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Aurora to boost CBD supply chain with Hempco acquisition


Image Source: Potstocknews

Aurora Cannabis will acquire the remaining interest in Hempco Food and Fiber, which would allow the Canadian firm to increase its production. The former announced on April 16 that it will pay C$63.4 million (1 Canadian dollar = 0.75$ U.S.) for the 48% interest of Hempco that it currently does not own valued at C$1.04 per share.

Hempco basically produces hemp derived edibles and consumer products. Quite essentially for Aurora, it will provide the company with a solid economical access to high volumes of hemp from which CBD can be derived. The Nisku facility in Alberta of Hempco will produce up to 6.4 million pounds when its doors open.

The CEO of Aurora, Terry Booth says that the new acquiring of Hempco would allow them to integrate it and its new Nisku processing facility in their global hemp operation which would possibly help them get higher traction and allow them to produce more products.

“Our goal is to strengthen our CBD-from-hemp supply chain as well as our hemp business of hemp-based superfoods, nutraceuticals and fibers.”

Aurora is an eminent company in the hemp space, as it acquires Hempco, it adds another significant hemp assets to its collection. Currently, it owns Agropro, Europe’s largest producer of hemp and ICC in South America which is also a significant hemp producer. The addition of Hempco would improve Aurora’s diversification from its core medical and recreational cannabis business.

Companies started actively collaborating and creating new products as soon as the Agriculture Improvement Act of 2018 removed hemp from the list of Controlled Substances Act in the U.S. While many states in U.S. have allowed hemp derived CBD products based on the changing federal law, others still hold back with their decision and oppose the legal CBD usage.

Despite of federal government allowing CBD products, the U.S. Food and Drug Administration prohibits the use of CBD in any food and drinks, it allows CBD only in a drug which is used to treat two rare forms of epilepsy in children.

The contrasting policies by the agency and the government has led to confusions in the business space as well as the consumer market. People are not really sure if they would be allowed to go freely or arrested and charged for possession of illegal substance while they carry the newly legalized hemp derived CBD.

Despite the stringent regulations by the FDA, companies and retailers have started selling CBD infused edibles to consumers. They typically risk at being arrested and the products seized by the Health Department officials, however the FDA has not taken any such actions yet.

The agency announced that it will hold a public hearing on May 31, where it will decide a regulatory framework for the newly introduced drug for the benefit of the people and ensure its safe consumption.

CBD or cannabidiol is derived from hemp plant, a cannabis genus plant which is an anti-inflammatory component. The non-psychoactive substance promises potential health benefits such as improving sleep patterns, relieving stress, anxiety, depression, pain, swelling and even treating severe diseases like Alzheimer’s.

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Though these claims are not backed up by formal international study or research, people explain their real-life experience where CBD actually helped them improve their health.The Federal law allows hemp derived CBD which contains a maximum of 0.3% of tetrahydro cannabidiol (THC), a psychoactive compound found in the hemp which can trigger seizures, cause damage to mental health and is quite harmful for regular usage or consumption.

CBD products with high concentrations of THC, more than the decided 0.3%, will be considered illegal. Consumers need to be more aware and educate themselves about how to buy reliable CBD products and follow a safe consumption method.

Aurora says that it will enter the U.S. market only after the air of confusion is cleared off from CBD products and there is a legal framework and regulatory policies in place for the distribution and selling of CBD or its products.

“We’ll enter when it’s proper to enter, and when it’s legal to enter into the United States market,” Booth said during a call with analysts in February.

Ivan writes about Cannabis at The Cannabis Radar. He has a degree in Nutrition Sciences from University of Oklahoma Health Sciences Centre. He likes to spend his spare time reading to his daughter or spending time with his wife.

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