Cannabis Science Inc. (OTCBB:CBIS) a pioneering US biotech company developing pharmaceutical cannabis products, announces that on August 18, 2010, Cannabis Science signed with RockBrook Inc., its first manufacturing and development license for the Cannabis Science Brand of Pharmaceutical Products for the State of Colorado. The licensing agreement grants RockBrook the full latitude and rights to manufacture, develop, produce, distribute, and sell products developed from, or based on Cannabis Science formulations, and delivery systems for the Cannabis Science Brand of Pharmaceutical Products and Cannabis Science Ailment Formulations within the State of Colorado.
Dr. Robert Melamede, Ph. D., Cannabis Science Inc., President & CEO said, "Importantly, unlike big pharma, Cannabis Science will be able to immediately begin using data acquired from RockBrook patients using Cannabis Science Brands to evaluate our medical marijuana prior to FDA clinical trials. We are enthusiastic that our relationship with Mr. Pasquale and RockBrook has been established under a licensing and manufacturing agreement that is compliant with the current Colorado regulatory environment. RockBrook will immediately begin marketing and developing new Cannabis Science Brand of Pharmaceutical Products."
Under the terms of the Agreement RockBrook will pay Cannabis Science an initial license fee of USD $25,000, which is payable within the first year of the Agreement. As well, RockBrook will pay Cannabis Science a quarterly royalty payment of 50% of all positive revenues derived from the Cannabis Science Brand of Pharmaceutical Products. If RockBrook enters into any sublicensing agreements, Cannabis Science is entitled to royalty payments of 50% of all positive revenues received by the Licensee for sales of any Cannabis Science Brand of Pharmaceutical Products. Within 2 years of the execution of this Agreement RockBrook will invest a minimum of $250,000 in research and development directly associated with the Cannabis Science Brand of Pharmaceutical Products. RockBrook will also pay to Cannabis Science a yearly renewable license fee, payable annually on the anniversary of the execution of this Agreement, according to the following schedule; First Anniversary payment USD $25,000, Second Anniversary USD $50,000, Third Anniversary USD $75,000, Fourth Anniversary USD $100,000, Fifth and Successive Anniversaries USD $150,000.
Richard Cowan, Cannabis Science CFO, added, "Due to changes in Colorado Legislation, Cannabis Science was forced to cancel the Share Purchase and Management Consulting Agreements previously signed on May 8, 2010 with RockBrook and its sole shareholder, Mr. Adam Pasquale. On August 1, 2010, the HB 1284 legislation came into effect in the State of Colorado. The new legislation precludes any non-resident from having ownership in a Colorado-based medical cannabis dispensary. Due to the broad ownership of Cannabis Science, a public company with shareholders around the world, and the fact that no specific element(s) of the new Colorado legislation permits or inures the same resident-based ownership rights to a public company, the Company's legal counsel advised management to cancel the May 8th RockBrook acquisition, which Mr. Pasquale also agreed with. On July 30, 2010, we signed a Mutual Termination Agreement ("MTA") with RockBrook Inc. and its sole shareholder, Mr. Adam Pasquale. We are pleased that a mutually beneficial business relationship was reached with Mr. Pasquale and RockBrook, Inc. under the new legislation regulating Medical Marijuana in the State of Colorado."
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