Upper Street Marketing Announces Acquisition of FDA Licensed Pharmaceutical Manufacturer as Regulators Enforce Hemp and CBD Manufacturing Standards
SAN DIEGO, CA, July 08, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE – Upper Street Marketing Inc. (OTC Markets: symbol UPPR) and PrimaPharma Inc. (“PPI’) (www.Primapharma.net) of San Diego, California, an FDA-licensed pharmaceutical manufacturer, have signed a Letter of Intent (“LOI”) providing for UPPR to acquire an 80% interest in PPI.
The letter of intent memorializes the commercial relationship the companies have “cultivated” since January 22, 2019 in which PrimaPharma Inc., agreed to provide UPPR with services and support for the development of hemp derived CBD products for sale and distribution utilizing FDA current Good Manufacturing Practices (cGMP).
“Over the last four months our relationship with PrimaPharma Inc., proved to be such a natural fit that the principals on both sides realized we can do even more together,” Upper Street CEO Joseph Earle explained. “With this agreement, UPPR has many additional tools and resources to expand our footprint in the rapidly expanding CBD industry and beyond. FDA cGMP standards will require vertically integrated seed-to-consumer regulatory requirements that are currently missing in much of the current CBD industry.”
Earle further explains, “I have worked with members of the PrimaPharma team for a decade. We are absolutely a great fit. “The PrimaPharma team are experts at GMP. The further regulatory reach described by the FDA in recent Washington DC hearings, make cGMP compliance mandatory for domestic CBD providers. Consumers need confidence in the supply of CBD’s.”
Under the terms of the LOI signed today, UPPR will provide the necessary capital to expand PrimaPharma’s manufacturing and laboratory capabilities. The expanded capabilities will greatly extend the ability of PPI to deliver sterile products and for UPPR to deliver mass CBD production to its target markets and seal the vertical integration loop.
PrimaPharma will add approximately $5 million in assets and is cash-flow-neutral at a $6+ million run rate. Following an audit, the acquisition as currently structured will be accretive in the first year after closing, which UPPR management anticipates in four to six weeks.
Strategically, the union of UPPR with PrimaPharma also guarantees that production capacity will expand at a moment when retail demand for CBD isolates and distillates far outstrips supply.
Fortune magazine and other publications have contemplated a 100X surge in CBD consumption between now and 2023, at which point UPPR and other producers will need to ramp up output from a currently minimal 50,000 Kg of isolate to as much as 3.5 million Kg.
An estimated 7% of Americans are currently consuming CBD products, with that population conservatively expanding 30% (to 50 million adults) by 2025. Given the fragmentation and inefficiency in the newly legalized industry, strategic leadership is essential.
UPPR’s newly leased 13,000 square foot laboratory and manufacturing facility is adjacent to PrimaPharma’s existing San Diego operations, allowing for a nearly seamless development of processes and quality systems necessary for the production of hemp derived cGMP products.
