ESCONDIDO, Calif., March 20, 2019 (GLOBE NEWSWIRE) -- via NetworkWire -- PRESS RELEASE -- Marijuana Company of America Inc., a hemp and cannabis corporation, has announced that MCOA has entered into a letter of intent (LOI) with Natural Plant Extract of California (NPE) and its subsidiary, Northern Lights Distribution, LLC (NLD), to acquire a 20-percent ownership interest in NPE, and to establish a Joint Venture (JV) to operate a California cannabis delivery service named Viva Buds.
Under the terms of the LOI, MCOA has committed to contribute $2,000,000 in total cash to the project, as well as common shares of the Company with a value of $1,000,000. In exchange, MCOA will own a 20-percent equity position in NPE. In addition, both NPE and MCOA will form a JV to operate Viva Buds and will share in the profits on a 50/50 basis.
NPE has obtained both state and city licenses for volatile manufacturing, distribution and retail delivery of cannabis products. NPE has a long-term lease with favorable terms for its location at 11116 Wright Road, Lynwood, Calif. NPE will manage all operations pertaining to distribution, manufacturing, and delivery of cannabis products, and MCOA will provide capital, consulting and marketing services. NPE is currently generating revenue through its distribution business segment under NLD, which it launched in 2018 and is undergoing construction of its manufacturing lab since it recently obtained all of the necessary state and local permits.
As part of the JV with NPE’s distribution company NLD, MCOA formed a wholly owned subsidiary called Viva Buds Inc. to serve as the marketing arm for NLD’s new retail delivery service in California. The company will initially focus on delivering cannabis products to Southern California and then rollout to other cities statewide. NLD will contribute up to $300,000 in inventory of cannabis products to assist in the start-up of this venture and will oversee all delivery and fulfillment of orders. MCOA will provide a vast array of marketing services and technology to promote and build its Viva Buds brand.
The parties are in the process of conducting due diligence and completing a material definitive agreement.
Donald Steinberg, CEO of MCOA stated, “This partnership will enable MCOA to establish itself as a major player in the Cannabis arena. All licenses are in place to allow for vertical integration from farm to consumer. We are excited to expand our business model to now include marketing our new THC brand Viva Buds through our fully licensed partner NPE. The NPE team has a great deal of industry knowledge and has an industry disruptive business model. This is a huge strategic move for MCOA!”
Alan Tsai, NPE’s CEO, stated, “We are excited to become partners with MCOA as it will help us to finalize the development of our manufacturing plant faster than planned. We are aggressively focused on maximizing our market share by securing distribution, manufacturing and co-packing contracts with reputable brands throughout California. We believe that this is a crucial year for expansion in the cannabis industry in California and it’s our goal to position our company as a key player in the industry in multiple verticals."
