Aurora Cannabis buys a piece of Burnaby hemp producer for $3.2M
Looking ahead to relaxed regulations that will allow the extraction of CBDs for use in the medical and health products.
VANCOUVER — Aurora Cannabis Inc. is taking a 19.9% ownership stake for $3.2 million in one of the world’s largest industrial producers of hemp as it looks ahead to harnessing cannabidiol for medical and health products.
Hemp contains extractable quantities of cannabidiol, a compound Aurora describes as having “considerable medical benefits in symptom management.”
Hempco Food and Fiber Inc., based in Burnaby, BC, produces bulk and packaged food products such as hemp protein powder, seeds or hearts and oil; hemp fibre; and nutraceuticals.
Aurora, a licensed producer of medical cannabis based in Vancouver, has an option to increase its ownership in the rapidly growing company to 50.1%.
Hempco recorded revenues of approximately $4.5 million over a six-month period ending in February, a 136% increase compared to the same period the previous year.
Hempco’s markets include vegetarians, consumers focused on healthy diet and millennials looking for “green” products.
The company is constructing a plant in Leduc County, less than five kilometres from the Aurora Sky production facility under construction at Edmonton International Airport.
Hempco’s new facility will double its current capacity to 225,000 kilograms per month of hulled hemp seed, and will be capable of scaling up to 600,000 kilograms.
Based on recommendation by the Federal Task Force on Cannabis Legalization, Aurora anticipates regulations preventing industrial hemp producers from harvesting leaves, flowers and buds will be revised to allow the processing of CBDs.
Cannabidiol does not have any intoxicating effects.
Aurora says the market for CBDs as capsules, oils and topicals is expected to show significant growth. There is also opportunity in the growing functional foods and natural health products space.