Colorado Company Raises $65M to Buy “Mountains Of Hemp” For CBD Production

Mile High Labs, a biotech company based out of Colorado was approved for a $65M loan that will finance the purchase of a “Mountain of Hemp”, citing the CEO’s own intentions. The company will use the loan to set-up massive extraction units in the South and East of Colorado that will be some of the state’s largest, and Mile High Labs is expected to extract millions of pounds worth of hemp on a yearly basis. The US CBD market is expected to grow by 700% in 2019.

CBD

This move marks yet another CBD company leveraging the power of vertical integration. We’ve already seen companies such as Next Green Wave, Inc. utilize this tactic to gain better control over the manufacturing process from seed to store shelves with great success. Not only does vertical integration improve quality, it can also drive down production costs and increase profits, something that companies such as Next Green Wave have already begun capitalizing on.

About Miles High Labs

Miles High Labs extracts hemp for CBD purposes. MHL does not grow hemp, but it uses mobile equipment to set-up extraction stations on existing hemp farms and creates the product on the spot. The company specializes in the production of medical CBD (Cannabidiol). This is an ingredient that accounts for over 40% of hemp extract. This ingredient is used to treat anxiety, cognition, movement disorders and pain.

Mile High Labs is based out of Boulder, Colorado but their flagship location is in Loveland, Colorado. The company started as a small-time facility in 2016, and went commercial for the first time in 2017. By the second half of the year, MHL already had already employed 17 full-time employees. MHL’s growth exploded promptly; and now it aims to become the largest CBD extraction company in the United States. The new loan will likely solidify their position as one of the most promising CBD companies in the country. They currently manufacture crude CBD oil, distillate and isolate. 

Specialized CBD Extraction Technology 

Mile High Labs specializes in the extraction of CBD oil. The company has its own extraction technology – a modular extraction facility they refer to as the “Mile High Monster” which they can deliver next to a hemp farm; and process up to 50 acres of hemp a day using the Monster. They keep the technology secret and do not sell or rent their extraction technology at the moment. 

Vision for the Future

The CEO of the company, Stephen Mueller, claimed they strive to create a long-term vision for the CBD industry that will include new scientific innovation and research. They use the highest quality equipment available to produce compliant, quality, and consistent product. He said they aspire to become the largest CBD extraction brand in the world.

The entire deal is financed by MGG capital, a private finance company which agreed to finance the entire $65M deal for the company. 

About MGG Capital 

MGG Capital had equally humble beginnings – it started as a capital firm with only $200 million in seed capital, and quickly grew into a large private lending firm that has now landed billions of dollars to companies in the United States. MGG Capital provides loans to high-growth companies and finances new projects. The financing group is part of a small team of private investors lead by Kevin Griffin, a man who personally provided finance in the extent of $3 billion to companies in the United States and the world. MGG Capital is part of McCourt Global, an international investment firm. 

Miles High Labs Funding History 

This is not the first time Mile High Labs has received funding – earlier this year, the company received a round of $35M in Series-A funding, and this funding came from unknown and private investors who saw a benefit in investing in the company. The Series-A effectively set-up Mile High Labs for large-scale expansion; and they are now going to finance extraction units on the largest existing farms in Colorado to create CBD products on the spot. 

Mile High Labs has already started a large extraction unit on an existing farm in eastern Colorado, and it’s announced that after they receive cash-flow from this round of funding, they will set-up another one in southern Colorado immediately. 

Mile High Labs intends to use its existing extraction equipment and/or create new mobile extraction equipment that they will bring over to existing, high-producing hemp farms and produce CBD products that they ship to their clients immediately. Almost 90% of their employees come from a pharmaceutical or a medical background, which enables them to create the highest-quality product for medical purposes. Their preferred CBD extraction method is alcohol extraction. 

The Series-A funding of $35M provided Mile High Labs with the financial capability to expand outside the United States and become an international company, and it choose its first international HQ in the United Kingdom. Mile High Labs now has offices in London and Belfast, which they use to streamline sales to the European market. The company is expected to expand to all countries in Europe where medical cannabis is currently legal. 

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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