Eve buys a tea tree farm, solidifies position as cannabis purveyor

Eve investments has bought the tea tree business that formed the basis of a cannabis deal in May.

The health products investor (ASX:EVE) is buying Jenbrook, a NSW tea tree oil producer for $2.9 million in cash.

In May, Eve-owned Meluka Health, Jenbrook and The Hydroponics Company (ASX:THC) signed a deal where THC would use one of Jenbrook’s farms to grow cannabis. The plan is to then supply that product to Meluka.

The farm comes with a 1147 acre old growth tea tree plantation, a 1000 acre plantation used for oils distributed in the US and Europe, and a 49 per cent-owned distributor.

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Buying Jenbrook gives Eve control over the growing site, medical products and distribution arms of that medical cannabis deal.

Part of the deal is also a $272,040 cash payment and 30.2 million shares to clear loans to the company by its management.

Jenbrook reported unaudited revenues of $2.1 million for the 2017 financial year and $US1.5 million from the distributor.

Shares in Eve were down 11 per cent on Thursday morning at 0.8c.

Shares in THC however were up 6 per cent to 56c after recreational cannabis legalisation passed the final hurdle in the Canadian Senate.