HTC Extraction Systems (TSX.V: HTC) Acquisition Augments Company’s Output Capability

• HTC acquires California-based Kase Farma Inc.
• HTC Extraction Systems announces tolling contracts, project progress and more
• Hemp-derived CBD market set to grow to $22 billion by 2022

With the acquisition of a company engaged in the extraction, purification and wholesale distribution of hemp-based cannabinoid extracts, HTC Extraction Systems (TSX.V: HTC) has bolstered its output capability and institutional knowledge considerably. The acquired entity – Kase Farma Inc. of Ceres, California – is currently expanding and upgrading its extraction, refining and processing operations. Kase Farma will enter into an intellectual property licensing agreement with Starling Brands Inc., the vendor. Under this licensing agreement HTC’s Canadian facility will also be the recipient of this intellectual property (http://ibn.fm/0WcJv).

The demand for cannabinoids is climbing. But since cannabis remains a Schedule I drug under the Controlled Substances Act of 1970, extraction of cannabinoids from cannabis poses serious legal risks. This may soon change. Several bills have been tabled in Congress to move cannabis to Schedule III, most memorably the Marijuana 1-to-3 Act. In the meantime, extracting cannabinoids from hemp – HTC Extraction Systems’ forte – avoids running afoul of federal law.

Kase Farma is active in the cultivation of hemp as well as the formulation and extraction of cannabinoids from hemp; the company is also licensed in the State of California to perform activities in those areas. At present, the company operates out of a 22,000-square-foot manufacturing facility and is currently implementing a scaled-up, high-throughput extraction facility that will utilize identity-preserved-grown (IPGrowTM), hemp-based cannabinoid biomass. IPGrowTM, according to the U.S. Department of Agriculture definition, preserves the integrity of identifying information “to ensure what is grown in the field is what the buyer receives.” Kase has partnered with a number of highly regarded IPGrowers that will supply the high-quality biomass required for the therapeutic, wellness and recreational product lines.

Kase Farma strives to deliver health and wellness benefits of CBD, CBG, CBN and other cannabinoids via the production of high-quality, premium hemp products through best of class methods while sustaining an unrelenting commitment to people, community and the environment. Kase Farma will also provide white-label manufacturing for other cannabinoid suppliers.

Demand for cannabinoids is growing rapidly. Industry analyst Brightfield Group projects the hemp-derived CBD (cannabidiol) market will grow to $22 billion by 2022 (http://ibn.fm/a6VYL). HTC is poised to benefit from the booming market. The company’s extraction technology — the Delta Purification system — uses hemp, most of the legal restrictions on which were removed by the last farm bill. Now hemp can be grown freely with the proper license, however, hemp-derived products can be transported across state lines for commercial or other purposes, and hemp-derived products may be sold provided these activities are done in a manner consistent with the law.

In October, HTC announced the completion of the 19,000-square-foot facility that will house its quality-assurance testing and product-development laboratories as well as its extraction and formulation-processing operations. The facility is located 17 miles southeast of Regina, Saskatchewan, at HTC’s Port Lajord location. The facility is in the final stages of required modifications to qualify as GMP Euro compliant and after completion will be one of the highest-performance and highest-product-quality extraction and refining facilities in Canada. In addition, HTC has completed the construction of its 27,000-square-foot, hemp-biomass processing and storage building, to be utilized for the storing of extraction-ready biomass (http://ibn.fm/YNScf).

For more information, visit the company’s website at www.HTCExtraction.com

NOTE TO INVESTORS: The latest news and updates relating to HTC are available in the company’s newsroom at http://ibn.fm/HTC

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