- Under the Company’s various joint venture farming agreements in the USA and Australia, the farmers contribute their farmland, farming expertise, machinery and labour and the Company contributes its various strains of CBD seeds, the required licenses and permits and specific CBD hemp growing, extraction and production expertise and its experience and international connections in final CBD product sales and marketing. The farmer and the Company are then reimbursed pro rata for the costs of their respective inputs on a pre-agreed basis when the various products (seeds, biomass, crude, distillate and final retail products) from the crop are sold. The profits derived from the sale of the various products produced from the respective crops when all the products from that crop have been sold are then shared between the Company and the Farmer on a 50/50 basis.
- The Company’s farming joint venture farming model has enabled the Company to more rapidly expand the land area and geographical diversity of its CBD hemp crops at very low cost and with minimal financial risk. This is due to the fact that a majority of the up-front farming costs are borne by the farmer and the production and sales and marketing costs are borne by the Company and those costs don’t need to be reimbursed to the farmer or the Company until the final products are sold. In addition, if for any reason there is a loss of the crop (due to adverse weather, storms, insects etc.) the Company and the farmer bare that loss equally and recoup any loss sustained from subsequent crops.
IMPORT / EXPORT AND DISTRIBUTION
- The Company has also entered into a range of import / export and distribution arrangements where it sees an opportunity to distribute its range of CBD hemp products in various countries. This part of the business is expected to develop quickly as acceptance of CBD hemp products increases and laws and regulations in various countries, in relation to the sale of CBD hemp products, are relaxed
- It is presently expected that approved CBD products will be able to be sold over the counter in pharmacies in Australia without a prescription by mid / late 2021).
- The Company’s objective is to be a valuable strategic joint venture partner to assist its farmer partners to develop and expand their CBD hemp growing capacity and to develop its business in all segments of the rapidly growing CBD hemp market by using its extensive experience, access to capital and domestic and international relationships to further develop the business.
- The Company intends to continue to develop a broad range of high quality, certified CBD products at the lowest possible price to assist in expanding of the overall CBD market and making CBD more readily available to consumers who will benefit from its use.
The Company- Past, Present And Future
Operating Model - How It Works
CBD Hemp Advantages
CBD Expanding Opportunities
- Agricultural businesses, unlike mining, have an indefinite life span.
- CBD hemp crops only take 3-4 months to grow from seed planting to harvesting of the mature plants ready for processing into crude or distillate. Company can grow 3 crops per year on each piece of farm land.
- As a result of the staggered planting and harvesting, short growing cycle and the geographical spread of the Company’s farming operations, the Company’s revenues are relatively consistent throughout the year .
- The Company is also constantly improving it seed strains and crop yield as new CBD hemp strains and growing and processing methods become available.
- The standard joint venture agreement between the Company and the farmer is for a term of 2-3 years (6-9 crops).
- Company can assess the likely revenue and profit to be delivered by each joint venture agreement (Calculated by the value of the crop in kilograms at various prices multiplied by the number of crops per year multiplied by the number of years of the joint venture agreement) and work out the total value of the agreement and then arrive at a Net Present Value (“NPV”) of the agreement to the Company.
- Rapidly growing CBD hemp market internationally.
- Health benefits of CBD becoming more widely understood.
- Regulations rapidly being relaxed internationally since 2018.
- Now legal throughout the USA and Canada and most of Europe and laws relaxing elsewhere.
- Expected to become available over the counter in Australia in early / mid 2021.
- Relatively low cost crop to produce.
- Relatively short growing cycle (3-4 months).
- Requires relatively little water and nutrients compared with other crops (eg. Rice).
- Over 50,000 uses for hemp plants.
- Can sell most components of the plant (CBD oil, crude, distillate, seeds, biomass / fibre and grain).
Current USA Operations
- Operate a CBD hemp seed growing greenhouse facility in Colorado, USA and licensed for a additional acres for seed growing operations outdoors.
- Operate a joint venture CBD hemp specific seed growing greenhouse facility in Arizona, USA.
- Have a number of joint venture farming agreements in place with farmers in Arizona and Texas for the planting of a number of joint venture CBD hemp crops.
- Distillate products now processed into finished product for sale in the USA, Europe and Australia and the first CBD hemp product sales (CBD Gel capsules) have now been achieved.
- Obtained the required licenses and permits to allow the importing of USA CBD hemp seeds into Australia and the growing of CBD hemp crops in NSW, Australia. Planted the first CBD crops in October 2020 which are due for harvesting in late Feb / early March 2021.
- Finalising additional CBD hemp growing joint venture farming agreements for the planting of additional CBD hemp crops in Texas and California the USA. Planting of these crops is due to commence shortly.
- Additional CBD hemp seed crops (various strains) have been grown in the USA capable of producing approx – 3000 – 4000 pounds of additional seeds per annum.
- Continuing to sell strains of CBD hemp seeds and other CBD hemp products to third party farmers / customers as well as into the farming joint venture’s.
- First retail brands “Opulent” and “Botanic Wellness” have now been established and are being sold in the USA, Europe and Australia under a range of wholesale and retail, online and retail sales arrangements.
- Additional range of CBD hemp products to be launched early 2021 for the cosmetics, personal care and anti-aging market.
Current Australian Operations
- Company has obtained the required licenses and permits from the Office of Drug Control (ODC) to allow the importing of CBD hemp seeds into Australia.
- Received licenses and permits from the NSW Department of Primary Industry for the growing of 100 hectares of CBD hemp near Deniliquin in NSW.
- First Australian CBD hemp crop planted in October 2020 (Southern NSW) due to be harvested in late February / early March 2021
- Company has also obtained Schedule 4 and 8 Licenses from the Department of Health and Human Services to sell and supply CBD in Australia.
- First of a range of CBD hemp products now included in the list of products capable of being supplied to patients in Australia under the Special Access Scheme and by Australian Authorised Prescribers.
NSW Farm prior to planting – October 2020
Machinery used for planting – October 2020
Seed planting (Week 1)
Early growth (Week 4)
Mid growth (Week 8)
Late growth (Week 12)
Harvesting (Week 16)
Extraction and processing. (Third party Processor)