Aleafia Health (TSX: AH) this morning announced that it has entered into a binding letter of intent with that of Equinox International to export cannabis to the Israeli market, commencing in 2021. While a definitive agreement has yet to be signed, the binding LOI proposes a purchase commitment of 1,400 kilograms of dried cannabis in the first year of the arrangement.
Equinox International, a licensed medical cannabis company in Britain with operations within Israel, is said to be establishing a “land to brand ecosystem” in connection with the arrangement. The ecosystem is said to cover supply, distribution, branding, and retail operations.
The parties now have entered into an exclusive negotiation period for 45 days, wherein both parties will have to come to terms with a definitive agreement for the arrangement. The current proposal outlines an agreement based on a three year term wherein Aleafia is the exclusive supplier to Equinox within Israel. Second and third year purchase order minimums have not yet been agreed to, while the first year is pegged at 1,400 kilograms of dried cannabis flower.
The first shipment of product is said to be scheduled for the first quarter of 2021, pending the receipt of the required import and export permits, as well as the cultivation cycle at Aleafia. Permits have reportedly been applied for already.
Financial terms of the agreement have not been released.
Aleafia Health last traded at $0.50 on the TSX.
Information for this briefing was found via Sedar and Aleafia Health. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
