Halo Collective Inc.’s (“Halo” or the “Company“) (NEO: HALO) (OTCQX: HCANF) (Germany: A9KN) wholly-owned subsidiary Bophelo Bioscience & Wellness (Pty) Ltd. (“Bophelo“) is partnering with OG DNA Genetics Inc. (“DNA Genetics” or “DNA“) to grow premium California-style cannabis in Lesotho. Bopehlo operates a 200-hectare cannabis cultivation site near Mafeteng, the first Special Economic Zone (“SEZ”) in Lesotho, Africa.1 DNA Genetics is one of the world’s leading creators of high-quality cannabis seeds, whose strains consistently contain high cannabinoid and terpene concentrations. Bophelo and DNA entered a seed purchase agreement giving Bophelo exclusive rights to develop new and existing strains of DNA medical cannabis in Lesotho for export worldwide.
Bophelo finalized the summer harvest with more than 400,000 grams of sellable flower. Despite difficult growing conditions this season due to eight weeks of unusual weather, strong results were achieved with eight strains providing over 20% of THC A in line with the highest quality sun-grown cannabis found in Oregon and California.
Current test results from ISO laboratory testing are shown below:
OG DNA Holy Grail (1)
Blue Berry Haze
Mother Load Kush
OG DNA Chocolope (1)
This marks a significant milestone in quality, as 20% and higher is the desired standard in most medical markets. Strains above 25% are considered the highest quality for natural sun-grown cannabis. Additional strains await test results with the anticipation that more strains that will test over 20%. Each of these strains has been selected as a “Production Strain” and will be a large section of our spring planting beginning in October.
The success of the DNA strains in the Lesotho environment has yielded high quality cannabis that would be expected to sell at a premium price. The DNA Genetics team plans to visit Bophelo’s cultivation site in late June or early July to establish more unique strains potentially by crossing local genetics to make a new class of African-California cannabis strains as part of the Halo and Bophelo partnership.
Aaron Yarkoni, Co-Founder of DNA Genetics said, “We’re excited about all the progress we have made in Africa with Halo. We have grown all over the world, and this is the first time I have seen both the Prime Minister with his cabinet visit the site. It’s an honor to participate in creating a Special Economic Zone, creating jobs, and most of all, providing our highest quality cannabis strain varieties to people all over the world. The team in Lesotho has been doing an incredible job with our genetics, and we’re proud to show the world what we’ve achieved. It’s been a great partnership.”
“The cannabis we are growing would be top-shelf sun-grown cannabis. Our cost of production is among the lowest in the world, and our quality is among the highest, as independent lab test results demonstrate. I am excited to scale this year and then next and start bringing strong revenue with high margins with the cannabis that all medicinal cannabis patients will demand,” said Kiran Sidhu, CEO and Co-Founder of Halo.
Bophelo continues to work on the export process in Lesotho and the import process in South Africa to allow independent third-party compliance product testing. The result will enable Bophelo to sell products abroad through third parties exporters and resellers.
Interested third parties have been identified, and Bophelo expects to make initial sample product sales abroad as soon as the protocols are firmly established. It is anticipated that these protocols will be completed by late July.
GACP Certification Targeted for June
With the outer 1.6 km of fence complete, work is now beginning on the inner fence. These two elements significantly increase the security of the site—a significant accomplishment. The inner fence should be completed by June. The ablutions continue to progress with the roof to be installed and inner finish work expected to be completed within four weeks. Proper curing, storage, and post-harvest processing facilities are the longest lead time items and can possibly be done in late June. The state-of-the-art security system and corporate headquarters are already finished.
Cravo Green Houses Starting to Arrive
Work has been completed to supply electricity sufficient to power 1 acre (0.4 hectares) of greenhouse space—a major accomplishment. Planning is in process to build out the electrical infrastructure in preparation to start foundation work, which is expected to be completed by the middle of July. Bophelo plans to use high-quality systems, including EPHOS® lighting systems.
Despite numerous delays due primarily to Covid-19, the first container of Cravo parts is expected to be on time and arrive in South Africa by the end of June. This shipment contains the foundation for the greenhouse. Plans to build out the drainage and foundation are being finalized with the expectation to pour concrete starting in late July and early August. The goal is to begin planting in this first greenhouse by October. Once this prototype proves successful, Bophelo plans to implement a total of 15 acres of Cravo Greenhouses by the middle of 2023, capable of producing up to 48 million grams of flower annually, which is expected to be one of the largest greenhouse complexes in the world.
Extraction Will Soon Be Up and Running
The 16 m2 extraction facility is almost complete, with initial extractions expected to begin in June. The first month of extraction will be focused on learning standard operating procedures to ensure safe extractions. Bophelo will utilize the “B” buds from its cultivation along with cannabis procured from other license holders. Shatter and oil will be produced for sale within Africa to additional medical licenses. If possible, the oil will be exported out of Africa as well.
Covid-19 Mitigation Strategy in Place
Management at Bophelo anticipated the possibility of a third wave of Covid-19 and prepared a contingency grow plan to allow the expansion of an additional two acres (0.8 hectares) of grow space. This would increase Bophelo’s conventional greenhouse space at a minimum from 0.7 acres (0.3 hectares) to 2.7 acres (1.1 hectares) even in the event of a total lockdown due to Covid-19. This canopy would be in addition to the planned Cravo Greenhouses. Bophelo expects to have at least 6 acres of canopy growing by May 2022, as much as Halo’s East Evan’s Creek Facility with equal or better quality but at a significantly lower cost and contributing to Halo’s gross margin .
“Covid had a significant impact on Bophelo’s ability to expand in 2021. We built the team and grew despite the challenges as well as learned some valuable lessons. We are a few weeks late on GACP certification but aim to be certified in July. We are well-positioned to continue growing and thriving at a fast pace,” said Andreas Met, Managing Director of Bophelo and Halo Co-Founder.