CannTrust Trades Higher After Confirming US Launch In California
CannTrust signed a non-binding letter of intent that will give the company access to more than 3,000 acres of farmland for hemp production with Elk Grove Farming, a diversified farming company. CannTrust and Elk Grove will each hold a 50% stake in a new entity.
CannTrust said it's looking to become a "trusted supplier" of high quality hemp-derived CBD formulations at scale. Management expects increasing demand for hemp-derived CBD formulations from both international retailers and product manufacturers.
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Why It's Important
CannTrust CEO Peter Aceto said the company's launch of operations in the U.S. is "another bold move" intended to gain access to the "largest international CBD market in the world."
"We continue to focus on delivering on our vision of becoming a global provider of innovative cannabis-based and hemp-derived products," he said.
The cannabis company said it will invest up to $20 million through the end of 2020 to support its growth prospects in the U.S. The investment includes its share of the cultivation cost along with harvest and post-harvest processing for the joint venture. The capital investment is based on estimates for up to 300 acres for cultivation in 2020.
CannTrust shares traded higher by 4.5 percent at $5.15 in Wednesday's pre-market session.
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