Colorado-based CBD maker Folium Biosciences has put its CBD extraction and purification facility up for sale before it was ever used.
The property listing, by Hilco Commercial Industrial, LLC, a Chicago real estate company, said the covid-19 pandemic caused Folium to cancel the facility’s opening, and indicates the company is facing business challenges.
Folium is a bulk and wholesale supplier of hemp-derived CBD oil, edibles, “cosmeceuticals” and CBD for animals.
The idle factory “has the capability to supply enough CBD oil to meet the increasingly exorbitant market demands,” said Steve Madura, senior vice president at Hilco, echoing the hype about CBD that led to a massive crash in the sector. The crash, which started in 2019, has left hemp flower biomass backed up and losing value in farm buildings across the U.S., as wildly inflated sales projections failed to materialize, clogging the supply chain and leading to prices that dropped by as much as 90%.
Crash in Colorado
Meanwhile, many Colorado farmers have abandoned hemp. The state harvested just 3,100 acres after roughly 70% of hemp fields planted in 2021 were apparently not harvested last year, according to an inaugural hemp crop report released early this year by the United States Department of Agriculture’s National Agricultural Statistical Service.
The commercial real estate offer said Folium’s Colorado facility, which sits on a six-acre parcel in Pueblo West, Colo. near the state’s I-25 corridor in a “county enterprise zone,” can turn out a maximum 15,000 kilos (~33,000 lbs) of oil per month for full and broad-spectrum CBD products.
What’s for sale
In a 2019 announcement, Folium said it had purchased FeyeCon, a Dutch maker of extraction and purification equipment and installed its CO2 supercritical extraction technology in the Colorado factory, which was planned to process 800,000 lbs. of biomass monthly.
Folium renovated the facility, originally built in 2014, in 2019 and 2020. According to the Hilco prospectus, 62% of the complex is dedicated to cold storage space, and the building features “premium” office space with an industrial kitchen, mezzanine catwalks, a conference room and an employee cafeteria.
Hilco’s listing has a deadline of Nov. 17 for bids on the factory,
Eyes on UK
Like many struggling CBD companies, Folium appears to be banking on the UK, where a $1 billion CBD market is projected, as part of the solution to its business troubles. Folium is associated with 110 products that passed the first stage of the Food Standards Agency’s (FSA) three-stage review for getting CBD products market-approved. But competition for access to the UK consumer is stiff, with roughly 450 companies having submitted more than 12,000 individual products under the FSA’s rules for new or “novel” foods. Equally challenging, the FSA approval process has been troubled and slow to unfold. Many CBD companies have warned they could fail if the agency’s CBD review is unusually drawn out. The 12,000 preliminarily approved products continue to await THC toxicology and other technical checks to make certain they are safe for human consumption.