HTC Extraction Systems (TSX.V: HTC) Acquires California-based Kase Farma Inc. and Launches Tolling Contracts as Part of Strategic Initiatives

• HTC acquires California hemp-based extraction, formulation and refining operation of Kase Farma and completes tolling contracts
• HTC has finalized construction of two new hemp biomass processing and storage facilities, with extraction equipment set to arrive in December 2019
• Canada’s cannabis industry will total $3.7 billion by the end of 2020
• U.S. sales of hemp-based CBD products set to grow at a CAGR of 147 percent, reaching $22 billion by 2022

HTC Extraction Systems (TSX.V: HTC), a hemp-biomass extraction and formulation company, is well positioned to profit from the fast-growing hemp and CBD, CBG and CBN market, in light of recently announced strategic initiatives ranging from new tolling contracts to the completion of two facilities and the signing of a Share Purchase Agreement with Starling Brands Inc., acquiring Kase Farma Inc., in Ceres, California , a hemp-based extraction, formulation and refining operation.

Kase Farma is authorized to operate in the areas of hemp extraction, refining, formulation and distribution of CBD, CBG and CBN in the State of California. Kase Farma, will receive and commission equipment that is able to process and distill 12,000 lbs. per day of dried biomass at its “IPElite Extraction” operation in California. Kase Farma’s “IPElite Extraction” operations are part of the vendor-owned 22,000 square foot overall facility and will process 12,000 lbs. per day of dried biomass; which at an 8% CBD yield will have the capability of producing, 435,000 grams daily of CBD, delivering highest quality, saleable CBD to the wholesale market with gross revenue potential of approximately $1.4 million USD per day.

In October 2019, the company closed a bought deal private placement with gross proceeds of $10 million to finance 25 million units of the company (http://nnw.fm/txc9P). According to the company, most of the funds are to be used for the purchase of extraction, purification and refining equipment, and for general working capital purposes.

HTC is currently in late-stage negotiations with a 60,000-acre recognized Canadian farm leader who is a major IPGrow™ hemp biomass producer. HTC intends to enter into a tolling contract with the producer for the 2019, 2020, 2021 and beyond production crop years. The contract is anticipated to represent production from a single producer/biomass processor of approximately 4,300 acres from the 2019 crops, up to 25,000 acres for the 2020 and 2021 and beyond production crop years.

The company’s other strategic initiatives include tolling contracts, marketing and distribution agreement, extraction equipment purchasing, and project construction updates.

HTC has finalized the construction of its 27,000-square-foot hemp biomass processing and storage facility, which will be used to store extraction-ready biomass. The company has also completed a 19,000-square-foot facility that will house extraction and formulation processing, quality assurance testing, and product development laboratories at its Port Lajord location 17 miles southeast of Regina, Saskatchewan. The facility is going to be on par with the highest performance and quality standards for extraction and refining worldwide. The extraction equipment is scheduled to begin arriving in December 2019, with installation to follow.

HTC Extraction Systems has a highly optimistic outlook when it comes to the CBD, CBG and CBN cannabinoid extraction and formulation market expansion. The company reports major investments in the purchase of extraction, purification, and refining equipment.

These developments, paired with the company’s proprietary hemp biomass extraction technology that reduces operating costs while delivering superior results, will enable HTC Extraction Systems to profit from the buoyant Canadian cannabis industry, which will reach $3.7 billion by the end of 2020, more than double the $1.6 billion in 2019. CBD derivatives such as CBD-infused topicals, edibles, and vapes are expected to generate $900 million next year, largely due to new regulations allowing sales of the increasingly popular products (http://nnw.fm/psG4U).

U.S. sales of hemp-based CBD products are projected to reach $22 billion by 2022, up from $591 million in 2018. This is equivalent to a CAGR of 147 percent according to Brightfield Group research (http://nnw.fm/r0BW0).

HTC Extraction Systems is a hemp biomass extraction and formulation company and a developer of patented proprietary technologies designed for the extraction of biomass, gas and liquids, as well as the distillation and purification of ethanol and ethanol-based solvents used in extraction. Engineered to large-scale, HTC’s extraction and purification systems reduce operating costs and capital expenditures while simultaneously delivering superior performance through lowered energy usage and emissions, as well as improved quality of the final product.

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://nnw.fm/HTC

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