Heritage Cannabis Holdings (CANN.C) subsidiary ramps up intake capacity with leading-edge tech

Heritage Cannabis Holdings (CANN.C) subsidiary, Purefarma Solutions, added industrial-scale intake capacity to its hemp oil extraction operations.

Yesterday, Heritage sent the first of its state-of-the-art P1200 biomass isolation and compression units to Purefarma’s Saskatchewan-based hemp farming cooperative partnership.

Purefarma’s hemp cultivation joint venture gives Heritage access to 1,600 acres of hemp in Canada’s flattest province.

According to Heritage, the P1200’s leading-edge proprietary tech was formed after years of testing and trials by Purefarma designers and is intended to remove undesirable plant material, upping the percentage of active pharmaceutical ingredients in the dried hemp feedstock.

“The system will drive both efficiency and quality out of the source material we receive from our hemp suppliers,” said Graeme Staley, CEO of Purefarma.

Heritage commissioned a second P1200 for arrival this summer with the intent to offset the expected grow in hemp supply in Western Canada during late 2019 and 2020.

Hemp revolution in review

Hemp has been a restricted plant in the U.S. since the 1937 Marihuana Tax Act when it was lumped together with cannabis by the Federal Bureau of Narcotics (FBN) and kept there by FBN’s governing descendant, the U.S. Drug Enforcement Administration (DEA) when it was formed 33 years later.

America’s 2018 farm bill, signed by Trump, once again made hemp cultivation legal in the United States.

This ground-breaking legislation granted American farmers their first opportunity to work with hemp since 1942 when Roosevelt gave the plant a temporary reprieve during the country’s Hemp for Victory campaign.

The Chinese connection

Hemp is legally grown worldwide from Australia to Zimbabwe but China takes the title as cannabis superpower.

According to some scientists interviewed by the South China Morning Post, the monster communist state dove into hemp research during the Vietnam War to develop fabrics that could withstand Vietnam’s humid climate.

Chinese researchers also took time to dabble in the study of hemp’s medicinal qualities in field hospitals.

As such, China now holds more than half of the world’s 600-plus patents related to hemp, leaving Western pharma and farmers well behind.

North America’s plight

Despite the popular idea that hemp is a hearty plant capable of growing anywhere, it requires the same equipment, planning and pest management as crops like wheat and barley.

Unfortunately, Hemp’s 80 or so years of restrictions prevented researchers from creating genomes, expanding growth studies and crop management methodologies.

Furthermore, the duality of American cannabis legislation from state to federal also undermined research due to a decided lack of public funding and most private funding comes with an NDA clause.

Even though Canada’s first license to grow industrial hemp was issued in May 1998, farmers are at a loss when it comes to cultivating CBD-intensive strains destined for health and wellness products because their experience lies in growing industrial hemp for textiles, plastics and rope.

It’s no wonder that America imported $67.3 million worth of hemp seed and fiber products in 2017. If the U.S. intends to take part in hemp, however, those numbers will have to change.

It’s not that we can’t grow it well or grow it in quantity, but farming is a painful art–just ask any farmer who spends half their growing season fighting weather, infestation and mechanical breakdowns to see a 40% yield.

Canada’s hemp advantage and growing challenges

Even in the face of this, countries like Canada remain ahead of the American cannabis curve.

However Canada’s hemp fields remain relatively small compared to standard crops, with less than 140,000 acres seeded last year.

Oversupply pressures are expected to shrink Canada’s hemp crop even smaller this year.

As such, Committee members of the Canadian Hemp Trade Alliance (CHTA) have suggested a tax be put in place to fund both the promotion of and research into hemp.

Industry players, like Canopy Growth (WEED.T), are behind the plan as a stimulant to bring Canadian R&D and production in line with advanced competitors like China.

Fortunately both federal and provincial governments in Canada continue to launch educational campaigns for farmers wishing to get in on hemp’s potential as a viable cash crop.

If Purefarma is able to work in conjunction with its hemp farming collective in Saskatchewan to develop successful modern-day growth, harvest and processing methodologies, it may be able to keep its extraction business pumping to capacity and place itself as a global hemp force to be reckoned with.

Heritage was in the news recently when Purefarma secured standard processing and medical sales licenses from Health Canada.

Shares slid $0.045 or 8.33% on high volume to CAD$0.495 by end of trading today.

Currently Heritage Cannabis Holdings has 408,915,484 issued and outstanding shares with a market cap of $202.4 million.

 

–Gaalen Engen

Full disclosure: Heritage Cannabis Holdings is an Equity.Guru marketing client.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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