Hemptown Poised to Profit Following Passage of US Farm Bill
August 8th, 2019
Exclusive, News, Top Story
Hemptown Poised to Profit Following Passage of US Farm Bill
Prior to the 2018 US Farm Bill, hemp – defined by the legislation as the cannabis plant containing less than 0.3% THC – carried the same legal classification as THC-rich cannabis, and aside from a handful of pilot projects, the mass production of industrial hemp was therefore illegal. The US was actually the last industrialized state with a ban on industrial hemp, placing US-based companies reliant on hemp at a distinct disadvantage.
However, the legislation did nothing to change the legal classification of non-THC cannabinoids produced by the hemp plant, at a time when demand for these cannabinoids, especially CBD, has skyrocketed. Meaning that while producers are free to grow hemp, the production of cannabinoids must still be done in the states where their production and sale have been legalized.
The CBD market has seen much faster growth than any other aspect of the cannabis industry. In 2015, the market spiked in the hundreds of millions, nearly doubled in 2016, and was predicted by all industry analysts to become a multi-billion-dollar industry by 2020. US demand jumped following the passage of the Farm Bill, and the most recent report by BDS Analytics shows those initial estimates were far too low, and that the US CBD market alone is expected to surge from a $1.9 billion market in 2018 to $20 billion by 2024.
What was once a sub-category of the larger cannabis industry has evolved into a category of its own, buoyed by public awareness of CBD-rich products. Companies are developing all manner of health & wellness products to capitalize on this exploding interest.
This also means that what was once available in dispensaries will soon be sold mainly by the major retailers. The hemp-derived CBD market is forecast to be especially lucrative, and a 2017 report by Brightfield Group predicted a per annum increase of 55% over the next five years alone.
Enter Hemptown USA
One company that led the charge for reform, and now stands to benefit as a result, is Oregon’s Hemptown USA, a multi-state operator with farms and processing facilities in the so-called Emerald Triangle of their home state as well as Colorado and Kentucky, with plans to expand into California.
Hemptown USA CEO, John Cummings, expects the passage of the Farm Bill to enable a revitalization of the country’s farming economies, while the drying and processing facilities associated with the hemp industry will provide employment and revenue to rural communities.
Growing on 1500 acres across three states, Hemptown USA realized a first-year yield for 2018 of 110,000 pounds of feminized hemp biomass, with a projected average gross margin of 70%. The company plans to double its acreage in 2020, and is already predicting a 2019 yield of three million pounds. Its relationship with it’s genetics provider, enables the company to cultivate hemp with an exceptionally-high cannabinoid content – up to 20%. Over 500 acres is currently focused on rare genetics, and Hemptown expects to control 40% of the total North American supply in 2019 Q4.
The Mother of All Cannabinoids
While Hemptown certainly aims to be a leader in the CBD space, its focus on lesser-known cannabinoids like CBG, the precursor of both THC and CBD, is what truly sets it apart.
Like CBD, Cannabigerol (CBG) is a non-intoxicating cannabinoid, but unlike CBD, it occurs in very low levels (usually less than 1%) in most cannabis strains, making it rare and, due to its great potential for medical breakthroughs, much more valuable. On average, CBD currently demands $6-8,000 a kilogram, while CBG is upwards of $25,000 per kilo.
Early research has found CBG to be an effective anti-inflammatory, as well as an effective neuro-protector, offering hope for those afflicted with neurodegenerative diseases such as Parkinsons and Huntington’s, and a powerful antibacterial agent, especially against drug-resistant microbes like the Staphylococcus aureus superbug. CBG has proven an effective tool for treating eczema, psoriasis, and related skin conditions, and a recent study even found CBG inhibited the growth of colorectal cancer cells in mice. And because the research is really in its infancy, we’ve only begun scratching the surface.
Hemptown is positioning itself to be one of North America’s leading producers of CBG. Working with Oregon Seeds to develop strains high in CBG, the company expects up to 70% of its 2020 crop to come from these novel strains.
True Vertical Integration
But Hemptown is more than just a cultivator. It is a vertically-integrated company which aside from its contract and bulk wholesale supply agreements for dried hemp flower, is developing and producing its own range of in-house brands, as well as the manufacture of white-label products. It’s also investing in R&D designed to solve the problem of water solubility to increase the efficacy of cannabinoid-derivative health & wellness products.
The company recently announced the acquisition of Lake Oswego, Oregon-based Kirkman Group and its fully operational 25,000 sq. ft. FDA-licensed and cGMP-certified nutraceutical manufacturing facility, including its state-of-the-art formulations and equipment to facilitate precision dosage CBD & CBG liquid-fill tinctures, gel caps, edibles, creams, and topicals. The acquisition also fast-tracks Hemptown’s move into the consumer packaged goods market for retail and wholesale.
It also allows Hemptown to leverage Kirkman’s proprietary Ultra Tested protocols to examine every raw ingredient used in its products, enabling the detection of over 950 environmental contaminants, while finished products are tested for 24 heavy metals as well as molds, bacteria, and common allergens.
No other supplement company in the world offers this degree of purity testing, and as a result, Hemptown will be one of the first companies to offer liability insurance on all packaged goods produced at the facility.
Investors looking to benefit from the Farm Bill as well as the red-hot CBD and emerging CBG markets should take a serious look at Hemptown USA.
For more information, keep watching this page, and visit https://hemptownusa.com/
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