Gabriella's Kitchen Secures Long-Term Supply of High Quality CBD Extract

Published: February 22, 2019

Gabriella's Kitchen Secures Long-Term Supply of High Quality CBD Extract

Gabriella’s Kitchen Inc., an innovative and leading-edge cannabis wellness company, has entered into a supply agreement to purchase cannabidiol (“CBD”) extract including full spectrum, high grade cannabidiol, distillate oil and isolate crystals from Xtract Xperts, the largest producer of hemp in the state of Oregon.

“As a wellness company, GABY determined a year and a half ago that we needed to incorporate hemp-derived CBD and other cannabinoids into our product strategy because of the powerful wellness properties associated with the plant,” said Margot Micallef, Founder & CEO of GABY. “We have been deeply immersed in research and product development since that time and sourcing high quality, reliable CBD is fundamental to our successful execution of this strategy.”

The demand for CBD and products containing CBD has dramatically expanded following removal of CBD from Schedule I of the Controlled Substances Act in the U.S. on December 11, 2018, under the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”). With rapidly increasing knowledge and awareness about its positive health impacts, mainstream consumers are increasingly seeking to realize the benefit of wellness properties associated with CBD and other cannabinoids derived from hemp. A December 2018 Hemp Business Journal article written by Sean Murphy and others, estimates that, in leading all hemp product categories, the hemp-derived CBD market will grow from a $390 million-dollar market in 2018, to a $1.3 billion market (3.3x) by 2022, representing a 27.2% 5-year CAGR.

On December 10, 2018, the day before the Farm Bill was signed into law, Bethany Gomez, Director of Research at the cannabis and CBD market research organization, Brightfield Group, was quoted in a Rolling Stone article -stating, “This is a watershed moment for CBD in the United States. With hemp and all of its derivatives officially removed from the Controlled Substances Act, CBD moves from a legal gray area into the light.” She continued, “…this shift will allow for CBD to make its way to the shelves of larger scale, mainstream distribution channels and pave the way for … mainstream consumer packaged goods companies in industries like drinks, beauty, pet, skin care and tobacco to develop CBD products and capitalize on this emerging industry.”

In a statement, Ms. Micallef agreed with Ms. Gomez saying, “GABY’s confidence in the explosive future potential of the CBD market led us to immediately recognize the importance of securing a supply of high-quality CBD to ensure we can successfully execute our strategy of developing new and desired products for consumers that incorporate hemp-derived CBD and other cannabinoids.”

“Quality control is the foundation of Xtract Xperts” said Cindy Wyant, CEO and Founder of Xtract Xperts. “All of our extractions are lab tested to ensure cannabinoid potency. We use a proprietary and innovative extraction process that protects the beneficial compounds of the hemp plant, namely, the terpenes, terpenoids, phytocannabinoids, and flavonoids – characteristics that we know are important to GABY and are what consumers are looking for in a high quality product.”

All CBD extracts from Xtract Xperts are derived from hemp (not marijuana). CBD extract is different from hemp seed oil and organic hemp oil, as these are derived from hemp seeds (not the resin) and do not contain cannabidiol – which is the compound in hemp which has been correlated with specific health benefits, including anxiety, pain, high blood pressure and epileptic seizures. In fact, in June of 2018 the U.S. Food and Drug Administration (“FDA”) approved the first pharmaceutical formulation of hemp-derived purified CBD for use in an anti-epileptic drug. This approval was an important signal and provided clear indication of the potential pharmacological benefits associated with CBD and its extracts.

In addition to Xtract Xperts, to further advance the Company’s strategy, GABY has actively secured numerous acquisitions and strategic partnership arrangements over the past six months with firms across the CBD value chain, including The Oil Plant Inc. (“TOP”) cannabis extractor and manufacturer; Sonoma Pacific Distribution (“Sonoma”), California’s premier independently-owned cannabis distribution and marketing company; and most recently, Eximius Coffee LLC (“Eximius”), a U.S. coffee importer whose products are sold in retail grocery stores throughout the U.S. GABY will continue to build out its innovative product, marketing, distribution and retail capabilities to further its objective of becoming a leading U.S.-focused, cannabis wellness company.

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