Before the opening bell, Laguna Blends, Inc. (OTC: LAGBF) announced the execution of a non-binding letter of intent with Cannaceuticals of California, USA (Canna) through which it plans to enter into a definitive manufacturing and exclusive license agreement for Canna’s cannabidiol (CBD) skin care line. The two parties have agreed to an exclusivity period running through July 29, during which additional negotiations and signing of the manufacturing and license agreement are expected to take place.
“Canna has spent a tremendous amount of time and financial resources to create what we believe is the highest quality CBD skin care line available on the market today,” Stuart Gray, founder and chief executive officer of Laguna Blends, stated in this morning’s news release. “By combining the known benefits of CBD’s into a skin care product, we anticipate that Laguna is poised to become a direct sales leader in the skin care industry.”
According to this morning’s news release, the terms of the letter of intent outline Laguna’s future purchase of the entirety of Canna’s existing inventory, including roughly 4,500 units of each of the eight existing Canna products. Laguna is expected to pay $250,000 on a monthly payment schedule over a six-month period, as well as a license fee of $100,000 in common shares upon final entry into the binding manufacturing and exclusive license agreement. In exchange for these payments, Laguna will be granted an exclusive license to sell Canna products in the United States and Canada for an initial period of two years, as well as the rights to sell Canna products in Asia, Europe and Mexico, pending regulatory approval and Laguna’s expansion into these markets.
Moving forward, Canna will continue to contribute its research and development expertise in CBD-derived skin care products while manufacturing additional units of its current products, as necessary to meet the inventory requirements of Laguna.
For members of Laguna’s affiliate program, the letter of intent with Canna could open the door for considerable sales growth in the coming months. According to a report by Market Research, the global skin care industry is expected to surpass $120 billion in 2016, with the U.S. market alone climbing to $10.7 billion by 2018. Pending due diligence and necessary approvals, Laguna expects to offer Canna products to its affiliate base as soon as August of this year, with expansion into Canada expected to occur before the end of 2016.
“By offering the Cannaceuticals skin care line of products to our affiliates, the Company anticipates an increase in product sales and recruitment of new affiliates,” concluded Gray.
For more information, visit www.lagunablends.com
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