Before the opening bell, CD International Enterprises, Inc. (OTC: CDII), through its wholly-owned CDI Shanghai Management Company subsidiary, announced its entry into a multi-year distribution agreement with Zhangjianjie Shengshi Agricultural Development Company (“Shengshi”) relating to the distribution of high-grade cannabidiol (CBD) crystal in the United States. Per the agreement, Shengshi will be responsible for large-scale production of CBD, which it processes from industrial hemp grown in China. From this production, up to 100 kilograms per month, or 1,200 kilograms per year, will be provided to CD International for U.S. distribution, with CDII maintaining exclusive U.S. distribution rights for an initial period of 10 years.
“We are very excited to enter this brand new business to develop a new profit center,” Dr. James Wang, chairman and CEO of CD International, stated in this morning’s news release. “CBD supplements have become a hot spot in the health products market in the U.S. … If we are able to distribute 100 kilograms per month or 1,200 kilogram per year in the U.S., we would generate over $60 million in revenues according to the current market wholesale price. Management is confident that our new business could generate substantial profit opportunities for our shareholders for years to come.”
This morning’s announcement follows a January news release in which CD International announced its entry into a one-year consulting agreement with Shengshi. Through that agreement, CDII will be offering Shengshi a variety of consulting services ranging from business development and market promotion to more specialized consultations regarding garden design, landscaping and management of online retailing, among others. Wang originally alluded to CDII’s plans to “develop a distribution business of Cannabidiol (CBD) extract out of industrial hemp in both North and South Americas” in the January update.
Despite the ongoing legal battle related to both medicinal and recreational marijuana use within the United States, CBD has already been legalized in all 50 states. Lacking a significant concentration of tetrahydrocannabinol (THC), which is responsible for the psychotropic effects stemming from cannabis use, CBD has been shown effective in treating a variety of ailments, including epilepsy, Alzheimer’s disease and cirrhosis of the liver.
According to a recent report published by The Hemp Business Journal, CBD is currently one of the fastest-growing market categories in the U.S. hemp and legal cannabis industries, boasting a compound annual growth rate of roughly 59 percent. The CBD industry accounted for an estimated $202 million in consumer sales in 2015, and forecasts call for sales to reach $2.1 billion by 2020.
For more information, visit the company’s website at www.CDII.net