PharmaCieolo Ltd. (TSXV: PCLO) has announced a supply agreement with Xphyto Therapeutics Corp (CSE: XPHY). The three year agreement will see PharmaCielo provide Xphyto with medical grade cannabis derivatives such as THC isolates and oil extracts which after further development, processing, and manufacturing, will be destined for the German cannabis market.

As per the agreement, PharmaCielo will begin supplying Xphyto with cannabis products commencing in the second half of 2020, with a minimum supply of 30,000 kg within the three year duration, where shipments each year will progressively increase. PharmaCielo’s cannabis supply will be further processed in Xphyto’s Biberach manufacturing facility, which is European Union Good Manufacturing Practice-certified (EU-GMP).

Xphyto plans to use the supply of cannabis derivatives to manufacture topical treatments, oral films, and transdermal patches to its German consumers.

As part of the arrangement PharmaCielo was granted purchase warrants for a total of 500,000 Xphyto common shares at an exercise price of $2.00 with an undisclosed expiry. In addition, as a condition of the agreement PharmaCielo will purchase $500,000 worth of Xphyto’s unsecured convertible debentures. The debt securities have a date to maturity of two years and can be converted into 500,000 common shares. The debentures pay an annual interest rate of 8%. Further, PharmaCielo will be granted an additional 500,000 warrants at an exercise price of $1.50 each.

PharmaCielo processes and supplies medical-grade cannabis products and derivatives to large distributors, and has its headquarters in Canada.

PharmaCielo Ltd. is currently trading at $3.55 on the TSXV.

Information for this briefing was found via Sedar and PharmaCielo Ltd. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.