AgraFlora Organics International Inc () (OTCMKTS:AGFAF) said it's subsidiary Sustainable Growth Strategic Capital Corp has received approval from Health Canada to begin extraction at its Greater Toronto Area facility, under an amendment to its standard processing license.

SGSC has been working with partner farmers in the Canadian CBD business to optimize its harvest and maximize the subsequent CBD extraction. In March, the company conducted a trial extraction of hemp-biomass, which will be extracted by third-party services and sold as CBD crude oil, distillate and isolate.

SGSC also holds standard cultivation and medical sales licenses

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If things go according to plan, SGSC plans to move toward a second production cycle of as much as 1,300 kilograms of hemp biomass with CBD concentrations above 8%.

The company’s current facility is designed to handle up to 250,000 kg of biomass for extraction using chilled ethanol for primary extraction followed by distillation and isolation. During the trial and subsequent third-party extraction, SGSC plans to design and size its in-house extraction capacity to maximize profitability.

AgraFlora owns an indoor cultivation facility in London, Ontario, as well as an edibles manufacturing facility in Winnipeg, currently being retrofitted.

The company is also a joint venture partner in Propagation Services Canada Inc, which operates a 2.2 million square foot greenhouse complex in Delta, British Columbia.

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