Louisiana State University has reviewed all seven applications submitted by prospective marijuana contractors and has determined that production contract for the LSU medical marijuana program should be awarded to a public company.
LSU has requested to enter into an agreement with GB Sciences (OTCQB:GBLX) to produce, process and extract medical marijuana for the university, one of two state-sanctioned medical marijuana cultivators, as reported by WBRZ on the evening of June 14, 2017.
LSU’s Board of Supervisors will review the request at its meeting on June 22.
Contractual Details
According to a notice from LSU’s Board of Supervisors, “Based upon the offer from [GB Sciences], the initial five (5) year contract would bring a minimum guaranteed financial contribution to the LSU AgCenter of $3.4 million, or a commission of 10% of gross receipts, whichever is greater.”
If the Board of Supervisors approves LSU’s selection, GB Sciences would have the option to renew its contract with the LSU Agriculture Center for two additional five-year terms.
The offer from GB Sciences would also require the company to make a $500,000 annual contribution to research investment at the AgCenter to further research on plant compounds and varieties as well as extraction and delivery methods. If the research yields discoveries subject to intellectual property rights, LSU AgCenter would own 50% of those rights.
SFO for LSU Medical Marijuana Program
The LSU Agricultural Center issued a Solicitation for Offer on Feb. 8 and it received seven applications by the deadline on March 21, only four of which met the SFO’s mandatory minimum qualifications.
The four remaining applicants for the LSU medical marijuana program gave oral presentations to LSU’s evaluation team and then submitted best and final offers. After calculating a score for each offer based upon criteria in the SFO, the evaluation team selected the offer from GB Sciences.
Price Action
GB Sciences announced its application to the LSU medical marijuana program on April 3, with GBLX opening at $0.36 and closing at $0.353 on that day.
According to the Marijuana Index, GBLX opened at $0.25 on June 14 and closed at $0.24, before news on the LSU medical marijuana contractor had broken.
