Westleaf Inc. precedent to the white-label cannabis derivative product sale agreement between the Company’s wholly owned subsidiary Westleaf Labs LP and Delta 9 Cannabis Inc. have been completed, and Westleaf Labs has received the first order from Delta 9 for an initial three-month supply of vape pens and cartridges. This first order represents anticipated revenue of ~$740,000 starting as early as January 2020.
“This is another important milestone in the development of Westleaf, as we add the critical processing and manufacturing component to our vertically integrated strategy,” said Scott Hurd, President and CEO of Westleaf. “This operationalizes a key component in the cannabis supply chain and one that we expect will see increase in demand as we enter Cannabis 2.0, and the legalization of a myriad of new products.”
The White-Label Agreement provides for Westleaf Labs to produce a minimum of ~$4 million of white labelled cannabis derivative products, with the option to increase to $16 million per annum. The one-year agreement was announced on July 24th and Westleaf Labs received its Health Canada Standard Processing Licence on October 11th and is set to begin processing.
- Delta 9 Order –The initial order represents anticipated revenue of ~$740,000 over three months. The one-year deal commits Delta 9 to acquire a minimum of ~$4 million with an option to increase up to ~$16 million per year.
- Enhanced Product Selection for Retail – The White-Label Agreement is expected to create value added products to be sold through both Delta 9’s retail stores in Manitoba, through Westleaf’s wholly-owned Prairie Records stores in Saskatchewan as well as through provincial wholesalers.
- Safe and Regulated Products – The production of vape pens and cartridges at The Plant by Westleaf Labs, as well as the entire Westleaf supply chain, will be highly regulated and adhere to the strictest safety standards of Health Canada.
With the onset of Cannabis 2.0 and the legalization of a wide variety of new derivative cannabis products, Westleaf is expecting strong industry wide demand for efficient and high-quality extraction, processing and product manufacturing to meet the needs of the new product manufacturers.