Dear Shareholders and Debenture Holders,
It is with mixed emotions that I report our 2020 harvest is in full swing at our farm in Southern Oregon. We have been extremely fortunate to have avoided the treacherous fires that have consumed many neighboring properties and devastated countless lives along the way. For those affected, we offer our sincerest condolences and wish a speedy recovery to better times ahead. On the positive side of things, our growing conditions this year have been nothing short of amazing. The weather has been perfect, and the growth of our plants has surprised even our most seasoned farmers. At time of harvest, many plants exceeded our best expectations in the size of the flower and height – a sight you truly have to experience in person to appreciate. The team on the ground in Medford is full swing harvesting, bucking, curing, trimming. Our CBD and CBG top flower will be available for sale by the end of this week.
In recent news, hemp industry observers say “smokable hemp is one of the fastest- growing and most lucrative segments in the nascent hemp and CBD industry, with expectations that the market will experience fivefold growth in the next five years”. The smokable-hemp segment is so new, most of the data available is focused on smokable-hemp flower, pre-rolls and cigarettes styles, specifically for CBD versus other up-and-coming cannabinoids such as CBG. We were able to identify this trend early through the experience of monetizing last year’s crop, seeing considerable demand for our CBG flower. This year we focused our planting and harvesting techniques to yield the highest quality flower from both the CBG and CBD plants to align with market trends. For 2020, Nielsen projects sales in the smokable-hemp market to reach between $70 million and $80 million. By 2025 Nielsen expects the smokable-hemp market to reach $300 million to $400 million, representing roughly 1-2% of the potential $17 billion hemp-derived CBD consumer products category.
In addition to focusing on increasing flower yields and quality, Hemptown has created two new categories of products to achieve higher margins on the sale of our flower versus bulk wholesale. Later this month we will be launching our new line of hemp smokables. Hemptown’s smokables will include a full lineup of premium smokable flower in multiple strains, hemp pre-rolls, and hemp cigarettes. The new product line will be anchored by a 20 pack of “Hemp Stix”, our premium hemp cigarettes with less than 0.3%-THC and zero nicotine, made with 100% pure hemp right off our farm in Oregon. Our proprietary, premium blend of CBG and CBD will be available in original blend, alongside a wide range of flavors, starting with Pineapple Express. The Hemp Stix will be flavor-enhanced with a first of its kind, proprietary filter flavoring technology from our manufacturing partners at Hempacco. Our Hemp Stix products are all natural, made with 100% Hemptown grown hemp.
The first packs of Hemptown hemp cigarettes started rolling off the line this past Monday and will be available for sale on www.hemptownusa.com in the coming weeks. We are happy to offer a discount to Hemptown shareholders on all new products once sales go live. To view more images and video of the Hemptown hemp cigarettes rolling off the line click here.
Alongside Hemptown smokables, our Twisted Rogue brand will be added to our product lineup for sale on www.hemptownusa.com. Aptly named Twisted Rogue, after the Rogue River Valley of Southern Oregon where the Hemptown Ranch is located, these products are currently marketed through smoke shops and C stores and have received such a positive response we will be adding them to our permanent product lineup. Over the coming weeks we will be making a considerable investment into marketing efforts to garner even more interest in this new category of products. We believe there is no dominant brand yet established in the hemp smokable market and Hemptown is perfectly positioned to be a category leader with our “farm to consumer” brand.
As a part of the launch of our Hemptown smokable line we are looking for shareholder input and feedback on the branding and positioning of these products. Please click below to fill out the survey and stand a chance to win a Hemptown swag bag.
Sales and Operations
We are also very proud to announce that Hemptown has hired Derek Du Chesne as our Chief Commercial Officer (CCO), a hemp industry pioneer who has been a key to the inception and growth of some of the nascent industries most recognizable names. Mr. Du Chesne is a brand management professional who has a proven track record of success through concept, development, and launch, building iconic brands by orchestrating successful campaign deployment on both a global and regional scale. Before joining Hemptown, Derek was responsible for over $50 million in revenue and securing $40 million in funding at his previous company EcoGen Laboratories in 2019. Prior to that Mr. Du Chesne was the CEO/Co-Founder of Healing Ventures, a marketing & supply chain firm that helped bring several leading Cannabis brands to market. He is a strategic leader who has repeatedly led teams to maximize performance in order to achieve stakeholders’ goals on time and in full.
At Kirkman Group last week we announced the transition of our Reno, Nevada based fulfillment center to our primary facility in Lake Oswego, OR. With the closing of Reno, we will be able to better serve our customers, maintaining the highest level of service and quality under one roof in Lake Oswego. The consolidation of operations is key step in enabling Kirkman to close out 2020 turning a profit with positive cash flow.
Progress Towards Liquidity Event
The team is also hard at work making progress towards the proposed liquidity event announced last month. We announced further details related to the transaction, including the proposed board of directors post-close of the transaction earlier today. We will be sure to keep shareholders abreast of the latest news. Eric Gripentrog and myself also presented at the Canaccord Genuity US Cannabis symposium last week, September 30th, 2020, speaking to a number of family offices and institutions engaged in the cannabis and hemp market. Eric Gripentrog will also be presenting to over 100 family offices tomorrow, October 6th, in a webinar through the Family Office Network. To register for the presentation click here.
President, Director and Co-Founder
About Hemptown Organics Corp.
Hemptown is diversified, industry leading cannabinoid company delivering a diverse product offering acrossthe value chain, in multiple sales channels, to meet the growing global demand for cannabinoid-based products. State of the art cultivation in Oregon’s Rogue Valley, FDA-licensed and cGMP certified product manufacturing, and a strong leadership team with Fortune 500 experience, including Kellogg’s, Nike and Intel, are the pillars for Hemptown’s growth model as the Company pushes into the consumer-packaged goods sectors with top quality white label and branded product lines for the consumer market. For more information, visit www.hemptownusa.com.
Hemptown Investor Relations
Hemptown Sales and General Inquires
Disclaimer for Forward-Looking Statements
This news release contains forward-looking statements that involve various risks and uncertainties regarding future events. Such forward-looking statements are based on current expectations of management, involve a number of risks and uncertainties, and are not guarantees of future performance. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements in this news release include statements regarding the proposed acquisition of Hempacco and Pacifica Premiums, and the proposed Offering. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors that may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include general market conditions, significant business, competitive, political and social risks and other factors beyond the control of the Company. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Because Hemptown is not a reporting issuer in any jurisdiction in Canada, all of the securities issued in the proposed Offering will be subject to an indefinite hold period under applicable securities laws. In addition, none of these securities will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none may be offered or sold in the United States absent registration or an applicable exemption from the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities, in any state where such offer, solicitation or sale would be unlawful.