Emerald Health Therapeutics, Inc. (CSE: EMH) (OTCQX: EMHTF) has entered into a license agreement (the “Agreement”) with FlowerPod LLC (“FP”), a private US company, providing FP with the exclusive use of certain Emerald patented technology for developing and marketing cannabis related products for use in all US states and other key geographies where adult use and/or medical cannabis is legal.
The initial prototype product designed by Emerald, utilizing its Defined Dose™ expertise, has been refined over the last 15 months through a collaboration between FP and Emerald. About 50% of cannabis consumers are largely influenced by the convenience of the consumption form when choosing a cannabis product, qualifying it as a top-5 influencer1. This soon-to-launch specialty product targets cannabis flower users and is expected to provide a more convenient method of consuming whole spectrum dried flower cannabis and ensure a consistent amount of active ingredient with every use of the product. This is expected to provide users with greater predictability and control of their cannabis consumption.
Given ongoing commercial and launch planning activities, full details of the product and intellectual property will be disclosed when FP commercially launches this new product, anticipated in Q4 of 2021. FP intends to bring this new product to market by initially partnering with leading licensed growers and distributors in the Northeast US. Based on the almost 50% greater population as well as legal recreational or medical cannabis use permitted in the states of this region, the Northeast US alone has the potential to exceed legal cannabis sales in Canada.
Pursuant to the Agreement, FP has the right to use Emerald’s intellectual property to manufacture and sell related products in all US states where adult use and/or medical cannabis is legal, with the option to expand globally (excluding select medical markets including Canada) upon meeting certain milestones. Emerald has also provided FP with a loan of US$350,000 that is repayable within two years with interest at a rate of 5%. In exchange, Emerald receives a 19% equity ownership position in FP and will also receive monthly R&D and IP license payments from FP.
In February 2021, FP completed its initial financing with individual and institutional investors to support commercial scale-up, product launch and marketing.
“Emerald’s core focus is science-driven product innovation and intellectual property development. We are pleased to have demonstrated the value of our product development expertise, as well as the appeal of our Defined Dose™ products, and our patent portfolio by structuring this attractive deal that enables a growth-focused entrepreneurial company to exploit this novel patent-protected product in the United States and potentially beyond, and allows Emerald and its shareholders to benefit from FlowerPod’s anticipated growth and success,” said Riaz Bandali, President and CEO.
1. BDS Analytics: Top Ten Cannabis Market Trends for 2019, January 2019
About Emerald Health Therapeutics
Emerald is committed to creating new consumer experiences with distinct recreational, medical and wellness-oriented cannabis products with an emphasis on innovation and product excellence.
Please visit www.emeraldhealth.ca for more information or contact:
Jenn Hepburn, Chief Financial Officer
(800) 757 3536 Ext. #5
Emerald Investor Relations
(800) 757 3536 Ext. #5
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements: Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. Such statements include: the effects of products developed by FP; the launch date of products developed by FP; partnerships with third parties; expansion to other geographical areas; payment of amounts owned to Emerald; and FP meeting certain milestones.
We cannot guarantee that any forward-looking statement will materialize, and readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements involve risks and uncertainties related to, among other things, changes of law and regulations; changes of government; failure to obtain regulatory approvals or permits; failure to obtain necessary financing; results of product development, production and sale activities; changes in prices and costs of inputs; demand for products; changes in business strategy; as well as the risk factors described in Emerald’s annual information form and other regulatory filings. The forward-looking statements contained in this press release represent our expectations as of the date hereof. Forward-looking statements are presented for the purpose of providing information about management’s current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Emerald undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law.
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