BPH Energy (ASX: BPH) has announced its new Chile-based medical cannabis investment, Patagonia Genetics SPA, has purchased its first bulk order of cannabis fertiliser and biostimulant products under a global distribution deal.
Earlier this month, BPH acquired an initial 10% interest in craft cannabis company Patagonia Genetics. Under a signed term sheet, the company has the option to increase its stake to 49%.
Patagonia Genetics has secured the exclusive worldwide distribution rights (excluding Chile and Argentina) to Chile’s leading cannabis fertiliser range Wonderland Agronutrients, which includes ‘home grow’ and algae-based biostimulant products.
In today’s market update, BPH said Patagonia Genetics has purchased its first 1,300 litres of Wonderland products to send samples to major licenced cannabis producers and ‘grow shops’ internationally, who have “shown interest”.
Wonderland’s home grow range comprises: a three-stage biostimulating fertiliser package; a copper-based fertilising product that prevents and attacks fungi; an organic pesticide named ‘Outpest’; and a root stimulant known as ‘Raizer’.
Wonderland’s algae-based biostimulants are a three-stage treatment for the rooting, vegetative and flowering stages of cannabis plants.
The biostimulants range are all concentrated marine algae-based extracts that are intended to “stimulate the metabolism and favour the fitorregulation” of the plants, BPH said.
According to initial modelling completed by Patagonia Genetics, there is “potential for margins of between 60-80%” on the Wonderland distribution deal.
Oil and gas developments
BPH is a diversified company with investments in both the biomedical technologies and the oil and gas sector, including a 22.6% direct interest in private oil and gas explorer Advent Energy.
Advent holds an 85% stake in petroleum exploration permit PEP11 in the offshore Sydney Basin off New South Wales in joint venture with Bounty Oil & Gas (ASX: BUY).
In May 2018, a wholly owned subsidiary of Advent entered into a conditional farm-in agreement with private company RL Energy, whereby RL could earn up to 60% in PEP11 by completing a 3D seismic survey in the permit and carrying Advent’s costs in the survey up to $4 million.
However, controversies arose in the deal and a legal battle between BPH and Advent’s parent entity MEC Resources (ASX: MMR) ensued over the earlier half of 2019.
In a separate announcement, BPH today advised the market that Advent has now terminated by mutual consent the RL Energy joint venture agreement.
It’s existing joint venture with Bounty remains in place.
BPH said Advent and Bounty are now reviewing PEP11’s work program and evaluating proceeding with the drilling of a well at the Baleen drill target, subject to regulatory approvals.