Hemptown Organics Corp., a hemp company that does business as Hemptown USA, said Tuesday it raised CA$23.3 million ($17.2 million) to fund an expansion of its operations.
The company raised the capital with the involvement of Canaccord Genuity as the lead agent on the brokered portion of the financing. Investors include Sprott Capital, Beacon Securities and Pacific International.
In March, Hemptown said it would sell convertible debenture units at CA$1,000 per unit for gross proceeds of CA$15 million through a brokered offering. In addition, it launched a non-brokered offering for up to an additional CA$15 million in units carrying a 9-percent interest rate.
Why It's Important
Hemptown said it's using the newly raised money, as well as existing revenue and capital, to start expanding across nationwide.
The company said it acquired $5.5 million in Oregon CBD seeds and started building processing and extraction facilities.
Hemptown grows high-grade feminized hemp and processes full-spectrum CBD and CBG crude and distillates that provide higher yields compared to industrial hemp. In its first year, it obtained 110,000 pounds of hemp biomass.
Hemptown is growing 1,500 acres in Oregon, Kentucky and Colorado, and said it has the capability to more than double the acreage in 2020 and 2021.
In the next three years, Hemptown said it will focus on farming more novel cannabinoid strains. It also plans to acquire a cGMP nutraceutical facility to develop cannabinoid products for the health and wellness industry.
“The recently passed Farm Bill deems hemp to be an agricultural commodity - not a controlled substance. As a first mover with a solid management team and proven business model in the best jurisdictions in the US, Hemptown USA is incredibly well positioned to capitalize on this opportunity. As an investor, I look for strong management with a potential multi-billion dollar market opportunity,” Jeff Tindale, President of Birken Capital said in statement.
The company is also eyeing an entry into the consumer packaged goods sector by building and acquiring brands.
Photo courtesy of Hemptown USA.
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