In November 2019, Shenzhen Noposion Agrochemical Co., Ltd. (Noposion) made an announcement, stating that it has signed the Agreement Framework on Equity Transfer and Capital Increase with Yunnan Chengbang Fuji Biological Technology Co., Ltd. and Yunnan Huayun Jinxin Biological Technology Co., Ltd. (Huayun Jinxin).
After the announcement, Huayun Jinxin's industrial cannabis project and fuel ethanol project would be separated, and assets, debts and related resources, liabilities and obligations that are related to industrial cannabis were separated to build a new company. When the separation is finished, Huayun Jinxin would only retain all relevant license assets such as industrial cannabis business and corresponding instrument and equipment assets, industrial cannabis planting and processing license qualifications, and would involve itself in the liabilities relevant to industrial cannabis, and related resources and rights such as the industrial cannabis production and operation management team.
According to the Agreement, Noposion will increase the capital of Huayun Jinxin by USD2.8 million after the completion of the separation. This is mainly used for industrial cannabis planting, purchase and processing of cannabis flowers and leaves, and operation of industrial cannabis business. This capital increase would allow Noposion to hold a 20% stake in Huayun Jinxin.
“Based on our long-term research and related operations, we believe that industrial cannabis is an extremely promising industry with important application value in the fields of medicine, health care, daily chemicals and food,” said Noposion. The company relies on Huayun Jinxin's business capabilities in planting, production and processing and expects Huayun Jinxin to give full play to its advantages in cultivation and planting, drug extraction, and development and operations of end products. Under this, Noposion would be able to have a focus on the industrial cannabis business.
This year in 2019, Noposion has cooperated with scientific research institutes to launch research on a number of industrial cannabis related topics. At the same time, it has actively conducted research on related industries in foreign countries, looked for partners, and developed overseas markets. In the next 2-3 years, Noposion plans to construct a one-crop industrial chain that is focused on industrial cannabis only from breeding, planting, processing & extraction to end-product applications, develop the business in Yunnan Province, Heilongjiang Province, and the international market at the same time actively and steadily, so as to create a new strategic source of growth for the company.
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