OTTAWA, Dec. 13, 2018 /CNW Telbec/ - As the U.S. comes closer to ending decades of hemp prohibition, LiveWell Canada Inc. ("LiveWell" or the "Company") (CSE: LVWL) and Vitality CBD Natural Health Products Inc. ("Vitality") move closer to becoming a fully integrated cannabidiol (CBD) leader.
On Wednesday, December 12, 2018, the U.S. Agricultural Improvement Act of 2018, also known as the 2018 Farm Bill, was passed by the U.S. Congress. The 2018 Farm Bill legalizes hemp and removes it from the Controlled Substances Act (CSA). CBD and other cannabinoid products extracted from hemp are also removed from the CSA. The bill must still be signed by President Trump, who has signalled support.
While individual states can impose their own restrictions on the sale of hemp products, the measure allows for interstate commerce. Further, with the removal of hemp from the CSA, legal commentators say the Drug Enforcement Administration would no longer be able to interfere in interstate commerce of hemp products. This would pave the way for federally regulated institutions such as banks, credit card companies and e-commerce platforms to conduct hemp business without barriers. The U.S. Food and Drug Administration (FDA) will continue to oversee ingestible and topical hemp products and has yet to weigh in with any binding statements.
According to the Brightfield Group, the North American market for hemp CBD could reach US$22 billion by 2022. LiveWell and Vitality will be well-positioned to capitalize on the emerging CBD market.
Following their binding letter of agreement to merge as announced on December 3, 2018, the combined companies (Merger Co) today announced that key executives and shareholders from both organizations have entered into Lock-Up Agreements in support of the Merger.
Holders of 60% of the common shares of Vitality and 29% of the common shares of LiveWell have agreed to exercise all rights in support of the Merger, including to vote in favour of the merger. This agreement continues until the earlier of the closing of the Merger or 6 months. The Merger is expected to close in March 2019.
"This is confirmation of our transformation to a global CBD life sciences company," said David Rendimonti, President and CEO of LiveWell Canada. "That this is occurring during this historic time in the United States, our most significant market, is not an accident. It is validation of a shared vision and strategy to bring alternative health and wellness products to consumers that deliver functional outcomes. We believe the hemp CBD market will be explosive," Mr. Rendimonti added.
The Merger Co. brings together strategically aligned U.S. and Canadian assets to create the first fully integrated CBD company: One of the largest hemp cultivation and CBD extraction operations in North America; research, product development and GMP manufacturing facilities; international sales networks; and experienced leadership.
Vitality is a privately-owned Canadian company and one of North America's largest cultivators and producers of bulk CBD isolates from hemp. In 2018, Vitality planted and harvested approximately 20,000 acres of industrial hemp, purposely planted for CBD production (approximately 19,000 in Montana across 33 farms and 1,000 acres at one farm in Alberta).
Vitality is currently producing CBD isolate in its facility at Eureka, Montana. Vitality also acquired additional production capacity in Las Cruces, New Mexico, where it plans to retrofit the existing production/extraction equipment. By the second half of 2019, Vitality's total production capacity of CBD products, at both plants, is anticipated to reach more than 3,000 kilograms per day. The products offered include CBD isolate, CBD distillate and CBD full-spectrum soft gels.
LiveWell is an innovative Canadian hemp and cannabis company focused on advanced research on CBD and other cannabinoids, as well as developing, marketing and distributing consumer health and wellness products. LiveWell is also a late-stage cannabis cultivation applicant for its facility based in Ottawa, Ontario. A Research and Innovation Centre is also planned for Litchfield, Québec, to further LiveWell's discovery in CBD and other cannabinoids.
LiveWell's team of researchers and scientists recently completed a seven-month study and major market report on CBD, published a white paper on CBD from Industrial Hemp, is working on CBD product formulations and partnering with other research entities. LiveWell has leadership experience from the pharmaceutical, engineering, consumer marketing, food and grocery industries, and commercial expertise in global markets.
In October 2018, LiveWell announced it was acquiring Acenzia Inc., a Windsor, Ont.-based developer and manufacturer of nutraceutical products for the health and wellness market. Acenzia specializes in patented therapeutics specific to particular medical conditions and personalized diagnostics. It has a manufacturing facility that is certified by Health Canada, is FDA registered and has NSF certifications for GMP, for Sport, and is USDA-Certified Organic. The acquisition is expected to close in the near future.