ESCONDIDO, Calif., Aug. 13, 2019 (GLOBE NEWSWIRE) — via NetworkWire — PRESS RELEASE — Marijuana Company of America, a hemp and cannabis corporation, and joint venture partner Global Hemp Group Inc. have announced that their joint venture subsidiary, Covered Bridge Acres Ltd. (CBA), has started generating revenue through operations at its hemp farm in Scio, Ore.
Through a combination of the sales of raw biomass, plantlets, CBD crude oil and CBD distillate produced from various processing test runs, along with other farm operations, CBA generated $525,500 in its first year of operation.
In its most recent transaction, CBA sold 10,000 lbs of shucked biomass to an Oregon extraction facility for $400,000. The CBA team is currently working with this party, and a number of others, to complete the purchase of the remaining inventory.
Initially CBA was expecting to monetize the 2018 hemp biomass after entering into a processing agreement with Richardson Gap Farm LLC (RGF), as disclosed on May 18, 2019. However, RGF was unable to process CBA’s biomass due to unforeseen issues with its processing equipment. Although RGF produces high-quality distillate, CBA was no longer willing to delay the monetization of its biomass any further and decided to sell the biomass to another extractor. With multiple offers on the table to purchase the biomass, CBA shucked the biomass (removed stalks and stems) and completed the sale.
CBA still has approximately 4,000 lbs of unshucked biomass out for processing into distillate by additional extractors, and will split the final product on a 50/50 basis with its joint venture partner, Marijuana Company of America, Inc. Once processed, it will be sold along with inventory on hand (8 kg of 92 percent distillate that was processed by RGF from crude oil CBA received from other processors test runs). Recent sales of this type of distillate have been in the $4,000 per kg range.
Innovation and mechanization are key components to reducing labor costs on the farm. In preparation for the handling of this year’s harvest, the CBA team specifically designed a shucking machine to remove the flowers and leaves from the stalk and stems, and is in the process of fabricating a prototype, having reserved a small amount of biomass to test the equipment. Once shucked, the biomass will be processed into distillate for sale on the open market later this summer.
2019 Cultivation at the Scio, Ore., Farm
A significantly larger quantity of biomass is expected from this year’s harvest as compared to the previous year, due to improved genetics, a longer growing season with earlier planting, and more plants in the ground. This year, the CBA team planted approximately 22 percent more plants at the farm (49,000 plants compared to only 40,000 in 2018). With the late start in 2018 due to timing of the farm acquisition, CBA’s access to higher quality genetics was limited. As a result, approximately 4,000 male plants were required to be culled from the field, netting approximately 36,000 plants at harvest. With improved more stable genetics this year, the number of male plants required to be culled from the field should greatly be reduced. In addition, cultivars planted this year are expected to produce higher CBD yield from improved genetics.
In addition, incentive stock options have been granted to directors, officers and consultants of the company to purchase up to an aggregate 5,750,000 common shares of the company, pursuant to the terms of the company’s stock option plan as approved by the shareholders on April 26, 2019. The stock options are exercisable at a price of $0.06 per share for a period of a five years.