Via its subsidiary Medical Cannabis Ltd, Queensland Bauxite (ASX: QBL) will take a 55% stake in Hemp Hulling Co, which now gives the company a strong foothold across the entire hemp food supply chain, in what Queensland Bauxite executive chairperson Pnina Feldman describes as a “monumental” deal.
Medical Cannabis will acquire 55% majority interest in Hemp Hulling, and in return, Medical Cannabis will issue 5% of its Vitahemp brand to Hemp Hulling’s owners. Additionally, Medical Cannabis will invest $300,000 in upgrading Hemp Hulling’s processing equipment.
Once Medical Cannabis debuts on the ASX, Hemp Hulling’s shareholders will receive A$1.5 million in the company’s shares.
Based in Australia, Hemp Hulling is a processor of food grade hemp seeds. The company’s hemp processing equipment is modern, and its staff has many years’ operational experience in treating the material.
As part of the agreement, Hemp Hulling’s seeds and ingredients will be incorporated into products sold under the Vitahemp brand.
With its 55% interest in Hemp Hulling, Medical Cannabis will have control across the entire hemp value chain from planting, growing, harvesting, manufacturing, marketing, and supplying consumers with food products under Vitahemp.
Ms Feldman said Vitahemp’s hemp seed-based foods will now be supervised through the entire value chain to meet Australia’s quality criteria.
“Many believe hemp seed is the world’s most nutritionally complete, affordable and sustainable food source,” Ms Feldman said, adding that consumer demand was strong.
In addition to its own facilities, Hemp Hulling has a strategic alliance with Waltanna Farms which processes flax, hemp seed oils, proteins and flours and will assist Hemp Hulling with manufacturing digestible plant-based powders, flours, cold pressed oils and work on producing new hemp food ingredients.
As part of acquisition, Hemp Hulling’s Peter Edwards will join Medical Cannabis’ management team, which is also responsible for Vitahemp. Ms Feldman said Mr Edwards’ knowledge would assist the company with growing the Vitahemp brand locally and abroad.
“Having immediate access to and control of the processing capacity, experience, knowledge and innovations of Hemp Hulling saves Medical Cannabis what would have been multi-millions of dollars that would have been needed to be invested in its own set up costs in order to be guaranteed processing and manufacturing in the mass quantities Medical Cannabis is looking to produce for the local and global marketplace,” Ms Feldman said.
The company is aiming for local and international distribution of Vitahemp products during 2018.