NICI Quick Take
Hemptown is a private company that focuses on the production of CBD and other high-value cannabinoids like CBDV and CBG. The company initially established operations in Oregon, and is now looking to utilize technology to expand its reach and cultivate hemp in Colorado and Kentucky as well.
Canaccord Genuity Corp. acted as the lead agent on the company’s initial raise of C$23 million, which closed in May 2019. The company utilized about C$5 million of the raise to purchase its initial hemp seed portfolio. A couple months later in July, Hemptown acquired the nutraceutical business of the Kirkman Group, an FDA licensed and current Good Manufacturing Practice certified business based in Oregon. This allows the company to manufacture products that already meet FDA requirements, and be able to export these products overseas thanks to the GMP certification. The first consumer product iteration to come out of production was the Hemptown Chew, a CBD and CBG-infused gum. According to President Michael Townsend, the facility from the Kirkman group has the potential to generate $8 million a year with minimal upgrades.
In the first half of 2019, the company generated approximately US$10 million in revenue. It is now investing resources and money into the production of CBG, a separate cannabinoid that Townsend believes could bring in 10 times the revenue for CBD.
President and Co-Founder Michael Townsend worked in corporate finance for over 25 years, actively involved in raising over $180 million over the past 10 years, so it’s no surprise that the firm was able to secure a healthy amount of capital. As his first venture into cannabis, Townsend co-founded Body and Mind Inc., a firm he eventually took public in 2019.
Executive Chairman Rod Walterman is the company’s industrial hemp expert. He founded Hemptown’s Oregon hemp operations back in 2016, but has had an active role in the sector since the passage of the 2014 Farm Bill – the predecessor to the 2018 Farm Bill which spurred the growth of the CBD industry.
|NICI Subsector||Cultivator, Processor|