Fast-tracking the commercialisation of a range of high-performance, hemp-based textiles has been slated as top priority for ASX newcomer and hemp producer Ecofibre (ASX: EOF), which officially listed today.
The Brisbane-based company raised $20 million at $1 per share from an initial public offering last month to list with a market capitalisation today of more than $300 million.
It is the first cannabis-related IPO of the year and funds raised will be used to accelerate the commercialisation of Hemp Black – a range of innovative hemp-based textiles being developed in partnership with Thomas Jefferson University in the United States.
Key areas covered will include product development, sales and marketing, customer samples and other commercialisation expenses.
Ecofibre chairman and medicinal cannabis supporter Barry Lambert said the ASX listing has been timely given the hemp industry’s rapid growth.
“Consumers are increasingly aware of [hemp’s] many benefits and regulators have responded by making hemp products more accessible,” he said.
“Our vision is to become the global leader in hemp technologies by providing innovative solutions which address emerging health and resource sustainability issues.”
Who is Barry Lambert?
Having ranked in the top 200 of Australia’s rich-listers last year, Barry Lambert has been a staunch advocate of medicinal cannabis since his grand-daughter was diagnosed with a rare form of epilepsy currently being eased with low-THC Endoca cannabis imported from the US.
In 2014, Mr Lambert invested in Ecofibre which specialises in the production of cannabis for medicinal use, hemp fibre for clothing and seeds for food to customers in the US and Australia.
In the US, the company produces nutraceutical products for human and pet consumption, as well as topical creams and salves under subsidiary Ananda Health – a vertically-integrated business marketing under brand names Ananda Hemp and Ananda Professional to wholesale, retail and white label customers in the US.
Hemp food products grown and manufactured in Australia include protein powders, dehulled hemp seed and hemp oil under a second, vertically-integrated subsidiary known as Ananda Food.
Products are sold to domestic, and potentially Asian customers, and growing areas have been increased significantly for existing and potential future demand.
The company’s third line is the pre-commercial Hemp Black business, which seeks to develop and eventually distribute its hemp-based, high-performance clothing on a global scale.
Although both are derived from the genus Cannabis Sativa L., hemp and marijuana are distinctly different products with the latter containing naturally-occurring levels of the psychoactive cannabinoid THC (or tetrahydrocannabinol).
Marijuana is primarily used for recreational and medicinal uses due to the THC content and related euphoric properties.
Conversely, hemp contains only trace levels (usually no more than 0.3%) of THC and is grown as an agricultural crop for food, nutraceuticals and industrial applications.
In December, the US government introduced the 2018 Farm Bill which removed hemp – including its extracts, cannabinoids and derivatives – from restrictions under the Controlled Substances Act.
The bill made hemp a federally-legal agricultural commodity which could be commercially cultivated and used in products within the US.
In Australia, hemp foods became legal for human consumption in November 2017.
Globally, the use of hemp for industrial purposes is widely accepted.
At mid-afternoon, shares in Ecofibre were steady at $1.68, more than 50% higher than the IPO issue price.