Canadian firm bets on Colombia for low cost hemp cultivation

Relevium, which sells a variety of dietary supplements on platforms such as amazon.com​ and walmart.com​ via a subsidiary called BioGanix.  The company also has a subsidiary called BioCannabix focused on the medical cannabis markets in Canada and Europe.

In addition, the company has registered a trademark called LeefyLyfe, with which it says it poised to enter the CBD market in the United States when the regulatory picture for this ingredient becomes clearer.

 On May 31, the US Food and Drug Administration convened a public meeting about the ingredient that is the first step in this process.  The timeframe for a final resolution is up in the air;  FDA itself has put forward a three-to five-year process for a formal rulemaking, which some stakeholders, including Sen. Ron Wyden (D-OR) have viewed as overly long.  An alternative would be new legislation, which would be subject to the vicissitudes of the legislatives process.

Best places to grow hemp

The question about where best to site operations is becoming a pressing one in the rapidly developing hemp/CBD market. Getting this right could have much to do with which companies survive the hurly-burly period of the nascent market, which will inevitably see some of the early adopter brands fall by the wayside.

Hemp cultivation is ramping up in the Unite States, but where this is happening has more to do with the legal history of the ingredient rather than where cultivation makes the most sense.  Colorado, for instance, had a head start as one of the first states to approve full recreational usage of cannabis, and as a result now has significant hemp and marijuana acreage.

 However, another Canadian company, Neptune Wellness Solutions, (formerly a major player in the krill oil market) recently announced that it acquired a hemp extraction facility in North Carolina.  At that time Neptune CEO Jim Hamilton told NutraIngredients-USA that in his company’s view the former tobacco belt states such as North Carolina and Kentucky will prove to be the place to be when it comes to cannabis cultivation in the US.

Low labor costs;  lots of sunshine

Now Relevium is betting on Colombia, citing a standard offshoring benefit of lower labor costs to go with more sunshine at tropical latitudes to boost growth, which could also lower costs by making multiple crops per year possible.  While the export picture for hemp ingredients is at the moment clouded, the cost of production will surely be a factor in the market as it develops over the coming years.

“This is a major strategic step in the development of our Phyto therapeutic biopharma business,”​ said Aurelio Useche, CEO of Relevium Technologies.

LifeLine Pharma is a cannabis operation based in Cali.  According to Relevium’s announced of its Letter of Intent on the deal, the company will directly invest funds in the venture and issue stock for a total valuation of about $4 million.  LifeLine is said to be in the process of gaining licenses in medical marijuana and non psychoactive hemp cultivation.