The US Farm Bill of 2018 has been a complete gamechanger for the entire North American agricultural sector, but none so dramatic as in the CBD hemp space. With it, and by removing low-THC cannabis from regulation under the Controlled Substances Act, the industry is set to explode with dozens of companies vying for billions in future capital that will be pouring into sectors such as medical marijuana, health & wellness, food & agriculture, as well a myriad of industrial applications. There is no doubt about it – the future of hemp is now. And while investors are banking on big money to continue to make the cannabis industry the ‘next big thing’ in the coming years, the CBD hemp sub-sector is projected to grow exponentially, with market value estimates of up to US$20 billion by 2024. With eye-popping numbers like that, both retail and institutional investors will be in search of many undervalued opportunities in the sector. One such company could be Global Hemp Group Inc. (GHG) (CSE: C.GHG, OTC: GBHPF, FRANKFURT: GHG, Forum). Founded in 2014, the Company has already established a strong footprint in the CBD and industrial hemp markets in both the U.S. and Canada (it currently holds cultivation licenses in Scio, Oregon and Northeast New Brunswick.
Investors take note – GHG is “on the verge of generating significant revenues” in a nascent industry.
Global Hemp Group has already developed a sophisticated agricultural hemp cultivation operation for the extraction of cannabinoids (CBD/CBG/CBN/CBC), all designed to create a near-term revenue stream. Included in this first phase is expansion of acreage under cultivation, working with farmers in the region to expand production, and expansion of the business model by seeking opportunities in three main areas:
- cannabinoid extraction
- product development and distribution
- micropropagation for cloning hemp plantlets (tissue culture)
As part of their cloning project, earlier in January 2019, GHG announced it will cultivate three hemp strains that will offer higher CBD content, substantial biomass yield, and ultra-low THC levels, along with superior pest resistance and disease tolerance. According to the Company, these strains also have a shorter flowering period, allowing for an earlier harvest before the usual fall rainy season begins in the Pacific Northwest region.
GHG currently farms out its biomass processing to a local extractor. The Company is discussing ways to expand its business relationship with the extraction company. They are also collaborating with Oregon-based Phylos Bioscience that is mapping the genome of hemp and cannabis strains in an effort to identify the relationship between the thousands of varieties that exist today and provide information to breed new cultivars that provide higher yielding cannabinoid levels and other unique characteristics. Part of the mapping process is weeding out the male plants. In the world of cannabis science, females’ rule, which when you think about is not a bad thing. Phylos’ micropropogation (tissue culture) operation ensures that all plants produced will be 100% female with more uniformity.
Global Hemp Group’s second phase will focus on the development of value-added industrial products utilizing the processing of the whole hemp plant, as envisioned in the GHG’s Hemp Agro-Industrial Zone (HAIZ) strategy. This is GHG’s real long-term growth strategy and is what really sets them apart from the competition – the Company’s strategic focus on the wide variety of agricultural and industrial benefits of hemp.
And ‘variety’ is the key word, as the practical and universal applications for hemp are virtually limitless. Aside from cultivation for CBD content (e.g. medical marijuana), hemp is grown for its fiber and seeds. And few crops are as a versatile, economical, and efficient. On an annual basis, one acre of hemp will produce as much paper as two to four acres of trees. From tissue paper to cardboard, all types of paper products can be produced from hemp.
The quality of hemp paper is superior to tree-based paper. Hemp paper will last hundreds of years without degrading, can be recycled many more times than tree-based paper, and requires fewer toxic chemicals in the manufacturing process than does tree-based paper.
Hemp can be used to produce fiberboard that is stronger and lighter than wood. Substituting hemp fiberboard for timber would further reduce the need to cut down our forests.
Hemp can also be utilized to produce strong, durable, and environmentally friendly plastic substitutes. Thousands of products made from petroleum-based plastics can be produced from hemp-based composites.
It takes years for trees to grow until they can be harvested for paper or wood, but hemp is ready for harvesting only 90 to 120 days after it is planted. Hemp can grow on most land suitable for farming, while forests and tree farms require large tracts of land available in few locations. Harvesting hemp rather than trees would also eliminate erosion due to logging, thereby reducing topsoil loss and water pollution caused by soil runoff.
How about hemp flying drones? Indeed. Stay tuned. We will discuss these and other cutting-edge, space-age applications in Part 2
In the News
2019 has been a busy and bountiful year for Global Hemp Corp.
On June 14, Global Hemp announced that it had commenced planting at its hemp farm in Scio, Oregon with the expectation of planting 40,000 to 50,000 plantlets in 2019, with a CBD content ranging from 12 percent to 15 percent.
On May 17, Global Hemp announced that its subsidiary, Covered Bridge Acres Ltd. (CBA), has entered into a contract with Richardson Gap Farm LLC (RGF) to extract cannabinoids from the hemp biomass produced at the Company’s Scio Oregon hemp farm. Working with a local extractor only five miles away reduces transport costs and the associated carbon footprint and enables CBA management to easily oversee the extraction process. RGF will process the biomass into CBD distillate. Based on the results from a recent test run by RGF, CBA’s share of the distillate produced is expected to be 400 to 500 kilograms. CBA is currently selling distillate produced from earlier test extraction runs for US$4,000 to US $5,000 per kilogram.
Earlier in March, GHG announced an update on their plant cloning program along with acquiring hemp biomass produced on the Scio farm from the 2018 harvest. The Scio farm prepared processing samples ranging in size from 100 to 2,000 pounds for various extraction companies. The Company said the biomass processed into CBD crude oil, with the option to refine further into distillate or full spectrum oil, will “increase its value on the market.” This is an important point that investors should take note of.
From the CEO
In conversation Stockhouse Editorial, Global Hemp Group’s President, CEO and Chairman of the Board, Charles Larsen, talked about his strong advocacy for hemp as a means to revolutionize practically every industry from medicine to food, housing, automotive, and yes, even drones.
When asked what makes his Company’s business model attractive and unique to investors, here’s what the CEO had to say:
“What really sets us apart is our experience. We already have three years of cultivation under our belt. We’ve made a lot of connections that we’ve developed into partnerships and others that will develop into partnerships and alliances – things like tissue culture.”
He went on to say that to maximize profit the goal is to use 100 percent of the plant by using the fiber from the stalk, which can be used for everything from composite for the aforementioned drones to biocomposite manufacturing lines (e.g. hempcrete, bioplastic, fiber mats, insulation, etc.).
As for his team and the overall outlook:
“We’ve got some very good people on board and the knowledge base is growing on a daily basis. We’re very excited about the future of the Company.”
Global Hemp Group is playing the long game. The Company’s experienced management team, value-added acquisitions and well-planned, multi-phased strategy are tightly geared towards the future development of this incredible agricultural, medical, and industrial product. This, coupled with a scientifically-focused team involved in some the CBD industry’s most cutting-edge cloning R&D, offers an intriguing investment opportunity.
For investors, hemp is the real deal. And as an undervalued asset Global Hemp Group also looks like a real deal.
In Part 2 of this multi-part series, Stockhouse takes an in-depth look at the future of CBD and industrial hemp and what Global Hemp Group is doing to position itself as a truly global leader in a soon-to-be multi-billion-dollar industry.
Credits: DAVE JACKSON | Stockhouse