions for cannabis, abundant and educated low cost labour force, and already established agricultural footprint, Colombia is the perfect place for our cannabis cultivation and product manufacturing efforts said Joseph.
Currently Colombia has made great strides in setting up the infrastructure to meet the global demand for medical cannabis oil, however even with the enormous strides made by CannabCo and other Colombia operations; it will be many years before production reaches capacity to make a dent in global demand. And with new markets opening up frequently, this supply gap keeps widening. Experts estimate that Colombia may eventually supply a significant percentage of the world's demand for cannabis oil and medical cannabis derivative products, both psychoactive and non-psychoactive (CBD).