Now that the US has legalized hemp farming, Canadian cannabis companies are heading south to take advantage of the hemp-CBD market. The latest mover is cannabis producer MYM Nutraceuticals (CSE:MYM) (OTCQB:MYMMF). This CBD stock is currently up 8% on the news, selling for $0.57 CAD on the CSE.
What's happening with MYM?
CBD Stocks to Watch: MYM Enters US Hemp
Earlier today, MYM Nutraceuticals announced an agreement with Elite Ventures Group to grow 120 acres of hemp in Nevada, US. The purpose of growing the hemp is, of course, to derive CBD (cannabidiol) from it. CBD is a natural compound found within the hemp plant that has multiple health and relaxation benefits when consumed.
This new agreement places MYM Nutraceuticals at the heart of the CBD market in the US; a market estimated to hit $22 billion USD by 2022 according to the Brightfield Group.
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CBD Stocks: The Deal
According to the press release, MYM will provide capital to Elite Ventures to the value of $500,000 USD. For this, it will have rights to 50% of the CBD grown on the 120-acre plot of land in Nevada.
As per the deal with MYM, Elite will have full responsibility to plant, cultivate, and process the hemp and further it "will also arrange for the processing and sale of the biomass at no less favorable terms than those found in the Elite supply agreements."
The estimated yield from the 120-acre plot is an approximate "120,000 pounds per harvest with a CBD level of 10%-19%."
The potential revenue from this operation is $26 million USD, of which "MYM is entitled to 50% less processing and sales fees."
According to Howard Steinberg, CEO of MYM, "This agreement signals an important step forward in our plan to be a significant cultivator of hemp to satisfy the increasing demand of biomass and CBD worldwide."
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CBD Stocks: Elite
Elite Ventures Group is a subsidiary of Vancouver-based cannabis company CROP Infrastructure Corp. (CSE:CROP) (OTC:CRXPF). According to CROP CEO Michael Yorke, the MYM partnership is "very significant" as it brings "additional exposure to our organic hemp products."
CROP's portfolio includes cultivation facilities across the US in the high-demand states of California, Washington State, and Nevada. It also has a cannabis-infused beverage line called Canna Drink, along with 16 cannabis brands and a growing portfolio of stakes in other cannabis ventures.
MYM and CROP both offer strong CBD stocks potential for an optimal entry price in this young market. Investors, keep an eye here!
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