Surrey, BC — (June 22, 2015) — GLOBAL HEMP GROUP INC. (“GHG” or the Company”) (CSE: GHG / FRANKFURT: GHG / OTCQB: GBHPF) is pleased to announce that it has signed an Exclusive Supply Agreement with House of Hemp (HoH), its Strategic Partner in South Africa (SA). This is the next step in the Company’s evolving relationship with HoH and a significant step forward in the development of the Company’s business efforts in South Africa.
House of Hemp is a private company based in Johannesburg, South Africa, and is the first and only South African company to be awarded an exclusive permit from the Department of Agriculture and the Department of Health to legally cultivate and process hemp in the country, as part of a seven year pre-commercial trial (2009-2015).
As part of the Agreement, HoH has agreed to exclusively source from GHG all of its requirements for raw and processed hemp materials. HoH has recently begun wholesaling a number of food related hemp products in South Africa, which will initially require delivery of whole and dehulled hemp seed, along with hemp oil. An initial sample order from GHG of 0.8 metric tons of hulled seed is being shipped this month. Upon confirmation of quality acceptance, additional multi ton orders are expected every two months thereafter. As part of the initial sample order, GHG assisted in fulfilling an order for 5,000 metric tons of whole seed. With the signing of this Supply Agreement, all subsequent orders will now be originating from the Company.
Deepening the relationship with HoH will give the Company an opportunity to tap further into the premier hemp company in South Africa, as the hemp industry is about to open up to commercial production and distribution.
HoH plans to fully exploit the potential of industrial hemp by utilizing its seed for oil and nutritional supplements, the straw for fibre and hurd, and the flowers and leaves for CBD extraction. Seed processing for oil and cake is being undertaken first, using imported seed from GHG and local production from under HoH stewardship. The straw will be processed into chips to be used for building materials in the construction of affordable and sustainable hemp homes.
There are a number of additional business opportunities that House of Hemp is currently developing in South Africa, which Global Hemp will be involved in, upon completion of its 50% acquisition of HoH. The following are some of these opportunities:
- Development of New Varieties of Hemp Seed for South Africa – In conjunction with the Agricultural Research Council (ARC), two new varieties of hemp seed specific for fibre production, have been developed. These varieties are known as SAHemp1 & SAHemp2 and are co-owned by the HoH. In addition, the parties are launching another research program to develop new varieties with special focus for oils and CBD strains.
- Importation of Live Hemp Seed – HoH has been granted exclusive rights to import live hemp seed into the country. Negotiations are currently underway to extend this agreement for an additional five years.
- Cannabidiol (CBD) Extraction – HoH has been granted the permission to extract CBD from its current pre-commercial hemp production sites. This processing can be launched immediately with a minimum expenditure, using existing facilities and hemp supply from HoH’s pre-commercial trials
- Research on Medical Cannabis – The South African government, through the Department of Science and Technology, has asked HoH to co-coordinate research efforts on medical cannabis jointly with the University of Free State.
- Building Homes with Hemp Construction Materials – HoH has been invited by the Department of Housing Settlements to participate in the Reconstruction and Development Programme (RDP) to build a number of affordable and sustainable houses out of hemp building materials. These hemp homes are expected to qualify for carbon credits that could offset some of the cost of development.
- Fibres for Textile and Bio-composites – HoH is working with the Council for Industrial and Scientific Research (CSIR) doing research on the processing of hemp straw into fibres for the textile and the bio-composite industries.
- Agricultural Development Program – HoH has been in negotiation with the Department of Rural Development and Land Reform (DRDRL) to use hemp as a crop that will be central to a large agricultural development program. The program entails land grants in exchange for HoH introducing hemp to targeted farming communities, as well as training the farmers, providing expertise, and marketing their products.
- Pilot Program to Utilize Hemp Products for Food – The South African Department of Social Development has invited HoH and CSIR to present a pilot program to explore using hemp and other natural foods to bring nutritious foods to vulnerable elements of the rural population.
House of Hemp has been the coordinator of all these efforts on behalf of the private sector and has funded and/or found support for these research efforts. This shows the extent of the trust enjoyed by HoH in South African government circles, and various areas of collaboration.
Other notable details about the South African hemp market:
- South Africa is on the verge of legalizing commercial hemp production and indications are that extraction of its non psychotropic components will be permitted.
- HoH is working with the National Agricultural Marketing Council (NAMC) in the preparation of a study, which will be submitted to the government in 2015 for their final decision regarding the full legalization of hemp cultivation.
- SA has a sizeable wealthy population that can afford the nutraceuticals derived from hemp seed.
- SA has a very progressive policy to redress the injustices of apartheid through a number of programs such as the Reconstruction and Development Program (RDP) where low cost houses are distributed to the poor. HoH will participate in these programs to build hemp houses and provide a source of jobs in rural communities.
- SA offers market opportunities that are not found elsewhere in the world. HoH is well positioned to tap into these opportunities through the confidence it has generated in developing the hemp industry in South Africa.
“The Company is excited about our expanded and continuing relationship with House of Hemp, and the ongoing opportunities for hemp in South Africa”, said Charles Larsen, President of Global Hemp Group. “Dr. Kunene is single handedly developing the hemp and cannabis industries in South Africa. We are proud to call her our partner and privileged to have this opportunity to work with House of Hemp”.
About Global Hemp Group Inc.
Global Hemp Group (“GHG”) is a publicly traded company founded in 2012, headquartered in British Columbia, Canada with base operations in Southern California, USA and having a strategic partnership in South Africa. The Company is focused on acquiring and/or joint venturing with companies across all sectors of the hemp and cannabis industries in an effort to build a “soil-to-shelf” portfolio of complementary companies that will enable GHG to capture cash flow, revenues and value from its acquisitions and establish a far greater collective valuation than GHG or the individual companies would have on their own.
On behalf of the Board of Directors
President & CEO
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Forward Looking Statements – Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Global Hemp Group Holdings Inc., including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
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