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The new hemp industry is attracting some powerhouse players in agriculture with deep pockets. But, will it work?

Whether AgTech Scientific/ColorPoint venture is fundamentally sounds is another story. A great deal depends on the end market.

Before we gave the analysis using our developing algorithm, let us look at the underlying dynamics. See if you figure out if the end game leads to profitability.

Today's AgTech Scientific/ColorPoint story.

After testing indoor production in the 2018 growing season, the companies agreed to merge this year and convert the full 2-million-square-foot Paris greenhouse operation to hemp production and processing. The operation planted about 5 million high-yield CBD hemp clones on more than 1,800 acres of outdoor fields in central Kentucky, all within 15 miles of the greenhouse.

AgTech Scientific plans to roll out CBD formulations for the food and beverage industry and its own proprietary brands. The company currently is using a 30,000-square-foot extraction facility, which it plans to close upon completion of the first phase of a new 50,000-square-foot facility by the end of 2019. The new facility includes laboratories, extraction, product manufacturing and new product development. The first phase will offer 4,000 pounds per day of biomass extraction capacity, increasing to 14,000 pounds per day in 2020.


FDA will not allow any CBD products to be sold that make health claims unless costly three phase clinical trials are completed and the FDA application has been approved for human consumption. It is fact that one complete test cycle and certification within the FDA protocol would cost $20 million as a conservative "low-ball" expense. Therefore, next years' market for general consumer CBD use is dead. Anyone in this market will fail.

AgTech Scientific projects its extraction facility will process up to 2,250 metric tons of biomass per year and 11,000 kilograms (24,251 pounds) of pure CBD isolate per month by 2020. The company has applied for Good Manufacturing Practice (GMP) certification and ISO 9001 certification, which is expected by the third quarter of 2020.

That doesn't mean it will be profitable.


Making CBD oil is easy -- click for a home kitchen sampler.

Fact: All of these edible carrier oils have a short shelf life. You can’t make huge batches of CBD product in this method. While this is a good method of using CBD oil for personal use, storage is a major concern. Besides, CBD oil extracted in this method is only good as tinctures and sprays to be consumed, sprayed under tongue or applied topically, not to be vaped or smoked.

But extremely difficult for zero THC CBD isotopes.

Fact: Using Super- or Sub-Critical CO2: This technique is the safest and the cleanest of all methods of extraction. This method is scientific; uses extremely high or low temperatures and highly controlled environment to preserve and isolate the cannabinoids. This way, the integrity and the purity of the cannabinoids are duly maintained. Besides, no trace of the green chlorophyll remains in the end product, giving you more clean- and pure-tasting CBD oil. It basically provides you with the highest amount of pure and potent CBD.

However, this method has a few drawbacks. This approach isn’t suitable for most small-scale producers. It is an expensive and complicated technique and requires more technically-complicated equipment. The process takes forever for technicians to perfect. A huge investment, both financial and of time, are needed to be before a technician can find the perfect process. We don't believe that AgTech Scientific has perfected the process.

Fact: Moreover, we mentioned high temperatures being used in this process. Such high temperatures can completely destroy the terpenes in the cannabis plants. Each strain of cannabis has its own unique flavor and aroma because of these terpenes. Destroying the terpenes means that the end result loses not only its special taste but also their unique therapeutic benefits (during the decarboxylation process). Besides, terpenes also play the role of enhancing the effects of the cannabinoids present in the CBD oil.

Therefore, the statement "AgTech Scientific projects its extraction facility will process up to 2,250 metric tons of biomass per year and 11,000 kilograms (24,251 pounds) of pure CBD isolate per month by 2020" will never happen. The "pure CBD" made by AgTech Scientific will fail medicinal test grades and the associated isotopes will be unusable.

AgTech Scientific statements are misleading - they have not fully tested or produced a sustainable medical grade, pure CBD product.

At Northridge Corporation, we believe to have a proprietary "final process" that will not compromise terpenes -- an important factor in pharmaceutical testing.

History of the AgTech Scientific/ColorPoint partnership.

Kentucky greenhouse operation ColorPoint LLC announced May 30, 2019, its merger with AgTech Scientific after deciding to become a hemp-only company. The conjoined companies will become a fully vertically integrated hemp operation. The two businesses began working together in 2017. They collaborated on a beta test of indoor hemp growth in 2018, then partnered to produce outdoor clones in 2019. The successful 2018 beta test resulted in a supply agreement between ColorPoint and AgTech, which included agricultural processing, clones and an indoor grow during summer season, according to ColorPoint.

After a successful courtship, the two companies merged operations. The greenhouse includes 1,837,847 sq. ft. of indoor growing space, with 145,182 sq. ft. allotted to production and shipping; an ebb and flood floor system and operable roof; an agricultural processing center with the capacity to dry, strip and mill more than 100,000 hemp plants daily; digital root-to-shelf tracking; year-round, 24/7 production; more than 100 tractor trailers, 113 full-time employees and more than 340 employees during peak season. Surrounding facilities also provide outdoor farming capabilities, extraction and manufacturing.

ColorPoint broke ground on a 50,000-sq.-ft. extraction and manufacturing facility in October 2018 in Bourbon County, Kentucky. The facility stretches 10 acres and is located about 15 minutes from the greenhouse complex. The extraction facility is funded partially by community, state and local grants. It is projected to be operational in August 2019. “The announcement today is the big next step for the hemp industry,” added Jessica Scott, AgTech’s director of communications. “AgTech and ColorPoint are committed to their people, appreciated by everyone, especially farmers. I have been in the industry for numerous years and I am more excited about the future today than ever before.”

AgTech Scientific was established in 2015 as a pet food research project with an emphasis on dosage and delivery of CBD to pets and equine. It went on to vertically integrate, eventually building its own 50,000-sq.-ft. factory with Gray Construction in 2019, including laboratories, extraction, distillation, isolation, formulation and product manufacturing capabilities to replace its previous facility. Pet and equine CBD products, ranging from treats, edibles and beverages to topical lotions, capsules, and tinctures, are expected to begin human trials in 2019 and be on the market by 2020.


A $16.3 million investment doesn't mean you'll make a profit. Add another $10 million to keep the "hope" alive. At Northridge, our plan is to go slow and easy. We don't have big bucks and every move we make is based on what the hemp industry will be in three years. Spending big money without a level playing field is like p------g in the wind. Not our style. Maybe the others guys should review our Business Model?

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