TORONTO, Nov. 02, 2018 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Biome Grow Inc. has announced that its Newfoundland and Labrador brand, Back Home Medical Cannabis Corporation, has entered into a 24,000-kilogram, three-year production and supply agreement with the Province of Newfoundland and Labrador. The announcement is one of the largest cannabis supply agreements in Atlantic Canada and one of the top five largest deals of its kind in the Canadian cannabis market by quantity. The company expects that the Supply Agreement will represent close to $100 million in revenue per annum beginning in 2020.
Back Home’s new $60 million production facility will operate from Barachois Brook on the west coast of Newfoundland. It will be built in multiple phases consisting of an initial 18,000-square-foot facility, followed by an expansion of an additional 150,000 square feet in 2019. The expansion will bring the company’s total footprint to 168,000 square feet, making it on of the largest cannabis production facilities in Newfoundland and Labrador.
Back Home is expected to produce Newfoundland and Labrador-grown cannabis in 2019 and plans to operate its production facility in the province for a minimum of 20 years. Pursuant to the Supply Agreement, Biome has committed to supplying up to 4,000 kgs in the first year of its three-year contract, with 10,000 kgs annually in the following two years from across its portfolio of production assets. The transaction also allows Biome to recover up to $52 million through reduced remittances to the Newfoundland and Labrador Liquor Corporation (NLC).
Biome will receive access to five retail licenses, leading to additional investments in development and construction beyond the costs associated with the development and construction of the production facility. This also positions Biome as one of the few cannabis enterprises in Canada to date with approved vertical integration from production through to retail distribution. The Supply Agreement will facilitate the creation of a minimum of 120 jobs at Back Home’s production facility, with approximately an additional 80 jobs for Back Home’s five retail stores and associated infrastructure in Newfoundland and Labrador. The first of the stores is expected to be located in Western Newfoundland in close proximity to the production facility.
Biome will also invest $500,000 over five years for research and development in the Province. The company’s investment in the provincial cannabis ecosystem ensures Biome’s cannabis products are eligible for sale in the Province through the Newfoundland and Labrador supply chain.
“We’re very excited to partner with the Government of Newfoundland and Labrador on the largest cannabis supply agreement in Atlantic Canada, and one of the top five in the country. Today’s announcement is part of Biome’s strategic plan to invest in sustainable production facilities and ecosystems across Atlantic Canada. The region provides Biome with the benefit of having a local customer base and governments that value the company’s ‘invest local, hire local and brand local’ approach to building sustainable cannabis ecosystems,” says Khurram Malik, CEO of Biome. “Furthermore, this supply agreement allows Back Home to make the investment to create a large employment base that will create high quality products for both the local market and for customers in international jurisdictions that are looking for a ‘Made in Canada’ offering.”
Back Home branded products are expected to be sold at Biome retail locations and they will be a key partner and supplier to the Government of Newfoundland and Labrador of finished cannabis product.
“Back Home is proud to be a locally operated company that will create high quality employment and contribute to the local economy through the production and sale of cannabis products grown right here in Newfoundland and Labrador,” said Dave Callahan, president of Back Home.
Biome is a growing Canadian cannabis company that has acquired five subsidiaries and has so far announced approximately 390,000 square feet of production capacity in operation or under development in Ontario and Atlantic Canada.
