A fully integrated production chain could provide Xiang Hu Hemp with a unique advantage in distillate oil commercialization.


Two members of the CNOOC extraction team hold dried biomass (left) and crude oil (right) in front of the company's Vitalis R-200 CO2 extractor careddi.com/brc/66.htm.
VANCOUVER, British Columbia, Jan. 29, 2021 (GLOBE NEWSWIRE) -- Christina Lake Cannabis Corp. (the "Company" or "CLC" or "Christina Lake Cannabis") (CSE:CLC) ( FRANKFURT: CLB) is pleased to announce that one of the Company's cannabis distillate oils has been certified as having a tetrahydrocannabinol ("THC") concentration of 90.3%, based on a Certificate of Analysis issued by a Health Canada accredited testing laboratory on January 15, 2021. The Company recently announced its intention to focus primarily on the production of cannabis distillate from the 32,500 kg/71,650 lbs of naturally sun-grown biomass harvested in 2020. Based on the market demand for distillate, which typically has a THC concentration of over 90%, the Company believes it is uniquely positioned to be a competitive supplier of distillate in the cannabis market. In addition, the company is planning to blend cannabis-derived terpenes into its distillate, a combination that has only recently been requested by the Canadian cannabis industry, despite being relatively common in other markets.

As a fully integrated cannabis oil producer, the company is well positioned in the Canadian cannabis industry because of its control and visibility into the production chain. with a genetic database of over 100 proprietary cannabis strains and a total inventory of over 600,000 seeds, CLC began outdoor cultivation last spring at its Christina Lake, B.C. facility, with outdoor growing area of over 950,000 square feet/88,258 square meters. After harvesting and processing the crop, the company uses a Vitalis R-200 CO2 extractor to extract oil from the dried biomass. This year, the company has successfully produced commercial quantities of winter cannabis oil with unique terpene profiles that are marketable in cannabis 2.0 recreational products for adult consumers (e.g., smoked, edible, topical), as well as medicinal products.
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In CLC's January 13, 2021 press release, it was announced that the Company began production of ultra-high potency cannabis distillate and that samples are currently being evaluated by an independent third party for THC levels and other metrics. Distilled oils are not typically used as stand-alone products, but rather as an ingredient in products that can be enhanced with the addition of concentrated THC (e.g., food and beverages, personal care, cosmetics). While the ability to produce cannabis distillate is not unique in and of itself, the Company, as a fully integrated producer, can benefit from several advantages that can reduce risk, achieve above-average margins, and enhance oversight.

Raw material costs. Growing cannabis naturally outdoors using sunlight is significantly less expensive than growing it in a greenhouse or indoors. Considering the percentage of dry biomass required per milliliter of cannabis oil, even small differences in biomass costs can have a significant impact on the profitability of cannabis extract producers.

Robust supply. Because the exact yield of distillate oil from dry biomass is not always known, cannabis extract producers are often at risk of supply depletion if yields are lower than expected. With the Company's first harvest of 32,500 kg/71,650 lbs of biomass, CLC has an adequate supply of raw material to address this risk without a significant impact on profitability.

Extraction Costs. Extraction is a function typically outsourced by cannabis producers and is often more costly than in-house extraction. The Company owns the Vitalis R-200 CO2 extractor and all ancillary equipment, and has extraction personnel. As a result, the Company's relatively low extraction costs could prove advantageous in reducing the net cost of producing cannabis distillate oil at CLC.

Internal Visibility. Another drawback of outsourcing cannabis extraction to a third party is the lack of continuous visibility into the process. Observing every step of the process, from initial extraction to final distillation, is critical to ensuring a consistent, high-quality finished product, especially when controlling for operational variables and the unique attributes of a particular strain.CLC's extraction workflow is designed to gather insight and analyze it in depth.

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