Zenabis stock recovers on Wednesday after Zenabis Global (TSX:ZENA) (OTCPK:ZBISF) announced a cultivation agreement with Tantalus Labs.
Why is This Significant?
The cannabis industry may have gone through a lot of trouble for the majority of the year so far, but that has not stopped most companies from trying to improve their business operations. In a new development, Zenabis Global has announced that it has reached an agreement with Tantalus Labs Ltd, by which the former is going to use clones provided by the latter to grow cannabis. In addition to that, the cannabis that is harvested by Zenabis Langley is going to be dried, trimmed, and packaged by Tantalus Labs.
This particular arrangement, known as a cultivation agreement, between the two companies has been inked for a period of two years. In addition to that, in the future, the two companies can mutually agree to extend the arrangement by two years in successive renewals. It has been reported that Zenabis is planning to take its production levels many notches higher over the next two years. The production will then allow Tantalus Labs to manufacture many thousands of kilos of dried marijuana.
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At the time of writing, Zenabis stock is up 7% at $0.415 on the OTC market.
The Chief Executive Officer of Zenabis spoke about the agreement: "Given Tantalus Labs' meticulous approach to the design and construction of its own facility, we are pleased that it has selected Zenabis as a cultivation partner.”
Operational Update
Despite the important development, it is important to note that Zenabis stock has performed poorly over the past month and has lost as much as 50% of its value. Earlier this week, the company provided an operational update and reported its production for the month of September. In the month of September, Zenabis Global cultivated a total of 2,089 kilos of dried cannabis, which is a significant bump from its own forecasts.
The previous month, the company projected production of 1,731 kilos. However, despite the company’s better-than-expected operational update, Zenabis stock nosedived and fell by 15% on Tuesday.
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Featured image: DepositPhotos © AndreyPopov
