Mr. Philip Campbell reports
ASCENT ANNOUNCES LAUNCH OF GLOBAL HEMP STRATEGY
Ascent Industries Corp. has formed a new wholly owned subsidiary, Thirty Eight Hemp Corp., to launch the company's global hemp strategy. Thirty Eight Hemp is pleased to announce it has signed a hemp supply agreement with AgTech Scientific Inc. of Paris, Ky., a licensed cultivator, processor and distributor of high-cannabidiol content hemp and hemp-based biomass.
The regulatory regime in the United States relating to cannabidiol (CBD) is undergoing a significant transformation. The movement toward the removal of hemp (cannabis with less than 0.3 per cent tetrahydrocannabinol content from Schedule I of the United States
Controlled Substances Act is gaining momentum). Last September, the United States Drug Enforcement Agency advised that Epidiolex, a drug containing CBD approved by the Food and Drug Administration and used to treat seizures associated with two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, would be a rescheduled to Schedule V from Schedule I of the United States
Controlled Substances Act. In addition, when the United States
Hemp Farming Act
of 2018 is enacted, hemp will be fully descheduled from the CSA, making it an ordinary agricultural commodity and providing a significant market opportunity for hemp-derived products.
The company's wholly owned operating subsidiaries in Oregon and Nevada are legally permitted to handle hemp and are presently selling CBD-based products in those jurisdictions. When the Hemp Farming Act has been passed into law, Thirty Eight Hemp plans to produce and distribute CBD and other hemp-derived products throughout the United States and abroad, which will significantly expand the company's hemp distribution.
In that regard, under the terms of the supply agreement, AgTech will supply up to 25 per cent of its hemp biomass production containing greater than 10 per cent CBD to Thirty Eight Hemp, either in the form of biomass or extracted CBD, with no minimum amounts required to purchase. In addition, the company will increase its ownership interest in AgTech to approximately 10 per cent, subject to appropriate approvals being received, by investing $500,000 (U.S.) in AgTech.
Furthermore, AgTech and Thirty Eight Hemp plan to enter an arrangement whereby AgTech will assist Thirty Eight Hemp with the distribution of various CBD and other hemp-derived products in approved jurisdictions in the United States, while Ascent will provide certain expertise and intellectual property to help AgTech with building its next hemp processing facility in Kentucky.
AgTech holds a 2018 grower and processor licence from the Kentucky Department of Agriculture. AgTech has strong relationships with the State of Kentucky, has spearheaded a farming initiative with Kentucky farmers and has established a three-year research partnership with the University of Kentucky. Since the introduction of the Agricultural Act of 2014, which permitted industrial hemp production, AgTech has been growing hemp in Kentucky. AgTech grew over 200,000 hemp plants in 2018, and plans to grow over four million plants next year by adding more farmers to the AgTech supply chain. AgTech currently occupies a 30,000-square-foot facility, and is constructing a state-of-the-art, 50,000 sq ft licensed hemp manufacturing facility in Bourbon county, Kentucky.
Reid Parr, chief operating officer of Ascent Industries, comments: "Thirty Eight Hemp's investment into and partnership with AgTech will expand the company's access to the high-quality, low-cost input material for our hemp-based products in North America once the Hemp Farming Act is passed. We look forward to future collaboration to meet anticipated market demand for hemp-based CBD products across several market channels."
Dr. Brian C. King, chief science officer of AgTech, stated: "The success of our business model is built on rich partnerships: The State of Kentucky, the University of Kentucky, the farmers of Kentucky and now our partnership with Thirty Eight Hemp Co. We look forward to being a leading supplier of industrial hemp to Thirty Eight Hemp Co. and benefiting from their expertise in research, development and production of CBD and CBD-based products."
About Thirty Eight Hemp Corp.
Thirty Eight Hemp is a wholly owned subsidiary of Ascent Industries that has been organized to implement the next phase of the company's hemp strategy to produce and distribute CBD and other non-THC product lines throughout Canada, the United States and internationally. Ascent's wholly owned operating subsidiaries in Oregon and Nevada are licensed to handle hemp and are presently selling non-THC products into those legal jurisdictions. When the Hemp Farming Act has been passed into law, Thirty Eight Hemp plans to produce and distribute CBD and other hemp-derived products throughout the United States.
About Ascent Industries Corp.
In Canada, Ascent (through its wholly owned subsidiary, Agrima Botanicals) is a licensed producer under the Access to Cannabis for Medical Purposes Regulations of Health Canada, with licences to cultivate cannabis and produce cannabis extracts. In addition, the company is a licensed dealer under the Controlled Drugs and Substances Act (Canada), with the ability to produce, package, sell, send, transport and distribute medically focused cannabis products in Canada to other licensed entities and internationally in jurisdictions where medical cannabis is legal. In the United States, the company holds licences in Oregon (for processing and for distribution of cannabis to any licensed entity in the state) and in Nevada (for cultivation and for production, processing and wholesale distribution of cannabis). In Europe, Agrima ApS, a Danish company and wholly owned subsidiary of Ascent, has submitted licence applications for a wholesaler dealers licence and controlled drug licence in Denmark, and applications for the approval of eight products to the Danish Medical Cannabis Pilot Program.
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