CannaVest, a Las Vegas-based company that is investing in the development of foods and supplements from hemp, announced a thin gain from operations in its second quarter of 2014 buoyed by a large paper transaction involving a subsidiary that boosted the company’s bottom line.
Hemp in Colorado
CannaVest reportedly has contracted with a Colorado farmer to grow to grow a hemp crop for the company this year and also has a pilot hemp plot in Kentucky. CannaVest also says it has 5,000 hectares of hemp production in Europe. The company has announced plans to build a milling and extraction facility in Colorado to make hemp seed oil, de-hulled hemp seeds, and hemp protein powder as well as process, market, and sell the high-value hemp fiber and hurds for construction materials and automotive parts.
Colorado, in writing its hemp regulations, defined industrial hemp, a cultivar of cannabis sativa, as having less that 0.3% THC content. THC, or tetrahydrocannabinol, is the narcotic fraction of cannabis sativa. Cannabidiol, or CBD, is another bioactive but non narcotic fraction that has anitoxidant and anti seizure properties. Whether a supplement based on CBD can legally be sold in states other than Washington and Colorado, which currently have laws legalizing the small scale sale of recreational marijuana, is an open question.
The hazy legality picture hasn't fazed Christopher Boucher, vice president of product development at CannaVest. Boucher was active at the Supply Side West trade show in Las Vegas last November, where under the banner of subsidiary US Hemp Oil he was prominently promoting CBD fractions for supplement use.
“I believe that is it a legal supplement ingredient. The pure oil is considered GRAS. Under the United States Uniform Tariff Code they tax and code hemp as a vegetable. I don’t know anything that’s a vegetable that isn’t GRAS. When we import it, it is always considered a vegetable, so that’s what we use in our declaratory actions,” he said.
Boucher is not alone in that determination; in March of last year Canadian medical marijuana company Abattis announced plans to bring a CBD-infused kombucha drink to market and reportedly has been looking at locations for a plant in Boulder, CO in conjunction with the brand Rize Kombucha.
CannaVest reported net income from operations of $132,000 in the quarter, compared to an operating loss of $328,000 in the same period a year earlier. The company also reported a gain of $7.9 million in a paper transaction involving an exchange of shares between two subsidiaries. Selling, general and administrative costs in the quarter wered $1.5 million, compared to $419,000 for the same period in 2013. The company spent $157,000 on R&D during the quarter. CannaVest says it has about $9.3 million cash on hand.