CannTrust Holdings (NYSE:CTST,TSX:TRST) announced an initial agreement to gain access to 3,000 acres of farmland for hemp production through a 50/50 joint venture with California-based Elk Grove Farming Company.
As quoted in the press release:
The opportunity in the US for CannTrust is to become a trusted supplier of consistent, standardized and high-quality hemp-derived (cannabidiol) CBD formulations at scale. The Company believes there will be increasing demand for hemp-derived CBD formulations from international retailers and product manufacturers, and those organizations require expertise in genetics and value-add processing to ensure products are desirable and meet the highest safety standards.
CannTrust will guarantee the off-take of biomass produced by the Joint Venture, and will use its expertise to process, formulate and sell hemp-derived CBD products in US markets where such sales are lawful. As an experienced operator meeting rigorous regulatory standards, CannTrust is well positioned to execute on this cultivation, processing and formulation strategy with the goal of becoming a leading supplier of hemp-derived CBD products in the US.
“This agreement represents another bold move for CannTrust. Our US operation is expected to deliver a significant increase in low-cost production capacity, which will leverage our expertise in standardized CBD-based product formulation, and will give the Company a foothold in the largest international CBD market in the world with an experienced and knowledgeable partner,” said Peter Aceto, Chief Executive Officer.