Empower Clinics Inc. has entered into a non-binding term sheet with Aibeida LifeTech Ltd. with a view to opening a fully functioning, hemp-based CBD extraction facility in greater Portland, Ore. sometime during the second quarter of 2019.
As per the agreement, Empower will pay Aibeida US$1 million in cash at closing and a US$250,000 performance holdback, notes a statement from Empower, an owner/operator of a network of physician-staffed clinics that are focused on helping patients to improve and protect their health through innovative uses of medical cannabis.
Further, Empower will issue Aibeida common shares of Empower having an aggregate value of US$1 million at closing, and additional shares having an aggregate value of US$1 million, which will vest in quarterly instalments over 36 months following closing.
In exchange, Aibeida has agreed to “sell and license specialized extraction equipment to Empower; provide facility build-out and set-up services; complete licensing and permitting requirements; offer equipment set-up, testing and activation; and provide ongoing facility management and maintenance for the first Empower CBD extraction facility,” the statement adds.
Empower’s first extraction system—located near Mt. Hood, Ore., which is about 40 minutes southeast of Portland airport and in close proximity to numerous hemp farms—is set to have the capacity to produce 6,000 kg of extracted product per year.
“The leased facility is expected to be 5,000 sq. ft. to support the first extraction production lines with the potential to house up to four of the same production systems at industrial scale,” the company reports. The facility is “built to specification internally to optimize CBD extraction production and expected to use 200 kg of hemp biomass per day to produce 20 kg of CBD extract,” states the press release.
Empower notes that it intends to allocate 1,000 sq. ft. for CBD product manufacturing for wholesale and to produce its own Sollievo product lines and that of Sun Valley Clinics.
The CBD extraction facility is “expected to provide Empower with vertical integration into the CBD supply chain, producing isolates, distillates and crude oil that have shown successful third-party test results in the initial test facility,” the press release notes.
Shuang Xie, PhD., Aibeida’s director and chief scientist in Canada, will oversee and manage the Empower CBD extraction facility.
Aibeida’s extraction technology incorporates high performance liquid chromatography which is believed to have stronger separation capability, higher extraction efficiency and lower processing costs when compared to traditional extraction techniques, the statement notes. “Aibeida’s technology has demonstrated the ability to produce full-spectrum hemp oil, 99 percent crystallized CBD isolates and separation of individual cannabinoids from hemp,” reports Xie.
“Achieving vertical integration has been an objective of mine from the outset as we attempt to connect the science behind hemp-derived CBD based therapies and the efficacy of physician-recommended treatment options made available through our clinic network, online or through retail partnerships,” adds Empower CEO Steven McAuley.
Completion of the proposed transaction will be subject to various conditions, including entry into a definitive agreement, completion of due diligence, and receipt of all required shareholder, board of directors, third party and regulatory approvals, including approval of the Canadian Securities Exchange.
“Closing will also be conditional on Empower completing a debt or equity financing to raise minimum gross proceeds of US$3 million,” notes the statement, adding that closing is expected to occur on or about Mar. 30, 2019.
(Rights of the text go to 420intel.com. Image is from shutterstock)