Hemp Extraction Turning out to be a Huge Growth Opportunity for Cannabis Companies
October 8, 2019
It may be the hottest portion of the hottest market in 2019. But such a demand also creates questions about is there enough supply to meet that demand of basic resources especially the extractors; the ones who extract the CBD from its various sources. Some observers even predict that there won't be enough supply to meet the demand for cannabis in oil form. But as one article said: "business is booming for cannabis extraction companies, despite the supply shortages." Some of the bigger well known cannabis companies have built or are building their own extraction facilities to complement their growth operations, but experts say that that infrastructure won't fill the future demand for cannabis oil products. Active Healthcare companies in the markets this week include: Sugarmade, Inc. (OTCQB:SGMD), Hemp Inc. (OTCPK: HEMP), Puration, Inc. (OTCPK: PURA), Terra Tech Corp. (OTCQX: TRTC), Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF.TO).
Some writers believe that as the cannabis industry evolves, it will become fragmented, with various companies specializing in separate parts of the vertical market… just like other verticals in other industry markets. They predict that companies focusing solely on cannabis extraction will end up being an increasingly important subsection of the overall industry.
Sugarmade, Inc. (OTCQB:SGMD) BREAKING NEWS: Sugarmade, a leading provider of hydroponic and other supplies to the agricultural and hemp sectors, today announces a new business initiative, which is expected the expand the Company' revenue base. Over the coming weeks, the Company will be entering the market for hemp extraction equipment and technologies, including several Chinese proprietary technologies, which hold the promise of increasing extraction efficiencies.
"Our staff has done extensive research into the fast growing hemp industry. We continue to see an imbalance between cultivation outputs and extraction capacities within the industry. This leads us to believe the market for extraction services and the equipment required by these extraction companies will continue to accelerate. We plan to not only market several domestic technologies, but also next generation technologies we plan to important from Southern China, were hemp cultivation and herbal extraction technologies are well ahead of North America," commented Jimmy Chan, CEO of Sugarmade.
According to the U.S. Department of Agriculture, farm production within the United States is expected to fall an additional 6.7% this year on top of already weak market over the past few years. These reductions will likely result in the overall U.S. agricultural production for 2019 being the lowest sice 2006. Prices for the commodities that are being produced are also at near record levels. One of the few bright spots in the agricultural sector is industrial hemp, which became legal via the December passage of the U.S. Farm bill. Estimates for hemp production for the 2019 season continue to be revised upward, with major hemp producing states, such as Colorado, Kentucky, Oregon, North Dakota, and others, reporting sharp increases in both cultivation applications and expected acreages. Arcview Market Research, is now predicting the market for Cannabidiol (CBD), which is mainly derived from hemp, will surpass $20 billion by year 2020. Hemp and its by products are growing fast and are one of the few bright spots in the agricultural sector.
Mr. Chan continued, "It is clear the 2019 and 2020 hemp cultivation seasons will be massive. We expect the power balance between cultivators and extractors to continue to heavily favor extractors and we are seeing that part of the industry expand massively to be able to handle the significant amounts of hemp biomass that will be harvested and will ultimately be processed. We are planning to launch an effort to distribute not only legacy extraction equipment to extraction companies, but we also plan to begin distribution of next generation extraction technologies developed in the Chinese providence of Yunnan where the hemp industry has existed for more than a thousand years." Read this and more news for Sugarmade at: https://www.financialnewsmedia.com/news-sgmd/
Other recent developments in the healthcare, biotech industries:
Hemp Inc. (OTCPK: HEMP) a global leader in the industrial hemp industry with bi-coastal processing centers including the 85,000 square-foot multipurpose industrial hemp processing facility in Spring Hope, North Carolina, a state of the art processing center in Medford, Oregon, and a 500-acre hemp growing Eco-Village in Golden Valley, Arizona, recently announced that Florida Agriculture Department officials are working to move forward with the rule development process for the state's hemp program.
Currently, the hemp program that was passed by the legislature in the spring is awaiting Governor Ron DeSantis'ssignature and would become law on July 1, 2019. In a hemp update video by the Florida Agriculture Department, the Florida Cannabis Director Holly Bell describes why hemp would be beneficial to the state and the steps the department is taking to fill the request for a new crop by state farmers.
Puration, Inc. (OTCPK: PURA) recently announced signing a new East Coast Distributor for its EVERx CBD Sports Water. The distributor is headquartered in New York. PURA currently has over $1 million in annualized revenue primarily from the sales of its EVERx CBD Sports Water. Sales of EVERx today come primarily from the South and South West United States. PURA has announced a 2019 $4 million revenue target. The distribution agreement announced today is PURA's first major distribution agreement for the East Coast and it is anticipated to have EVERx on shelves from Florida to Maine. In conjunction with the agreement announced today, PURA plans to soon announce in store EVERx events at retailers on the East Coast taking place over this coming summer
The company demonstrated over a $1 million base annual revenue run rate in Q1 2019. The company broke $1 million in sales for the 2018 fiscal year. The company also has a new $1.5 million order to produce private labeled CBD water.
Terra Tech Corp. (OTCQX: TRTC) a vertically integrated cannabis-focused agriculture company, recently announced that it has launched a legal cannabis delivery service, operating from its state licensed Blüm dispensary in Santa Ana, CA, as of Tuesday, May 14, 2019.
Through its Blüm Santa Ana dispensary, Terra Tech is now a major supplier of medical and adult-use cannabis to Santa Ana and the surrounding cities, such as Irvine, Laguna Beach and Newport Beach. All of the aforementioned cities suffer from a scarcity of existing cannabis dispensaries. Launching a premier delivery service enables the Company to expand distribution of its best-in-class cannabis products to reach an even greater number of patients and customers. The delivery service is fully licensed and compliant with all state regulations.
Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF.TO) recently announced that Governor Greg Abbott has signed into law Texas House Bill 1325 (the "Texas Hemp Legislation"), which effectively legalizes the cultivation of hemp and processing of hemp and hemp-derived products, including cannabidiol (CBD) in the State.
As previously announced, in anticipation of the passage of the hemp legislation in Texas, Village Farms has begun conversion of half of its 1.3 million square foot, ultra-high-tech Permian Basin greenhouse (which utilizes the Company's proprietary GATES® technology) for cultivation of high-CBD hemp and CBD extraction. The Texas Hemp Legislation will require licenses for both the cultivation and processing of hemp and Village Farms plans to apply for the requisite licenses as soon as it is permitted to do so. No time frame has yet been provided by the State of Texas for the licensing process.
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