MPX International Corporation MPXI MPXOF announced it has completed definitive agreements to install low-cost cultivation using hi-tech greenhouses on the Sonop Farm, located in the wine-growing region of Stellenbosch in South Africa’s Western Cape, 50 kilometres east of Cape Town.
The production from the company’s operations in South Africa is expected to support MPXI’s operations in Malta. Upon receipt of a license to import, extract, produce finished products and distribute cannabis, subsidiary MPXI Malta Operations Ltd will produce cannabis oils and cannabis derivative products and pursue regulated medical cannabis distribution opportunities in Europe through Salus BioPharma Corporation, a wholly-owned subsidiary of the company, as well as in Canada and Oceania.
MPXI has acquired an 80% interest in First Growth Holdings Ltd. with the remaining 20% held by Simonsberg Cannabis Pty Ltd.
Construction commenced on the first cultivation phase of the project in September. The company and Simonsberg loaned a principal amount of $1.7 million on the construction of the project with $500,000 from Simonsberg at an interest rate of U.S. LIBOR plus 3% per annum.
Additionally, First Growth will pay to Simonsberg a royalty of US$0.10 per gram of dried flower shipped.
“As part of our strategy to create a cost-effective global supply chain, MPXI needed to create a source of high-quality, but low-cost cannabis biomass which could be easily exportable to Europe and other high- value cannabis markets,” said W. Scott Boyes Chairman, President and CEO of MPXI. “We explored several potential cultivation jurisdictions taking into consideration relative production costs, sovereign risk, comparative ability to achieve GACP and EU-GMP certifications, readily-available infrastructure, governmental and legislative support for cannabis projects, the stability of the business environment and the availability and quality of local management/partnerships. South Africa, and the Western Cape, in particular, proved to be the best venue with high marks in each category.”
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