Australia’s Algae.Tec Ltd (ASX: AEB) has begun planting its first four hectare medical cannabis crop in Uruguay.
The crop planting follows Algae.Tec’s signing of a Collaboration and Licensing Agreement with Urugayan-based Winter Garden Biosciences to grow, harvest, extract and sell specialised JDI 3.0 Sativa strain of cannabis plants, seeds and oils internationally.
Under the terms of the Collaboration and Licensing Agreement, Algae.Tec ‘s share of the revenue from this crop and future crops is 75%. Based on current market pricing for cannabis oil, seed extracts and fibre products, Algae.Tec’s revenue from this first crop is expected to be between US$4.5million and US$6 million from product sales.
Winter Garden spokesperson Julian Strauss described the crop planting as a major milestone for the company.
“This is an exciting advancement after more than a decade of establishing the company at the forefront of the medicinal cannabis sector. To have now commenced commercial growing of our proprietary genetics (JDI 3.0) and to be able in the near future to have both quantity and quality is a significant achievement.”
Algae.Tec Ltd Managing Director Peter Hatfull said Algae. Tec is now on the brink of revenue generation through the commercialisation and subsequent sale of this first cannabis crop.
He said the company expected sales to commence sometime in Q2 2018.
“Through our Collaboration and Licensing Agreement with Winter Garden, we are now actively planning the scaling up of operations in Uruguay and will report on some key initiatives very shortly. We are grateful for the hard work and commitment from Winter Garden in reaching this key milestone and we have an excellent partnership in place,” Mr Hatfull added.
Algae.Tec has also confirmed that it has finalised planning for the installation of supplementary process equipment including irrigation, nutrient distribution, drying and extraction facilities.
