CBD processing plant plans still on track

By COLLIN GALLANT on November 19, 2019.

cgallant@medicinehatnews.com@CollinGallant

As the cannabis stocks shudder this week as companies announce poorer than expected earnings and plans to scale back planned facilities, a company looking to capitalize on a tangential industry says plans are on track in to build in Medicine Hat.

Folium Biosciences chose Medicine Hat as its Canadian expansion location in early 2019, planning to build a new facility here totalling almost 200,000 square-feet to process and package CBD oil extracted from hemp.

Company has since said it will begin operations and seek federal licensing in a interim facility, and Canadian general manager Ryan Jackson said major plans are on track.

“Our plans haven’t changed,” Jackson told the News on Monday.

“We’re sort of a different animal. We’re hemp-derived CBD company and we’re also privately held.”

Shares in publicly traded cannabis companies have fallen since last week’s earnings reports.

Shares in Aurora Cannabis have fallen about 40 per cent since last week it announced a new strategy to preserve cash by operating initially in less than 20 per cent of the local Aurora Sun facility in 2020.

The remaining space could be commissioned as demand grows in consumer recreational market, which is lower than expected one year after decriminalization.

Jackson expects the interim Southern Alberta Folium facility to be operating in the first quarter of 2020, for which he said a supply of hemp has been secured. The new major facility is still slated to begin construction early next year. Health Canada requires facilities to be complete and in place, before licensing process formally begins.

Aurora reported growth in its medicinal lines, and stated that its huge, highly mechanized facilities, like Sun and several others in operation, provide low cost production of high quality cannabis. That, said company officials, would differentiate it in the market and support long-term growth.

Jackson, as well, said Folium’s process to eliminate THC (the intoxicating chemical in cannabis plants) content in hemp oil, would differentiate it in terms of CBD.

That is an ingredient in cosmetics, food and pharmaceuticals, and Folium plans to sell it in bulk to manufacturing companies.

It states that the company hemp, which has a low THC content to begin with, and its refining process completely purifies it.

“When it comes to hemp-derived CBD, there are very few companies operating,” said Jackson.

“I’m not aware of any other (substantial) ones. And we’re not a cannabis company, so we see the market being very robust.”

Jackson, who was the head of City of Medicine Hat’s investment attraction contractor when Aurora announced the local facility in April 2018, said the current volatility in the cannabis sector is not unexpected considering its relative youth and circumstances.

“Certainly it’s not surprising that there’s been a (stock) market correction, because no one knew the size of the (consumer) market to begin with,” said Jackson.

“It’s got to equal itself out somehow.”

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