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Naturally Splendid Sells Manufacturing Stake to Refocus Efforts

Ryan Allway

March 5th, 2018

Exclusive, News, Top Story

The hemp industry has experienced tremendous growth over the past several years and there are no signs of slowing down. According to the Hemp Business Journal, the CBD market could reach $2.1 billion by 2020 with hemp-based products accounting for $450 million of those sales. This represents a 700 percent increase in revenue from 2016, which makes hemp-based CBDs one of the cannabis industry fastest growing subsets.
Naturally Splendid Enterprises (TSX-V: NSP) (OTCQB: NSPDF) is a biotechnology and consumer products company focused on developing, manufacturing, and licensing an entirely new generation of plant-derived, bioactive ingredients, nutrient dense foods, and related products. After selling its interest in POS BPC Manufacturing Corp., the company has a significant influx of capital that it can use to execute on its strategic business plans.

Naturally Splendid Sells POS BPC Stake

Naturally Splendid acquired a 51 percent interest in POS BPC Manufacturing Corp. on June 15, 2017 for $1,971,000 in cash and stock. After a series of advances in extraction and formulation methods, the company determined that funds that would be required to upgrade BPC to take advantage of these advancements would be better spent expanding capacity at its wholly-owned Pitt Meadows packaging and distribution facility.

On February 22, the company announced the sale of its 51 percent ownership stake for $3,536,650. The transaction represents a gain of $1,565,650 that adds immediate non-dilutive cash to its operations and enables it to explore other opportunities in the space. The company’s goal is to develop its own state of the art facility that will focus on the latest extraction and formulation methods through strategic alliances and partnerships.

“I am very pleased with the decision to sell our position in the BPC facility,” said CEO Doug Mason in the press release announcing the deal. “This immediately adds non-dilutive cash to our operations and allows us to explore and execute on other opportunities the company has been researching. As reported earlier, Naturally Splendid has begun preparing a submission to become a Licensed Dealer of cannabis extracts under the Canadian regulatory regime.”

In the meantime, the company announced that it has identified third-party manufacturers  facilities to produce its proprietary, HempOmega™, Hemp Emulsion and Hemp Protein Isolate (provisional patent) products. The company’s intellectual property has already attracted interest from notable food manufactures both domestically as well as internationally, with HempOmega(™) already being commercialized in multiple products. These products help to insulate the company somewhat from while cannabis regulations continue to evolve in Canada.

Focused on Building Its Own Operations

Naturally Splendid is a leader in hemp-derived products with many retail products under the NATERA®, Elevate Me™,CHII™ and Pawsitive FX™ banners and intends to expand that reputation into the emerging cannabidiol (CBD) space with a growing line up of products and services.

In late 2017, the company acquired Prosnack Natural Foods Inc., who are the makers of the Elevate Me™ brand. Prosnack produces energy bars, protein bars, snack bites, balls, oatmeals, etc. Additionally, they develop custom formulations for nationally recognized brands and co-pack/private label for many large retailers in Canada and the U.S. The goal of this acquisition was to have ready products to be fortified with CBD in anticipation of legalization in 2018 in Canada.

The company’s primary focus is currently on its consumer and pet product lines, including its CHII™, NATERA™, Elevate Me™, and PawsitiveFX™ products, with several new exciting line extensions under development. With hemp’s many benefits, these products cover a diverse range of consumer categories, including functional foods, cosmetics, and pet supplements. The products are sold through both ecommerce and traditional retail distribution channels in the United States and around the world.    

The company’s Pitt Meadows production, processing, packaging, and distribution facility fulfills internal packaging needs for its house branded products, as well as capacity for co-packaging opportunities with other businesses. The facility will include extraction and manufacturing multiple CBD fortified products upon receiving their Dealer License. In addition, the facility provides private labeling for major retailers throughout the country, as well as co-packing for global manufacturers, with gross revenue of about C$17.5 million over the past four years.

In recent months, the company has outlined its strategy to become a Licensed Dealer in Canada, where the legalization of CBD nationwide could open the door to a significant market opportunity. Becoming a Licensed Dealer will allow the company to manufacture, distribute, and export hemp and marijuana extracts. The Hemp Business Journal projects that the global market for CBD will reach $2.1 billion by 2020, with $450 million of those sales coming from hemp-based sources. That’s a 700 percent increase in the market, making hemp one of the fastest growing industry subsets.

Looking Ahead

Naturally Splendid Enterprises (TSX-V: NSP) (OTCQB: NSPDF) represents a compelling investment opportunity in the hemp-based CBD space. With the sale of its POS BPC Manufacturing Corp. interest, the company has fresh capital that it can use to deploy into other areas of its business or pursue new strategic acquisitions. Investors may want to keep a close eye on the stock over the coming quarters as it executes on these plans.

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The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please see our disclaimer below and follow the link to view our full disclosure outlining compensation: https://cannabisfn.com/legal-disclaimer/

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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