Grapefruit USA, Inc. (OTCQB “GPFT”) Announces One-Year Extension to its Private Label Cultivation Agreement with Prominent Southern California Cannabis Cultivator
LOS ANGELES & DESERT HOT SPRINGS, CA / ACCESSWIRE / August 18, 2020 / Grapefruit USA, Inc., (“GPFT”, “Grapefruit” or the “Company”) (OTCQB:GPFT) a California based cannabis distribution and manufacturing company, is announcing today that it has entered into a one-year extension of the previously-announced Private Label Cultivation Agreement (the “Agreement”) entered into with a prominent indoor cannabis cultivator on January 28, 2020. This Cultivator utilizes a state of the art, indoor Canopy grow system in Los Angeles, California to produce premium grade cannabis flowers such as Gelato 33 and other exotic strains. Under the terms of the extension, the Cultivator will continue to allocate a predetermined portion of its annual crop to Grapefruit subject to the terms of the January 28, 2020 Agreement.
With respect to Grapefruit’s one-year extension, Bradley J. Yourist, Grapefruit CEO, stated, “This is a big step forward, after only nine months of operations with a premiere cultivator, Grapefruit has generated enough good will and credibility in the highly skeptical grow community to be able to negotiate a twelve-month extension of our agreement with our current master grower and its cultivation team. The cannabis market is experiencing a huge previously unseen demand for indoor-grown, high-grade, “exotic” cannabis flowers. In the face of this unprecedented demand, it was mission critical to extend our Agreement for at least another year and well before its expiration. The extension provides Grapefruit with certainty that its supply chain will be uninterrupted and insure a steady revenue stream. The Company anticipates annual revenue of approximately $3,000,000 affording a 20% margin from this Agreement alone.
Grapefruit believes the newly extended Agreement as well as others under development will result in overall significantly higher revenues and margins from our distribution operations for the remainder of 2020 and early 2021. Margins will also be extended by the elimination of significant distribution operations one-time startup costs, non-recurring reorganization costs and elimination of legacy settlement costs. With this important step achieved, and our ongoing advances in the process of commercialization of the Company’s patented disruptive Hourglass™ THC+Cannabinoid time release cream delivery system, Grapefruit continues to build momentum and advances toward its goal of becoming a leading, fully integrated Cannabis and CBD company.”
In an unrelated development, Grapefruit is announcing that the Company’s Advisory agreement with Mr. Justin Costello expired on August 16, 2020 and has not been renewed.
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Grapefruit’s corporate headquarters is in Westwood, Los Angeles, California. Grapefruit holds California permits and licenses to both manufacture and distribute cannabis products. Grapefruit’s extraction laboratory and distribution facilities are located in the industry recognized Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park in Desert Hot Springs, located on the extension of North Canyon Rd., approximately 14 miles north of downtown Palm Springs, California, USA. To obtain further information on Grapefruit and its operations, please visit its website at https://grapefruitblvd.com/.
Safe Harbor Statement
Grapefruit cautions you that any statement included in this press release that is not a description of historical facts is a forward-looking statement. Many of these forward-looking statements contain the words “anticipate,” “believe,” “estimate,” “may” “intend,” “expect” and similar expressions. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the company and are subject to a number of risks and uncertainties inherent in Grapefruit’s business, including, without limitation: the company may not ever obtain additional funds necessary to support its business development and growth plans; and the company may not ever achieve the market success to reach or sustain a profitable business. In addition, there are risks and uncertainties related to economic recession or terrorist actions, competition from much larger cannabis companies, unexpected costs and delays, potential product liability claims, and many other factors. More detailed information about Grapefruit and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K, its Quarterly Report on Form 10-Q for the period ended June 30, 2020 and its Registration Statement on Form S-1/A. Such documents may be read free of charge on the SEC’s website at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Grapefruit undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.
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