Space Cowboy, a Colorado company that grows marijuana, is preparing for a $2.5 million investment.
In exchange, the company will give a 25 percent equity stake to a new joint venture formed for the deal, according to a press release announcing the transaction.
California-based Marijuana Company of America and Global Hemp Group, a Canadian firm, signed a letter of intent with Space Cowboys to make the investment. The money will be used to expand Space Cowboy’s cultivation operation.
Space Cowboy is in its fourth year of operation and is in full compliance with Colorado state law and the Colorado Department of Agriculture, according to the release. The business consists of both indoor and outdoor cultivation of highly concentrated cannabidiol (CBD) hemp, a form of marijuana used generally for medical purposes. Marijuana Company of America researches, develops and sells legal hemp-based consumer products containing CBD under the brand name hempSMART, which targets general health and well-being.
“MCOA has always been interested in developing hemp farms and processing here in the United States. By initiating this joint venture, the company will accomplish this objective along with securing its supply chain of raw cannabinoids. It is an important step in the continued development of the hempSMART brand, which distributes a hemp-based cannabinoid product line,” said CEO, Donald Steinberg in the release.
MCOA and GHG plan to acquire additional hemp varieties that would be suitable for local conditions in New Brunswick, and expand total acreage to at least 125 acres for the 2018 cultivation. Last month, Space Cowboy was retained to provide expertise on additional hemp varieties, expansion, cultivation techniques and production processes designed to increase cannabinoid yields and profits.
The companies are making preparations for the upcoming changes to Canadian legislation expected in 2018 that will allow cannabinoid extraction from hemp.
Global Hemp Group is a publicly traded company founded in 2012, headquartered in British Columbia, with base operations in Montreal and Southern California.
The deal must still meet regulatory approval and satisfy due diligence requirements.
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