Cannabis-diversified resources company Queensland Bauxite (ASX: QBL) has announced further market progress with respect to its recently changed path towards commercialising medicinal cannabis.
Queensland Bauxite says it has entered into a head of agreement with Sebastian and Samuel Edwards, owners of Hemp Hulling Co (HHC) to acquire their Health Food Brands unit through scrip issuance to the tune of 21.6 million shares.
HHC is already 55%-owned by Queensland Bauxite through its subsidiary Medical Cannabis Ltd (MCL) with the company describing the Edward family’s work ethic and expertise during the past year to help develop HHC as “impressive”.
Queensland Bauxite announced its intentions to bring its stake in MCL up to 100% in June this year as a surprise to shareholders that broke its laborious 2-month trading halt.
Partnering with the Edward family
Sebastian and Samuel Edwards are the founders of Organic Markets Direct (OMD), a major wholesaler of health foods that include hemp seed products, chia seeds, green leaf stevia, cacao, buckwheat, brown rice and other health foods.
According to Queensland Bauxite, after undertaking discussions with the Edwards brothers, both parties “felt the time was right” that these brands be merged with QBL’s MCL business to create “one large health and wellness food group” underpinned by MCL’s expanding hemp business.
“This is a true whole-food collective of street market knowledge, corporate knowledge and experience. This newly combined group has a common passion for Australian grown and selective high-end imported health foods,” according to a Queensland Bauxite company statement.
To complete the acquisition, Queensland Bauxite intends to issue 21.6 million shares in return for 100% of the shares in T12 Holdings, a company owned by the Edwards family and expected to play a key role in raising the distribution and production of MCL’s suite of nutritional hemp products.
Although the deal was announced earlier today, the acquisition is subject to shareholder approval which Queensland Bauxite hopes to obtain at its upcoming shareholder meeting on 14 September, 2018.
It will be the second time in three months that the company’s management goes to its shareholders with significant plans that will likely influence its ultimate success in its newly-found market direction.
The company said that today’s deal establishes a solid foundation for its subsidiary MCL to create an infrastructure “primed for expansion” into the burgeoning multi-billion-dollar health foods market in Australia.
Coinciding with its announcement, Queensland Bauxite said that it prides itself on “connecting dots” and finding the right people to enhance its core values who “can produce profits and are motivated to continually do it better”.
The intended acquisition will also consolidate QBL’s MCL business with respect to VitaHemp, owned by Peter Edwards, yet another member of the Edwards family to be closely connected to MCL’s burgeoning business plans.
In December last year, MCL launched its first line of VitaHemp products at the Health and Innovation Expo in Melbourne and commenced mass production for local and international markets.
The first products made available to consumers were VitaHemp hulled hemp seeds, raw cold pressed hemp seed oil, hemp seed powder and hemp seed flour blends.
VitaHemp is also developing additional proprietary products including a hemp honey which VitaHemp intends to offer to customers at around $50 per 320-gram jar.
Most recently, VitaHemp released Australia’s first-ever homegrown and processed hemp seed oil soft-gel capsules. In the space of a week, VitaHemp launched an entire range of “black label” products via its website.
According to VitaHemp, its ‘Black label’ range of hemp seed oil products are the next advancement in “cold-pressed refining” that is able to refiner smoother oils and extend the shelf-life of hemp seed oils without nutrient loss.