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Contributing to environmental solutions through investment in hemp

Change Agronomy is supplying carbon-negative hemp products to multiple global end markets.

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Contributing to environmental solutions through investment in hemp

London investment firm Chrystal Capital has announced the £7m private placement of Change Agronomy, offering the opportunity for investors to contribute to hemp as an environmental solution to climate change.

As leaders from across the globe gathered for COP26 to discuss securing net zero emissions by 2050, businesses are looking for ways to reduce their impact on the environment. Planting trees is one solution – but hemp is also one material that is offering hope, as its production is carbon negative. Hemp also offers an eco-alternative material to plastics as numerous sectors begin to look to harness environmentally friendly alternatives.

Sustainably focused company Change Agronomy is already operating in the legal hemp market across North American and 30 other countries – a market estimated to reach US$26Bn by 2025.

The company is supplying carbon-negative products to multiple global end markets including automotive, textiles, bioplastics, packaging, biofuels and healthcare.

The private placement gives investors 24% of the company and has been structured through a UK holding company to position the company to be a potential London Stock Exchange Main Board listed company on a 12-month view. 

So far, the offering has had significant investor interest from High Net Worth individuals, family offices, wealth managers, and impact, sustainability and ESG funds, and is expected to close in early December.

“What’s exciting about this is the opportunity to be involved with a very macro level in what is probably one of the most sustainable businesses that we’ve ever come across,” says Kingsley Wilson, founding partner at Chrystal Capital Partners.

“An acre of hemp sequesters around 10 tonnes of carbon every 100 days, which compares to a rainforest taking two and a half tonnes every 20 years. So, the ability to take huge amounts of carbon out of the atmosphere via industrial hemp cultivation fits perfectly with a major global driving thematic investment trend at the moment, with governments, companies and investors all trying to figure out how to get to carbon net-zero by 2050.

“I would call this nature’s technology, or solution, to the problem that has been created by humans, first of all by polluting the world, but also then inexplicably banning hemp over the past 80 years. At scale, this could become a very major solution to global warming, but also a great solution for multiple different global industries from textiles, bioplastics and electric cars in terms of how this hemp plant and its multiple end products, once processed properly, could be used to create sustainable products. For example, hemp bioplastics can degrade in 72 days, not 1000 years.”

Change Agronomy owns the rights to seven premium hemp genetics globally and has a seed propagation facility in Italy that facilitates global supply at a large scale – having already grown 9,600 acres to date, along with 44m pounds of hemp biomass on-site at a fully operational state-of-the-art hemp facility in Canada.

“Change Agronomy has been in the industrial hemp market for several years, they truly understand how to do this at scale and substantially de-risk this proposition. They have farmed nearly 10,000 acres already – they have learned how to farm with the best genetics, to efficiently take it off the field, and process it through a state-of-the-art facility that creates multiple end products from the hemp plant fractions.

“Because they can supply all of these different end fractions from that hemp plant to all of these different industries, they have got lots of different customers queuing to get access to these products which are now available for the first time at scale. This is a company that is going to generate great revenues and profits in the very near term as well, which we believe is going to be a strong driver of shareholder value and upside for investors,” added Wilson.

“In 1941, Henry Ford built the first net carbon zero car built out of hemp and fuelled by hemp ethanol right around that time it all got banned. Now, 80 years later there is this big drive towards making cars more sustainable and to go electric. Generating electricity to power those cars is still burning fossil fuel, whereas hemp has solutions in terms of the fuel and in terms of how you make more sustainable and biodegradable cars.

“A lot of these industries are growing up alongside Change Agronomy, so, investors are getting the chance to invest at ground zero in the whole global hemp supply chain which is forecast to grow to US$25bn by 2025, making it one of the fastest-growing sectors in the world. More of these companies all wanting to use sustainable hemp end products are going to spring up across all of these different sectors and there will be more demand for what they produce at large scale.”

With carbon offsetting set to become a major contributor to the reduction of emissions across the economy, Wilson says the potential for Change Agronomy to create carbon credits will be a key component of its future growth.

“Governments are behind the move towards sustainability. So, in addition to investor capital, we can get relatively low-cost funding, or government funding, to help fuel the growth of this business.

“There are also lots of companies out there polluting the world which want to buy credits to absolve themselves for what they are doing. Therefore, we think the carbon credit market is going to become a very big piece of all of this, and Change Agronomy will be a major source of credit. Not just growing it in the field, but when you put hemp to end products like insulation and housing, or hempcrete – it continues to take carbon out of the atmosphere so they will be eligible for further credits.

“That makes this interesting because, at scale, those carbon credits could make the whole farming and operation side free, and therefore dramatically increases the profitability of the business.”

Markets and industry

Industrial hemp in Europe driving global market growth

A new report has projected the market to exceed $310m by 2027.

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A new report has attributed the growing hemp market in Europe as a driving factor of global growth.
Home » News » Markets and industry » Contributing to environmental solutions through investment in hemp

A new report has attributed the growing hemp market in Europe as a driving factor of global growth.

A once under-utilised crop, hemp is now seeing strong growth thanks to the demand for alternative products. Food, drink and personal care products are driving the growth of the industrial hemp market.

A new report from Global Market Insights has highlighted government regulations and policies associated with the legalisation of cultivation, as well as escalating demand for hemp products as a main driver of the market.

 The market size was over USD$205m (~£151.09m) in 2020 and is projected in the report to reach $310m by the end of 2027.

Fibre and seeds

Hemp is utilised extensively in the pulp and paper industry as it is a considerably more sustainable crop than wood. This is due due to the fact its does not need bleaching produces more pulp per acre, offers enhanced paper strength, and utilises chemicals that are less toxic compared to wood paper. 

The report highlights that government regulations seeking to limit wood harvesting and the associated harmful consequences of wood pulp and paper production, are likely to foster product uptake. 

Read more: Italy plans hemp production increases: could the UK be next?

It speculates the segment will see robust growth to attain a valuation of more than $70.5m by 2027.

The hemp seeds segment is slated to surpass a valuation of around $74.5m by 2027 under food and beverages application, due to their wide use in supplements, such as protein powder and meal replacement bars and snacks. 

Europe

The report has attributed a proliferating industrial hemp market in Europe as well as mounting product application in automotive manufacturing as additional drivers of growth in the global market.

It notes that the Europe industrial hemp market is projected to progress at a CAGR of approximately 5.5 per cent over the forecast period to surpass a valuation of $80.5m.

Growing consumer awareness of the plant’s therapeutic effects has also boosted product demand in recent years, according to the report. 

To read the full report please visit: https://www.gminsights.com/roc/3306.

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Markets and industry

Canxchange launches new trading system for the cannabis market

Canxchange is introducing more transparency, liquidity and efficiency to the growing cannabis market through its new platform.

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Canxchange launches new trading system for the cannabis market

Canxchange, the leading physical hemp and CBD exchange, has launched a new electronic trading system for the cannabis market to simplify sourcing, buying and selling.

The new Canxchange trading system is the result of more than one year of product development and engineering work. 

The platform provides electronic trading, market surveillance tools, price discovery options, data and features to enhance daily business and transactions for Canxchange members.  

CEO and co-founder of Canxchange, Alex Arkentis, commented: “As we continue to improve and upgrade Canxchange, our main objective is to facilitate our members based on their feedback and market needs. 

Read more: Canxchange benchmark report reveals outlook of European hemp market

“We have spent the past two years listening closely to what our members are looking for and educating ourselves on what the industry lacks. 

“With the launch of our latest platform, now our  traders can focus on their strategic priorities, and rely on Canxchange to handle everything else.”

The platform has been designed based on market and member feedback, to simplify the process of sourcing, buying and selling. 

New platform features include: 

  • Simplified processes and more powerful user experience 
  • Production and distribution procurement contracts 
  • Market surveillance tools 
  • Data and pricing analysis 
  • Micropayments 

It will leverage the expertise and proven track record of Canxchange, a European leader in physical cannabis trading with a reputation for world-class technology, cutting-edge service solutions and trading reliability and efficiency. 

Read more: How the cannabis industry is overcoming a lack of trust

Canxchange has said that it plans to continue developing its operation and network of users globally, following the success seen by adopters of the platform across Europe.  The company aggregates farmers, producers and extractors and a wide range of industries under one roof; offering a wide network of vetted businesses to its members.

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Markets and industry

Oxford Cannabinoid Technologies sees positive progression

Oxford Cannabinoid Technologies Holdings has begun 2022 with a positive start and has announced a new date for the start of its Phase I trial.

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Oxford Cannabinoid Technologies provides positive update

Oxford Cannabinoid Technologies Holdings (OCTP) had a positive year in 2021 and has begun 2022 on the same foot. 

The company has reported financial results for the six-month period ending 30 November 2021 in line with expectation, during which approximately £920k of research and development costs were incurred. The costs were primarily on lead drug candidate OCT461201, which accounted for approximately £604k of the total.

OCTP and its subsidiary, Oxford Cannabinoid Technologies Ltd. (OCT) had total cash reserves of approximately £12m and no debt, having repaid a Government bounce-back loan of £50k in full. The group has noted that progress is being made on all four of its programmes.

CEO, John Lucas, commented: “We are pleased with the progress made on all four programmes during the Period. OCTP remains on time, on budget and in line with our expectations. 

“This was a busy period for the company following the successful listing in May. 

“During the first half, we made good strides across the board and, as such are excited by the potential as the year progresses and look forward to updating the market further in due course.”

2021 also saw the company enter into agreements with leading global cannabis company Canopy Growth Corporation, as well as with Aptuit (Verona) SRL, a subsidiary of Evotec SE (Evotec).

OCTP’s agreement with Canopy Growth Corporation gives the company an exclusive license to Canopy Growth’s cannabinoid library. This includes 335 derivatives and 14 patent families. Oxford Cannabinoids has now begun screening the drug-like compounds in multiple therapeutic areas, including pain, neurology, immune-inflammation and oncology. 

OCTP is working with Dalriada Drug Discovery to screen the compounds and Oxford Cannabinoid Technology’s (OCT) existing proprietary cannabinoid library. Dalriada previously designed, synthesised, and experimentally tested all of the compounds in the Canopy library and as such, OCT will be able to leverage Dalriada’s existing knowledge and experience as it continues its experimental research. 

The aim is to identify two drug candidates for pre-clinical development by the end of 2022.

A further agreement with Oxford Stemtech announced in November 2021, is supporting the research and development for all the company’s drug development programmes, with a particular focus on programmes three and four.  

Stemtech’s “pain-in-a-dish” model replicates human pain using stem cells from volunteers that are re-programmed into pain neurons. This agreement also marks an evolution of OCTP’s relationship with Oxford University Professor, Dr Zameel Cader.

OCT also entered into a £2.6m contract research agreement with Aptuit (Verona) SRL, a subsidiary of Evotec SE (Evotec) in July 2021. 

Read more: Further drug development agreement for Oxford Cannabinoid Technologies

The company has confirmed in its update that the planning phase has been completed and “wet-work”, manufacturing process development and crystallisation development have now been initiated. 

It has also confirmed that it is anticipated that Evotec will provide the OCT with a submission-ready regulatory document and an approved batch of drug product that is ready for Phase 1 clinical trials by Q1 2023. 

Originally set to commence in Q3 2022, the date for the trial has been moved to Q1 2023 due to technical issues requiring additional optimisation of the crystal development for scale-up manufacturing, which has been now successfully implemented.

The OCT board has stated this will not impact time to Phase II clinical trials, there is no material cash flow impact and the time to market is currently anticipated to remain the same.

The agreement with Voisin remains on track according to the update with a roadmap ti clinical development having been generated to support the ongoing pre-clinical package for programme one.

Voisin has also undertaken activities in preparation for the commencement of the Phase I clinical trials and is providing the  Group with regulatory support to address immediate priorities for filing and registration of Programme 2’s metered-dose inhaler in the UK and US market.

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