Hempco Food and Fiber Inc (CVE:HEMP) CEO on Capturing 2 Billion Dollar Hemp Food Market

Hempco Food and Fiber Inc (CVE:HEMP) (OTCMKTS:HMPPF) (FRA:22Y) CEO Diane Jang discusses the company’s range of available hemp-based consumer products and the future applications of hemp CBD.  As of October 17, the Cannabis Act will allow companies to extract and commercialize non-narcotic CBD’s from hemp flowers, leaves and chaff, which were previously all discarded. Aurora Cannabis Inc (TSE:ACB) (OTCMKTS:ACBFF) (FRA:21P) have a 52.5 percent share majority ownership in the company and Hempco will act as their mainstream food play. Hempco plan to capture market share of the growing, Infinium Global Research predicted 2.2 US billion dollar, hemp-based food industry.

Transcript:

James West:     Welcome back to Midas Letter Live. It’s Friday. And my guest right now is Diane Jane. She’s the CEO of Hempco Food and Fibre Inc trading on the TSX-V under the symbol H E M P. Diane welcome to the show.

Diane Jane:     Thank you James.

James West:     So Diana you brought product, so obviously you make food out of hemp, among other things I’m assuming. Give me an overview what does Hempco do?

Diane Jane:     Well we’re a processor, marketer of hemp based foods, hemp nutraceuticals, and hemp fiber for the global market. And these are some of our new lines that we’ve come out with and I hope you can try a sample.

James West:     This is savory onion?

Diane Jane:     Savory onion with hemp hearts and super seed. It’s a superfood!

James West:     Oh I see, so you just eat it out of…

Diane Jane:     You can eat it as a snack, you can sprinkle on your avocado and toast. Its versatile, you can pretty much use it on anything. What do you think?

James West:     Well, you know I already love hemp seeds. I eat organic hemp seeds almost every winter.

Diane Jane:     Well you should be on the lookout for our products because we do have an organic one as well.

James West:     Very cool.

Diane Jane:     And we’re just launching it, it’s one of our strategic initiatives.

James West:     OK. I could eat a whole bag of that no problem. That’s going to be problematic. Please keep it away.

Diane Jane:     OK. So that’s our hemp-based food line. And then we also have a Praise brand. Animal line of hemp supplements.

James West:     Oh for animals?

Diane Jane:     Right, so we’re expanding that as well. We’re doing an expansion of our bulk sales wholesale globally. We’re also going to become a supplier.

James West:     [eating products]

Diane Jane:     Oh you’re liking it, that’s good! And then we’re becoming a supplier of fiber and with the latest news, with this cannabis act exemption that just came out August 10^th, we’re going to be collecting the leaves, the flowers, and the buds to start collecting and storing it for October 17 and then we’re going to commercialize it and you’re going to have CBD extracts. Hemp CBD extract.

James West:     Oh great. I’ve found that CBD extracts are very therapeutic. Just on a day to day basis I’ve been experimenting with myself as guinea pig. I’ve been doing 33mg of pure CBD. And the days that I do that are very interesting days. You’re not supposed to get a psychotropic effect. I don’t really get high but I certainly feel energized. I have a real sort of baseline, sort of thrum going, it’s like bring it on! I’m ready for everything!

Diane Jane:     Are you on it right now?

James West:     [laughter] No I’m not on anything right now. Its 11 o’clock in the morning!

Diane Jane:     [laughter] It’s CBD though.

James West:     That’s true. But actually it does have a very physiological effect. The first time I did it, I’m like I feel like I’m tingling, sparkling, and glowing all at once, and it wasn’t a mental effect, it was a physical effect, but it had the mental effect of giving me a real clarity of thought and real purposeful thinking, as opposed to my mind’s normally being all over the place. So I love it. So now, these foods are available now in grocery stores?

Diane Jane:     Well we’re just launching it, so we’re expanding our distribution network in Canada. In North America, actually globally. But we’re just launching in Canada right now into retail specialty natural foods, retail, grocery, drug…

James West:     Okay that’s great. Now this is a company that’s majority owned by Aurora?

Diane Jane:     Yes. As of May 15^th: 52.5 percent share majority shareholder. So they provides a large stable partner…

James West:     Lots of money if you need it.

Diane Jane:     [laughter] Exactly.

James West:     Well that’s great. So this is amazing. So this is basically Aurora’s mainstream food play?

Diane Jane:     Correct. Exactly. It broadens our portfolio. It’s value added products.

James West:     So, does this have a percentage of CBD in it? just by the nature of it being hemp?

Diane Jane:     No. Well, it has trace amounts.

James West:     So, they have these added benefits, the health benefit, the dietary benefit of eating hemp seeds. I happen to know is the abundance of omega 3 fatty acids and the protein source.

Diane Jane:     Right, plant-based protein and 11 essential nutrients in just one serving of hemp hearts. So it’s a superfood!

James West:     That’s why I’m feeling so super lately. I put it on my porridge in the winter, I don’t eat porridge in the summer for some reason, I don’t know why it’s just a thing.

Diane Jane:     But there’s so many different uses, I sprinkle it on Brussels sprouts. There’s recipe ideas, salads…

James West:     I can imagine this sprinkled on pretty much anything and then quickly baked onto like cauliflower. You name it. I’m just picturing because the flavour is so rich, and with the seasonings that you guys put in there it’s very nice.

Diane Jane:     Glad you like it.

James West:     No I really do. So I guess you must have a large strategy for getting the stuff on the shelves in grocery stores?

Diane Jane:     Right, we’re building that distribution right now and we’re a network in terms of grocery retail natural foods, especially the health and wellness market. It’s a continuously growing market. So, we’re well positioned, well diversified. We’ve gotten so far very good responses and acceptance of the product line and excitement behind it.

James West:     Great. Does Hempco grow hemp?

Diane Jane:     We work with a group of farmers and we’re working with them right now, because its harvest season right now. So this is the time frame where they’re starting to collect and harvest the seed and collect the chaff and the flowers, leaves, as we speak.

James West:     Okay. So is this hemp grown outdoors in Canada?

Diane Jane:     Yes. This is an agriculture product. So, the difference between hemp and the marijuana cannabis plant is that this is agriculture product grown out in the fields. It grows to about 5 to 6 feet high. And you can get basically a whole plant utilization. So now with new regulations coming in, with the cannabis act, we can use all parts of the plant. Previously part of it was thrown to waste. But now there’s CBD extracts, hemp CBD extracts from these leaves that were thrown out before but now, as of October 17^th, we can commercialize it, we can extract it, and it can be used as a raw material.

James West:     Interesting! So, CBD extracts are, I mean they’re hugely valuable.

Diane Jane:     Yes medicinal. It’s got great nutraceutical medicinal benefits and then we also use the stalk for the fibre. So we’re expanding our plant 56,000 square foot plant and in this Q its going to have food production and then a fiber side on the other side. So using the stalk and then the food. So our vision of whole plant utilization is finally coming to fruition.

James West:     Awesome. I’ve been dying to see, you know like you can’t help but still use paper in this day and age miraculously enough. Is hemp paper going to be a thing again?

Diane Jane:     I believe so. There is hemp paper available.

James West:     It’s usually way more expensive than normal paper. Isn’t it?

Diane Jane:     It’s more expensive, but hopefully when there’s more demand they’ll be more production.

James West:     I would think that the price would come down with more growers. Is it conceivable that hemp production, which is obviously much cheap than THC premium bud production. Is it conceivable that the outdoor hemp growing facilities are going to replace those higher cost THC production facilities as the primary source of CBD, because it’s going to be so much cheaper to access?

Diane Jane:     Well it is a cheaper raw material. There’s going to be a big demand for CBD in general I think. And CBD from hemp is different from CBD from the cannabis plant.

James West:     A different group of CBD’s. Oh interesting, I was listening to a doctor give a presentation at the MJ Business conference here yesterday and he has actually done clinical studies to determine which micro CBD’s effect which varying types of cancers, which you know it’s preliminary, so I was cautioned not to be projecting the message that don’t do chemo, you can just do CBS’s and you’ll be fine because that might not be the case. And there were some examples of patients who had abandoned conventional treatment in favour of purely CBD’s, based on anecdotal evidence and had subsequently died prematurely. But who can say when prematurely actually is?

So you’ve got 60 million shares out, 85 billion dollar market cap. Revenue Q3 more than doubled from Q3 2017. What’s your anticipated timeline to profitability?

Diane Jane:     Well our strategy is working so far, there’s early signs of success. So as we continue it’s going to strengthen and building revenues. Our focus right now is building revenue streams. Our margins have improved because of our value-added products as we grow and expand.

James West:     Right. And obviously the market for hemp-based products is only going to grow from here because the laws are easing up and they have finally stop categorizing this as a chemical substance with no medical use.

Diane Jane:     Exactly. So it’s a food right? It’s a superfood. So Infinium Global Research study that just came out said they forecasted by 2024 to be U.S. 2.2 billion dollars in hemp-based foods. So that’s an accumulative growth of 330 percent over 2018. So that’s huge and we hope to capture a big market share of that.

James West:     Fantastic. Well you know I love this. I loved the idea that you with Aurora as the majority shareholder, they’re obviously committed to ensuring your success financially, so that’s a relief. Access to capital is clearly not going to be an issue in the near term.

Diane Jane:     They have been very supportive in terms of corporate development and in terms of their expertise. And so there’s a lot of synergies there.

James West:     Sure. Are there a lot of people trying to capture the hemp opportunity in Canada at this point?

Diane Jane:     There’s a few players out there, but who’s going to be the first? and who’s going to be the most innovative? and who’s going to have that capital behind it? So, we hope to be that, a global player.

James West:     Yeah. Cool. All right well that’s a great introduction. I’m amazed at this company. I’m actually going to buy ten thousand shares right now because I think it’s a buy. So I am now a shareholder as of right now… Filled. I am a shareholder.

Diane Jane:     Great thanks James, thank you very much.

James West:     That’s awesome. I love doing that.

Diane Jane:     Enjoy. Thank you.

James West:     We’ll come back to you soon. I’m glad to see you doing so well Diane.

Diane Jane:     Thanks James.

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Original article: Hempco Food and Fiber Inc (CVE:HEMP) CEO on Capturing 2 Billion Dollar Hemp Food Market

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