BPH Energy (ASX: BPH) has announced that its investee company Patagonia Genetics has acquired an additional 24 cannabidiol (CBD) and hemp strains to add to its existing collection of over 260 strains, thereby expanding and expediting its plans to commercialise its overall genetic library next year.
BPH first made a commercial commitment in Queensland-based Patagonia earlier this year after acquiring a 10% interest in the craft cannabis company with a further option to increase its initial stake to 49%.
Patagonia Genetics has secured the exclusive worldwide distribution rights to Chile’s leading cannabis fertiliser range Wonderland Agronutrients, which includes ‘home grow’ and algae-based biostimulant products.
In a market update in September, BPH confirmed that Patagonia had purchased its first 1,300 litres of Wonderland products and would be sending samples to major licenced cannabis producers and international growers.
Bountiful hemp industry progress
Today’s news of Patagonia’s expansion is therefore a positive development for BPH as the company continues to grow its operations and intended expansion in Latin America.
With respect to CBD, Patagonia said it would be signing a contract with award-winning Colombian growers dubbed the “Buddah Twinz” after its directors led by in-country manager Miguel Serrano personally inspected a unique genetic seed bank, comprising of over 150 strains earlier this month.
According to Patagonia, the strain breeders boast 17 years’ experience in cannabis cultivation and 6 years’ experience in commercial cultivation and export. Moreover, they were awarded ‘Best Extracts in Colombia’ and 2nd place in ‘Solvent Extracts’ at a Colombian growing contest called “Dabadoo”.
After careful review of the genetics available, Patagonia selected 24 strains that it believes holds significant potential in both the medical cannabis and hemp markets. The company’s directors explained that after their visit, Patagonia chose to contract the Buddah Twinz to conduct “characterisation grows” in order to obtain fresh Certificates of Analysis (COAs) on every strain.
The collated data is expected to provide technical details on the levels of contained cannabinoids, terpene profiles, flowering periods and most importantly, potential yields. Once data analysis is complete, the strains can be marketed to large scale medical cannabis and hemp farmers.
Additionally, the genetics may also offer a new range of phenotypes for Patagonia to incorporate into its planned breeding program, from short flowering periods, high yields, full-spectrum levels of CBD, but also, cannabigerol (CBG).
Despite being a minor constituent of cannabis, CBG is the non-acidic form of cannabigerolic acid, the parent molecule from which other cannabinoids are synthesised.
As things stand, the CBG compound has not been subjected to any clinical research and is not scheduled by the UN Convention on Psychotropic Substances and is not a controlled substance under the US Controlled Substances Act.
If successful in its attempt to develop a string of potent strains that can generate high yields, Patagonia intends to ramp up its commercial operations and generate sales revenues as early as Q1 2020.
In parallel to its partnerships, Patagonia currently has a total of 11 applications lodged with the local Livestock & Agriculture Service (SAG) and expects the granting of first licenses by the end of this year or in the first quarter of 2020.
More specifically, the company said it intends to license flagship genetic strains, sell feminised seeds to large-scale medical cannabis and hemp farmers, clone various strains and conduct its own breeding programme to cater for specific client demand.
Most interestingly for BPH Energy, Patagonia intends to sell medicinal cannabis products throughout Chile as well move into neighbouring countries in Latin America via joint ventures.
Patagonia said it is “currently in discussions” with a supplier of extraction equipment that can produce EU GMP certified extracts with the ultimate intention of Patagonia procuring EU GMP extraction facilities in return for a share of generated revenues.