Algae Partners With Private LP to Develop Cannabis Oil Products

The deal is set to last three years with a renewal option.

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Algae Dynamics (OTCQB:ADYNF), a relatively new company announced it has entered into a partnership (August 16) with a Canadian Licensed Producer (LP) to expand the use of their oil extraction technology and the development of cannabis oil products.

Algae signed a letter of intent with private LP Bonify, as part of this deal Algae will see its product travel north for research purposes at The University of Waterloo. This partnership is set to last for three years to starts with an option to renew it. Paul Ramsay, chairman president and CEO of Algae said the company expects initial revenue within six to nine months after the financing gets completed.

“We believe this [deal] gives us an improved pathway to early revenues as well as a reliable high-quality source of cannabis oil for the universities to support our important algae-cannabis oil research,” Ramsay said in the company’s press release.

Below are the terms of this deal according to Algae:

  • The purchase and installation of cannabis oil extraction equipment by the Company in Bonify’s facility.
  • The processing of cannabis material supplied by Bonify and other Licensed Producers in the oil extraction facility.
  • The supply of cannabis oil and algae omega-3 oils to The University of Waterloo and University of Western Ontario to support the Sponsored Research Agreements that the Company has in place with the two universities.
  • The sharing of direct expenses, and, after adjustment for the market value of cannabis material supplied by Bonify and third parties, sharing of revenues from the sale of cannabis oil and algae-cannabis oil products.

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Due to the deal, Algae said it won’t be moving forward with a previously announced joint venture with Avanti Rx Analytics

The president and CEO of Bonify said they see many benefits of partnering with “innovative companies” like Algae.

Algae sells itself as a cannabis company doing business in Canada with no exposure to regulations from the US. The company combines the collaboration with cannabis extraction in order to develop hemp and algae oil “premium products.”

The company plans to apply for an oil extraction and licensed grower license with Health Canada, the country’s authority in regulated cannabis and cannabis-related products.

Investor Takeaway

While Algae is a young and significantly small company in the cannabis landscape, its capability to land research deals with both the University of Waterloo and the University of Western Ontario should provide investors with an interesting proposal. This partnership could represent a solid step for this small company seeking its space in the marketplace.

At the market close on Wednesday, shares of Algae Dynamics increased 14.29 percent over a one-day period to $0.08.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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