California Gold Mining has completed the purchase of a private 82.42-acre contiguous parcel of agricultural farm land in Kendall County, Illinois and has commenced outdoor cultivation of high-CBD industrial hemp biomass on approximately 40 acres.
California Gold’s President and CEO, Vishal Gupta stated, “The acquisition of the Grove Road Farm provides California Gold with an opportunity to take advantage of the outdoor cultivation season this year, in addition to the development of the Company’s first greenhouse for industrial hemp seed propagation scheduled for completion in Q3 2019. The close proximity of our Chicago-based cultivation consultants Delta Valley Hemp, highly fertile soil, access to abundant water, expansive network of paved roads, proximity to three-phase power, and locally available skilled farming labour, make the Grove Road Farm an ideal launching pad for the Company’s industrial hemp division. The field has been successfully planted and harvest is anticipated in late-September. We expect revenue realization in October 2019.”
Mr. Gupta went on to say in respect of the Company’s mining exploration activities, “With the recent uptick in the price of gold, there has been an increase in investor interest in the precious metals sector. We are keeping a close eye on the junior gold space and hope to re-commence drilling at the Queen Specimen mineralized zone on our Fremont property in Mariposa County, California before year-end. We entered the high-CBD industrial hemp cultivation space with the primary objective of potentially using positive cash flow from our hemp operations to fund future exploration and development of our gold asset. We endeavour to achieve that objective in the coming months.”
Details of Outdoor Cultivation Operation
The Company has already secured its industrial hemp cultivation license for the Grove Road Farm from the Illinois Department of Agriculture, Bureau of Medicinal Plants. The license needs to be renewed on an annual basis.
Once the hemp cultivation license was secured from the State of Illinois, 130,000 feminized industrial hemp plantlets, with demonstrated high-CBD (10% - 20%) and low-THC (less than 0.30%) concentration, were purchased in California and transported to a rented greenhouse near the Grove Road Farm. Concurrently, the Company purchased a variety of farm equipment, including a trans-planter, tractor, power harrow, pick-up truck and plasticulture tools. Over the past two weeks, the entire 130,000 plantlets were successfully planted on approximately 40 acres of the Grove Road Farm.
Management expects the harvest to take place in late September, with a projected yield of 100,000 - 130,000 pounds of high-CBD content flower biomass.
The Company is currently negotiating “toll-processing” contracts with third-party isolation facility operators. Under a “toll-processing” scenario, the Company would deliver its harvested biomass to be processed into CBD isolate by paying a fixed fee per pound to the operator. The revenue generated from the sale of CBD isolate is expected to be several times greater than revenue generated solely from the sale of unprocessed biomass.
Details on isolation parameters and projected revenue from the sale of CBD isolate will be provided once a toll-processing contract has been approved by the Company’s Board of Directors.
The farm has an average corn yield of over 160 bushels per acre owing to its extremely fertile soil, hence minimal soil remediation was required in preparation for the planting of the Company’s industrial hemp crop. The farm is laser-leveled and pattern-tiled through its entirety, which makes it much easier to work on and prevents standing water following heavy rainfall.
According to the company, the property has ready availability of three-phase power, water for irrigation and skilled farming labour. It is located at the intersection of two major roads.
Initial Greenhouse Re-Located to Illinois
Due to the delay in the roll-out of industrial hemp registration, sampling and testing protocols in the State of California, the Company’s Board of Directors approved the relocation of CGM’s initial greenhouse from the Fremont property in California to the newly-purchased Grove Road Farm in Illinois. This relocation will result in significant savings in operating costs, as Delta Valley Hemp will manage both the greenhouse seed operation and the outdoor biomass operation on the Grove Road Farm simultaneously, instead of managing the two operations in separate jurisdictions.
Additionally, since the Grove Road Farm is located in a rural agriculture-exempt region of Illinois, there is no requirement for a building permit to construct a greenhouse on this property, thereby shortening the timeframe for construction and build-out.
The Company plans to use the 27,000 sq. ft. greenhouse for propagation of entirely feminized, low-THC, high-CBD industrial hemp seed with stable genetics. The greenhouse is expected to be operational towards the end of Q3 2019. The first seed cycle is expected to be complete by the end of the year.