Aphria Inc (TSE:APH) and SecureCom Mobile Inc reported the successful preliminary step of their previously reported U.S. expansion strategy. The former firm, via strategic investment into DFMMJ Investment Ltd., a special purpose private firm, finalized a management deal with Chestnut Hill Tree Farm, LLC. DFMMJ’s plans to continue to target key U.S. states that have permitted medical use of pot and meets its strict investment criteria.
Chestnut is a Florida nursery approved by the Office of Compassionate Use as a dispensing firm of medicinal cannabis to patients in need in Florida. Chestnut owns one of 7 licenses approved in Florida, which for now exhibits almost 14% of the U.S. medicinal cannabis market with an estimated market size of more than $1.1 billion at maturity.
The management deal, which was permitted by the Department, approves DFMMJ to exclusively operate and manage Chestnut’s cultivation, dispensing and processing of medicinal cannabis to patients across Florida, and offers DFMMJ with the exceptional advantages of the finances from Chestnut’s businesses. In conformance with the management deal, DFMMJ will buy certain assets associated with the business operations. It is expected that following new regulations are launched in Florida, Chestnut will, in adherence with the guidelines and after regulatory nod, move the license to DFMMJ.
The CEO of Aphria reported that it is a thrilling moment for them. Chestnut is one of a few licensed manufacturers serving a state that has a population of more than 21 million people. For Liberty and DFMMJ, this marks as an entry into an interesting market. Liberty will possess the opportunity to use Aphria’s agricultural and pharmaceutical expertise.
Aphria’s low cost production processes and intellectual property will further lead Liberty’s growth. Ensuring Floridians are offered with accessibly priced, safe, pure and high-quality medical cannabis products. It is just the start for company’s plans to be a major player in the medicinal cannabis industry globally.