The merger combines both US and Canadian assets into one of the first fully integrated CBD companies, producing one of the largest hemp cultivation and CBD extraction operations in North America.
Thanks to their deal with Tilray, both companies are well positioned within the American and Canadian CBD markets.
“We are pleased to have a strong partner such as Tilray in this emerging market. With the legal barriers lifting, we believe the market for hemp CBD could exceed all forecasts because of the huge shift to self-directed care and wellness among consumers,” said David Rendimonti, president and CEO of Livewell Canada.
Livewell signed a binding term sheet to supply Tilray with 150 kilograms of hemp-derived CBD isolate from February 2019 to July of 2019. Once completed, Tilray will have the option to increase the amount of CBD supply to 500 kilograms a month, with a 12-month renewable option.
The letter of intent imposed quality standards on the CBD given to Tilray, including good production practice. Prior to distribution, Tilray indicated they would ensure that all of their products adhered to all applicable laws as well as its own internal quality standards.
Canada’s regulatory market is considerably different from that of the US. The regulatory climate allows for the use of hemp as a source of CBD, barring that the product meets quality requirements. These new rules open up options for Tilray’s Canadian subsidiaries, Tilray Canada and High Park Farms, to become major players in the emerging hemp-derived CBD markets in Canada and the US.
- 20,000 acres of CBD hemp harvested in 2018.
- Two extraction facilities
- 3,000 kg/day CBD isolate by the second half of 2019.
- Footprint in Canada and the United States.
- Personalized diagnostics and patented therapeutics R&D capabilities.
- 36,000-square-foot nutraceuticals development and manufacturing facility.
- Researchers and scientists specializing in CBD and other cannabinoids.
- 540,000-square-foot greenhouse facility on 100 acres of land.
The deal follows the signing of the Farm Bill, which passed Congress on Dec. 12, providing the framework for the legalization of industrial hemp and removing it from the Controlled Substances Act. This opened up all kinds of avenues for business to capitalize on the production of CBD. The bill has yet to be signed into law by President Trump, but he has signaled his support.
“This is confirmation of our transformation to a global CBD life sciences company. That this is occurring during this historic time in the United States, our most significant market, is not an accident. It is validation of a shared vision and strategy to bring alternative health and wellness products to consumers that deliver functional outcomes. We believe the hemp CBD market will be explosive,” said Rendimonti.
While individual states can still weigh in with restrictions on the sale of hemp and its products, the bill allows for interstate commerce. Once hemp has been removed from the CSA, the DEA can no longer get in the way of businesses trying to make a buck from hemp. This should eliminate barriers for other businesses, like banks, credit card companies and e-commerce trying to get involved.
Six other benefits of CBD include:
- Pain relief. One of the most celebrated health benefits of CBD oil is its analgesic (pain relieving) effects.
- Anti-Seizure Properties. Seizures occur when there’s a dramatic fluctuation of electrical activity in the brain.
- Combat Anxiety.
- Fight Cancer.
- Reduce the Risk of Diabetes.
- Treat Sleep Issues with Cannabis.
Vitality shareholder groups with more than 60 percent of common shares and LiveWell shareholders with 29 percent have agreed to exercise their rights in support of the merger. This agreement will continue until either the merger closes, or six months have passed. The merger is expected to go through in March 2019.
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