(Yicai Global) June 21 -- Dalian East New Energy Development announced details of a joint venture in the US to launch an industrial hemp testing service.

The company's share [SHE:300125] price closed up 5.44 percent at CNY15.51 (USD2.30) on the news, consistent with a recent trend in the market of Chinese companies' stocks going through the roof after jumping on the hemp bandwagon.

East New Energy Development penned the JV agreement with Las Vegas, Nevada-based cannabis planter and primary processor Redco A through the former's wholly-owned Shanghai unit, the announcement said, adding the company will contribute USD3.6 million in cash for a 60 percent stake in the JV, while Redco A will invest USD2.4 million for the rest.

The JV will provide test services and traceability and anti-counterfeiting services for derivatives of the active ingredient cannabidiol , including its qualitative and quantitative detection, tests for pesticide residues, heavy metals and microorganisms, and supplier qualification certificates, under the agreement.

The company hopes to build global trust in Chinese exports of CBD products through anti-counterfeiting tracking services to enhance the willingness of North American manufacturers and consumers to buy, the announcement said.

The pair agreed that the US partner will obtain all licenses, permits and certifications required for the operation of the test center within the agreed time, including the cannabis product testing business license issued by Nevada's tax authorities.

Unlike most companies that plant or process hemp, East New Energy Development has chosen to enter the field of product testing and certification.