Emerald Health Therapeutics secures long-term supply of hemp for CBD extraction

Emerald Health Therapeutics Inc (CVE:EMH, OTCQX:EMHTF) announced Wednesday that it had secured a long-term supply of hemp from Emerald Health Hemp Inc for extraction into CBD oil.

The Canadian company is a licensed producer authorized by Health Canada to grow, sell and produce cannabis across the country.

It has signed a deal with Emerald Health Hemp to purchase nearly 500 acres of chaff in 2018, and around 1,000 acres from 2019 to 2022, with an option to renew the deal for two additional years. Emerald Health Hemp is a wholly owned subsidiary of Emerald Health Sciences, which owns approximately 32% of the shares of Emerald Health Therapeutics Inc.

The long-term supply of hemp chaff secured by Emerald Health Therapeutics will be processed with the expertise of Factors R&D Technologies, a division of the Factors Group of Nutritional Companies, with whom Emerald Health Therapeutics.

The stock dipped about 2% to C$4.73 in morning trading in Toronto.

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In this exclusive arrangement, Factors R&D will provide Emerald pharmaceutical-grade, industrial-scale manufacturing capacity as well as expertise in extraction, softgel production, and packaging focused on the rapidly emerging market opportunities for medicinal cannabis in Canada and internationally. This collaboration leverages the Factors Group’s decades of experience in product development, formulation and innovation.

With the legalization of recreational marijuana in Canada on October 17, farmers will be able to sell hemp chaff to licensed processors.

“We see non-smoked, non-psychoactive CBD consumption as a major growth opportunity in both the medical and adult-use market in Canada, and our Factors Group alliance uniquely positions us with the largest biomass extraction and softgel encapsulation facility in Canada to produce value-added products to serve this market,” Chris Wagner, CEO of Emerald Health Therapeutics said in a statement.

“Our intent is to secure significant low-cost cannabinoid supply to serve all our manufacturing and marketing goals and hemp is expected to be our lowest cost source of CBD. We are very pleased with the rapid advancement of our Pure Sunfarms production joint venture with Village Farms and our St. Eustache facility in Quebec. Our collaboration with Emerald Health Hemp now expands our ability to produce CBD products,” he added.

Emerald Health Hemp has established agreements to purchase approximately 500 acres of harvested hemp chaff, plant material consisting mainly of flower and leaf in Manitoba and Prince Edward Island in 2018, with a plan to expand field operations in 2019.

“Canada is one of the largest producers of hemp in the world and with Bill C-45 the value of hemp will continue to grow,” said Prince Edward Island Minister of Agriculture and Fisheries Robert L. Henderson. “I am pleased that farmers in Prince Edward Island are embracing the commercial opportunities that this plant brings to the region with the investment and assistance of businesses like Emerald.” 

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors