Vodis Pharmaceuticals Inc. (CSE: VP / FSE: 1JV) (“Vodis” or the “Company”) announced today the Vodis name, image and various Vodis-inspired designs and concepts will be used to brand, market, and sell marijuana products across Washington State through a Product Licensing and Marketing Agreement (the “Licensing Agreement”) between a Washington State marijuana licensee, Our Church International, LLC (“OCI”), and Vodis’s wholly-owned subsidiary, Vodis USA, Inc. (“Vodis USA”).
The Licensing Agreement entered into by Vodis USA and its Bellingham facility tenant, OCI, will result in the Vodis name and related images being used for branding, marketing, and commercialization of OCI’s cannabis products. In addition, with Vodis developing marketing strategies and providing operational support we expect the Vodis brand will become synonymous across and eventually beyond the State of Washington with premium-branded cannabis products. “This is an important step to continue developing the association between the Vodis brand and high quality, consumer recognized cannabis products. We have worked hard with the OCI team to ensure all Vodis branding will be associated with the best OCI has to offer,” stated Vodis CEO Ivan Miliovski.
This agreement is seen by Vodis not only as a source of additional value-added revenue from its client OCI, but also as an important opportunity to capitalize on the recently announced Phase 2 production expansion at OCI’s Washington facility. Establishing early consumer recognition of Vodis USA as a premium cannabis brand through packaging and superior merchandising is key to immediate and long-term growth of sales and revenue for both companies.
Washington law prohibits non-residents from obtaining a percentage of profits from the operations of marijuana licensees. Accordingly, the Licensing Agreement between OCI and Vodis USA establishes a graduated compensation schedule increasing the compensation to Vodis USA as sales and marketing goals are achieved. The compensation schedule, based on gross aggregate sales, ranges from $0.34 to $0.40 per dollar of Vodis branded product sold by OCI. The company anticipates revenues to Vodis from Vodis branded cannabis products sold by OCI, at full operational capacity, would be in excess of $2.0M annually based on today’s market prices.
Cannabis sales in Washington exceeded $1.1B in FY 2016, offering a promising opportunity for both Vodis USA and OCI to capitalize on the ever-growing legal cannabis industry.
Vodis and its subsidiaries cannot have any interest whatsoever in any proceeds as a result of production, processing or retail activities in the United States. It can license its brand and production consulting services to approved Washington State license holders to ensure that all products produced under the Vodis name and/or associated with the “VIP” brand meet or exceed the Vodis brand quality standards.