2014-06-19 06:26 ET - News Release
CHLORMET SIGNS LOI TO ENTER WASHINGTON STATE LEGAL MARIJUANA MARKET
Chlormet Technologies Inc. has entered into an exclusivity agreement with Babcock Bench Farms LLC of Washington state to lease property, building and equipment in support of BBF's state-approved marijuana production and process licence under Washington State Initiative 502. This will be facilitated by a long-term lease and profit-sharing agreement.
Babcock Bench Farms has been approved under licence No. 412996 for a Tier 3 marijuana producer and processor licence in Washington state. BBF's master growers anticipate production of between 1,350 and 2,150 pounds of dried marijuana per quarter from the approved 21,000-square-foot indoor facility. For the past two years, the principals of BBF have been growing for the state under a non-profit co-operative for approved medical marijuana patients.
"With AAA Heidelberg's London, Ont., grow facility nearing completion and pending Health Canada's final approval for a MMPR licence, the company has been actively searching for real, attainable and diversified opportunities to continue to bring shareholder value," stated company president Yari Nieken. "We're extremely excited about the growth and income potential in Washington state with the BBF partnership."
All agreements will be subject the approval of the Canadian Stock Exchange and the signing of a definitive agreement will be subject to satisfactory due diligence by both parties.
About I-502
Washington State Initiative 502 passed by popular vote in November, 2012, allowing for the legalization of the production, processing and sale (retail) of marijuana and related products. A total of 1,724,209 yes votes were tallied, which represents 55 per cent of the state's population. Now that marijuana is legal, the Washington State Liquor Control Board will control and monitor the activities of the state licensees.
In 2013 the RAND Corp. completed a study measuring Washington state's marijuana market and concluded that marijuana consumption was significantly larger than the state's projection of 85 metric tonnes per year, and appeared to be more in line with an estimate of 135 to 225 metric tonnes per year.
The State of Washington has allotted a total of two million square feet of growing space for the licensed production of marijuana. Production licences are broken into three categories: Tier 1 for less than 2,000 square feet; Tier 2 for less than 10,000 square feet; and Tier 3 for between 10,000 and 30,000 square feet. Due to a significant excess of applications the state reduced the amounts to 70 per cent thus the largest square footage of growing space issued by the state was 21,000.
I-502 does not limit the amount of plants that can be grown with each licence. A licensee can manufacture as much product as its ability allows it to produce. And if the licensee produces a high-quality product then the demand in the marketplace should exceed the supply that the licensee can produce.
We seek Safe Harbor.
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