Alchemia completes shift from biotech courtesy of Australian Primary Hemp

Australian Primary Hemp ASX APH Alchemia reverse takeover RTO
Based in Geelong, Australian Primary Hemp is a vertically integrated hemp business selling a range of products to retail, wholesale and white label customers in Australia.

Former biotechnology company Alchemia has acquired hemp grower Australian Primary Hemp (ASX: APH) as part of a shift into hemp production and distribution.

To complete its reverse takeover (RTO) listing, the company raised $5.7 million by issuing 570 million new shares at $0.01 each and will switch from biotech to hemp production.

The proposed share sale agreement was first announced in June 2019 and four months later, the new entity is now trading on the ASX.

Australian Primary Hemp offers customers an end-to-end hemp service, handling everything from seed selection, farming and processing to contract packaging, bulk and retail sales.

The hemp grower was founded by Charles Mann who is expected to be appointed as the new entity’s director and chief executive officer with co-founder James Hood becoming a director and chief operating officer.

Why hemp?

Hemp has multiple uses and applications including being a nutritious source of food. Hemp can be used to make clothing, plastic, paper, construction materials and biofuel.

The plant has received plaudits from around the world and has undergone somewhat of a renaissance courtesy of legislative changes in the US and Australia.

Aside from industrial applications, hemp usage dates back as early as 8,000 BC where ancient villages in Taiwan used hemp cord in pottery, making it one of the first and oldest known human agricultural crops.

The plant also carries vast environmental advantages given its recyclability, reusability and is entirely biodegradable.

Hemp is different from cannabis and is completely legal to grow and eat after receiving approval from the Council of Australian Governments in November 2017.

Hemp is also vegan-friendly, GMO-free and doesn’t contain gluten, dairy, soy, sugar, cholesterol or any additives – making it an ideal product for the health-conscious Australian market where gluten-free and natural foods are experiencing a strong surge in recent years.

Australian Hemp

With the hemp market undergoing organic growth on a global scale and its benefits being so multifaceted, Australian Primary Hemp has quickly become an established and revenue-generating business, holding all necessary licenses, permits and approvals to conduct its business.

According to analysts, the international food market for hemp seed is estimated at $1 billion annually.

With the infusion of nearly $6 million, Australian Primary Hemp will look to expand its operations and accelerate its existing growth and production activities.

More specifically, Australian Primary Hemp purchases hemp seed which it then supplies to its farmer network, who then cultivate and harvest the hemp seed on the company’s behalf.

The hemp producer also purchases the cultivated hemp seeds under contract from their network of growers to process for sale.

According to the Alchemia’s prospectus, Australian Primary Hemp owns processing infrastructure, including de-hulling equipment and occasionally partners with third parties for additional value-add processing.

The company also supplies bulk product, as well as their own privately labelled products of hemp oil, hemp seed, and hemp-focused products including protein and fibre.

To demonstrate its unique product range, Australian Primary Hemp imports raw FINOLA hemp seeds from Canada and Finland and is currently the exclusive supplier of FINOLA in Australia.

In terms of sales and distribution, the producer maintains its own processing facility with the capability to package wholesale and retail-ready products.

Wholesale customers use hemp ingredients in a variety of products including breakfast cereals and hand creams.

In parallel, Australian Primary Hemp sells its own range of hemp-based products to its retail customers including hemp seeds, Hemp Boost, Hemp Balance milled powders and cold-pressed hemp oil.

With trading now commenced, the company has entered the market with a provisional valuation of almost $14 million.

At midday, Australian Primary Hemp shares were trading at $0.34.