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Cultivation Archives - Hemp Market Report

StaffStaffJune 23, 2020
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3min00

Hemp oil producer Entoura, whose legal name is AVF CBD, LLC is buying Kentucky-based Atalo Holdings, an agriculture, and biotechnology firm specializing in research, development, and production of industrial hemp. The value of the deal was not disclosed.

“Entoura is committed to sustainable and trustworthy products that leverage the benefits of the renowned hemp plant. Bringing Atalo onboard, with its rich history of innovation in hemp, brings us closer to achieving that goal,” said Kevin Murray, Founder and Chief Executive Officer of Entoura. “Atalo’s incredible legacy in hemp cultivation, innovation and advocacy is truly inspirational, and we look forward to continuing that story.”

Entoura is a vertically integrated, high-quality USDA certified organic and cGMP-certified hemp oil producer. The company was started after its founder discovered the potential for CBD and the hemp plant in assisting with his son’s autism symptoms. The team has grown to 15+ members, comprising decades of combined genetic, agronomic, processing & financial experience. The company said that team members include the Former National Cultivation Manager for Canopy Growth, an Agronomist with 38 years experience (24 years in crop production), and the Former Director of Cultivation for Kiona THC and horticulturist from Acreage Holdings.

Atalo is located in the heart of Kentucky’s hemp region and boasts a rich history in hemp cultivation and genetics, dating back to the 1800s. The company’s ability to produce farmer-focused food-grade hemp products further augments Entoura’s robust supply chain. Entoura said it plans to leverage Atalo’s existing brands and product scope to enhance its product suite and to offer private label services, including industrial hemp genetics, flower, and hemp oil extraction. Entoura plans to combine its advanced genetics and distillation capability with Atalo’s hemp seed oil for integrated and differentiated product development.

Entoura has the following processing capabilities:
• 40,000 sqft of facility space with an additional 30,000 by 2021
• 15,000 lbs of biomass/day with addition 10,000 by 2021
• CO2 Cryo Ethanol Extraction
Farming Capacity:
>1000 Acres Organic Capacity
>50,000 Acres Total Capacity

 

 


StaffStaffMay 8, 2020
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8min00

Editors Note: This post was republished with permission from CannabizMedia.com

Cannacurio: Connecticut Hemp

It is hemp season and today’s Cannacurio delves into the hemp licenses in our home state of Connecticut. Connecticut has three types of licenses right now that includes cultivation, processing, and manufacturing. Between Pending and Active there are 217 licenses and here is how they break down across activities:

Connecticut 2020 Hemp Licenses by Activity

Manufacturer License: To make hemp products intended for human ingestion, inhalation, absorption or other internal consumption (collectively “consumables”), you must apply for and receive a manufacturer of hemp consumables license. Such a license is required to engage in the conversion of the hemp plant into a byproduct by means of adding heat, solvents, or any method of extraction to modify the original composition of the plant into a consumable.

Processor License: To use or convert hemp to make a product that is not a consumable, you must obtain a license from the Department of Agriculture. The processor license will be required to produce all animal food, and non-consumables, such as textiles and building products.

Grower License: Issued to a person in the state-licensed by the commissioner to cultivate, grow, harvest, handle, store, and market hemp.

Key Findings

  • There are 217 active and pending Connecticut hemp licenses so far this year
  • 66% of the licenses are cultivators, 25% cultivators, and 9% processors
  • 73 of the licenses have been formed with other licenses to create a vertically integrated operation. 84% of the processors are integrated with other licenses.
  • Incredible Edibles, a well-known brand, received both a cultivator and manufacturer license.

Vertical Integration

One of the questions we are increasingly asked about is how many licenses are vertically integrated. For Cannabis licensing that is easier to answer as it is often regulated – think Florida and New York for full integration or New Mexico and Connecticut for partial. However, in the hemp economy, it is really up to the discretion of the business to decide if it wants to and is qualified to manage multiple activities.

In evaluating the 217 licenses above we have determined that 73 of these licenses – or about a third have been vertically integrated into stacks of two or three licenses. 144 operate as stand-alone licenses.

Vertically Integrated Connecticut Hemp Licenses

In other words, 66% are stand-alone businesses and in looking at the % table above we can see that Cultivators have the highest likelihood to be a stand-alone business followed by Manufacturers and Processors.

The processing function is most likely to be vertically integrated or stacked – only 3 of the 19 processing licenses are stand-alones.

Why does this matter?

It speaks to the ease with which business owners can make the determinations as to the types of businesses they would like to pursue. There are a couple of other factors at work here as well. In order to get all three of these Connecticut licenses, the business owners had to secure cultivation and manufacturing from the Department of Agriculture and the Processing license from the Department of Consumer Protection. This supports a trend we have seen in hemp licensing where states expand the activities they permit and utilize existing regulators to help carry the burden.

We have seen this play out in Florida and Louisiana where existing regulators manage the licensure of retail sales. This is a stark contract from cannabis regulatory schemes where monolithic entities are created to handle the process.

Leaderboard

Here are the license holders who have secured/applied to receive all three license types in Connecticut:

CT Hemp Leaderboard - Vertically Integrated


StaffStaffApril 23, 2020
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4min00

Hemp newcomer Exactus Inc. (EXDI) is undaunted by the market’s challenges and recently said that it is on track for first-quarter gross sales to exceed gross sales of the entire prior 2019 calendar year. A few weeks ago Exactus announced it was developing a partnership with Hemptown USA that will position Exactus for rapid growth through this CBD and CBG partner.

Exactus entered the industry in 2019 before the raw materials price collapsed but that has not altered their course. The company’s hemp is grown specifically for cannabinoid & terpene profiles to serve the food, beverage, cosmetics, pets, and pharmaceutical industries.  In addition to what they’re currently doing, they see tremendous potential for the hemp plant as a whole to service many other industries such as textile and energy.

“While many industries are at a standstill, Exactus continues to move forward in order to keep up with supply and demand. We are seeing an increase of interest in CBD and CBG while people look for natural alternatives to manage the many stressful aspects of life surrounding the virus,” said Bobby Yampolsky, Chairman of Exactus. “Exactus Interim CEO, Emiliano Aloi will further develop the production platforms for both companies, working in the fields with Hemptown to provide immeasurable benefits to both companies.”

The company noted that there are bottlenecks in the supply chain and its goal is to consolidate farms, processing, and finished goods manufacturing together under one umbrella to produce the highest quality cannabinoids more affordable to everyone.

New Executive Team

In 2019 Exactus and its board of directors decided to enter the hemp space and restructure their executive team to include interim CEO Emiliano Aloi who has over 20 years of experience in farming and agriculture.  Aloi was behind the 2016 hemp genetics selection program in partnership with the University of Kentucky during his time at GenCanna. The collaboration started as a consequence of the market needing reliable and compliant genetics sources to help farmers ensure success in growing hemp which at the time was an emerging crop.

The company also brought on President/Chief Growth Officer, Derek Du Chesne after his successful run with EcoGen Laboratories. The addition of strong leadership in the hemp space is paving the way for Exactus as leaders in feminized CBD, CBG, and other specialty cannabinoid genetics. Prior to joining Exactus as Chief Growth Officer, Du Chesne was responsible for over $100 million in revenue at his previous company EcoGen Laboratories. He was also the CEO/Co-Founder of Healing Ventures, a marketing & supply chain firm that helped bring several leading  CBD companies to market.

The hemp industry still in its infancy has had its number of lessons learned, especially in farming, which in general, carries an inherent climate risk and Exactus plans to mitigate most of these risks after many first-time hemp farmers in 2019 reported losing more than 50% of their crop.

 

 


StaffStaffApril 21, 2020
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4min00

Despite a crowded CBD landscape, Kentucky-based Cornbread Hemp has raised its goal of $107,000 in 17 days from 177 investors on the crowdfunding platform Wefunder. Cornbread Hemp said it is taking 250 years of Kentucky hemp farming traditions and crafted it into top-shelf CBD products. By selling a small percentage of their company, Cornbread Hemp will be able to expand its portfolio of Kentucky Proud, USDA certified organic CBD products to customers and retailers nationwide.

“While we have been flattered by the outpouring of support from our friends, family, customers, business associates, and total strangers, we think we know why they’re investing in us,” said Jim Higdon, Cornbread Hemp’s co-founder and chief communications officer. “Our investors seem to understand that Cornbread Hemp has the traction and vision to succeed in the CBD industry for the long term.”

The name “Cornbread” comes from the Cornbread Mafia, an outlaw group that kept Kentucky’s hemp traditions alive through decades of prohibition. Kentucky-grown hemp is now beginning to receive the nationwide respect it deserves, even in fully legal cannabis states. “That’s why we have investors and customers from places like Colorado, California, Oregon, Washington State, and Hawaii,” said Higdon.

Cornbread Hemp’s new investors include Dr. Leslie Mudd, PharmD, a board-certified oncology pharmacist; Gill Holland, a Louisville developer recently featured in the New York Times; and Render Capital. The other 174 investors come from 36 states and five continents. “Cornbread Hemp is a well run, well managed, and well thought out local business,” Dr. Mudd said on Wefunder. “Cornbread Hemp parlays a great ‘historical’ story … into a Kentucky-grown product with unlimited possibilities.”

Cornbread also noted that part of its fundraising success came with the support of Louisville’s entrepreneur community from Mayor Greg Fischer, LEAP Louisville, MetroStart, Louisville Future, and a $20,000 matching investment from Render Capital, through their partnership with Wefunder. “Capital is an essential ingredient in a thriving regional ecosystem and new methods of supporting growth are necessary,” said Marigrace Ragsdale, an associate at Render Capital. “We are excited to help support Cornbread Hemp’s use of this accessible platform that allows the community to participate while allowing flexible funding structures for the entrepreneur.”

It may also help that the company’s products are organic and this is becoming more and more important to consumers in these days of virus pandemics. Cornbread Hemp offers CBD oils that are USDA certified organic. Its organic hemp is planted in soil that has been pesticide-free for at least three years and grown without synthetic fertilizers. “After harvest, our processor extracts the organic hemp using organic sugarcane ethanol and blends it with organic coconut MCT oil in a certified organic facility to make Cornbread Hemp’s finished organic products. To ensure compliance with the high standards of the USDA National Organic Program, a third-party certifier audits the entire supply chain of every ingredient to verify they are free from any contamination and worthy of the USDA organic seal.”

 


StaffStaffApril 15, 2020
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5min00
The hemp advocacy group Vote Hemp said that on Monday April 13th, eight leading hemp trade and advocacy organizations sent a joint letter to Small Business Administration (SBA) administrator Jovita Carranza urging her to ensure that in the face of the COVID-19 pandemic, farmers are eligible for key Small Business Administration (SBA) programs, especially the Economic Injury Disaster Loans (EIDL) program. The letter was sent on behalf of hemp farmers nationwide including more than 17,000 licensed family farmers who grew hemp in 2019.
The eight signatories to the letter are Vote Hemp, U.S. Hemp Roundtable, U.S. Hemp Grower Association, National Industrial Hemp Council, Hemp Industries Association, Midwest Hemp Council, Hemp Feed Coalition and the Nebraska Hemp Industries Association.
According to Vote Hemp, the Hemp Business Journal estimates that sales of hemp products grew to more than $820 million in 2017 and estimates they will grow to $2.6 billion by 2022.
The CARES Act relief bill was passed by Congress on a bi-partisan basis to provide economic support including grants and low interest loans to businesses and individuals affected by the COVID-19 virus. However, much of the funding was distributed to the SBA and farmers historically are not eligible for SBA programs and funding. While some CARES Act funding was allocated to U.S. Department of Agriculture (USDA), there was not indication of when or how that funding might reach farmers and for what purpose it would be provided. Many hemp producers indicated they were struggling without access to loans or support that was going to other businesses. Given the unique nature of this disaster, the coalition felt that it was important that farmers including hemp producers should be able to access the Economic Injury Disaster Loans and other SBA relief programs.
“We are concerned about the economic impact of the COVID-19 virus on farmers and wanted to make sure that hemp producers were not left behind at this critical moment” said Eric Steenstra, President of Vote Hemp. “We urge the SBA and Congress to provide the same relief to hemp farmers that is being offered to other businesses.”
To read the coalition letter to the SBA, regarding hemp farmer inclusion in CARES Act aid, please visit: https://www.votehemp.com/wp-content/uploads/2020/04/VH-letter-to-SBA-Covid-farmers-EIDL-FINAL.pdf

StaffStaffMarch 31, 2020
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4min00

Congress has passed the CARES Act in order to assist Americans during the COVD19 pandemic. Despite paying onerous taxes, most cannabis companies are ineligible to take part in the rescue plan. Hemp farmers look like they will be able to take advantage of some assistance in the rescue package.

Harris Bricken law office noted on their website that the bill contains a $20 million grant to the Small Business Administration (SBA) Disaster Relief Fund. The site also pointed out that on March 11, President Trump instructed the SBA “to exercise available authority to provide capital and liquidity to firms affected by the coronavirus.” Unfortunately for marijuana businesses, SBA was quick to point out that:

“Because federal law prohibits the sale and distribution of cannabis, the SBA does not provide financial assistance to businesses that are illegal under federal law. Businesses that aren’t eligible include marijuana growers and dispensers, businesses that sell cannabis products, etc., even if the business is legal under local or state law.”

Harris Bricken also suggested that because the CARES Act delegates lending authority to banks and credit unions, that potentially eligible hemp businesses should reach out to their banks and credit unions directly.

Hemp, Inc. CEO Bruce Perlowin said, “We appreciate that the CARES Act includes language that designates relief for small businesses and relief for farmers–hemp farmers should absolutely be included in this as federal law now treats hemp as an agricultural commodity and not a controlled substance. While marijuana businesses and cultivators would not receive relief, hemp farmers should receive and benefit from direly needed stimulus funds. The hemp industry needs support now so that it can lead in uplifting and revamping the economy when the dust settles.”

Cannabis Crocodile Tears

Many in the cannabis community grumble about paying taxes but then get excluded from a rescue package. It’s a valid complaint, except that dispensaries have been allowed to stay open for the most part and many states have eased restrictions regarding deliveries and curbside service. Several have also reported very strong sales during the crisis and that makes it hard to believe that the companies need a rescue plan.

Granted physical distancing presents more challenges to the system, but then the cannabis industry is used to adapting to challenges. There are some that believe there are poorly run cannabis companies who are now hiding behind COVID excuses to explain poor results.

Hemp farmers, however, were struggling prior to the pandemic as many sunk large amounts of money into farms only to see prices drop and demand fall. Competition increased dramatically causing large players like GenCanna to declare bankruptcy. The CARES Act could be just the thing to hit the reset button.

EcoGen Laboratories Head of Sales Doug Watson said, “During this trying time, we are excited to see that the CARES Act includes language that designates relief for farmers and small businesses. Farming inherently comes with certain risks and any assistance from the government will help ease some of the fear in continuing to plant during this pandemic. In this same spirit, EcoGen is also working on a program where the company will buy back hemp from farmers in order to stand behind our farming customers. We are very hopeful that this stimulus will help the hemp industry in this important planting season for 2020.”


StaffStaffMarch 16, 2020
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3min00

HB 921, a bill addressing the hemp seeds used for hemp farming in Florida has passed the Florida Senate and House. It is expected for Florida Governor Ron DeSantis to sign the bill into law in the coming days.

The removal of the “rigid wording requirements” put in place by the Florida legislature will allow for clearer labeling. Nationwide there are currently 12 different labels required for hemp products. In addition to making the labeling easier, the legislation will allow for more research into plant genetics and will help determine what can be farmed in the Florida climate. The new legislation does not cover synthetic CBD.

Florida Hemp Council

The Florida Hemp Council, a non-profit that was created to provide structure, networking and services to the hemp industry in Florida, has been lobbying for this bill in Tallahassee.

Jeff Greene, the co-founder of The Florida Hemp Council stated, “At The Florida Hemp Council, we are happy with the result of the passing of HB 921. A late amendment to the bill allowed for important adjustments to the Hemp program in Florida. By exempting GRAS products and maintaining certain exemptions, we are able to cater to our small retailers and grocery store members. We were also able to keep order in the seed program for our farming members. Lastly, we are pleased to see that the Florida Department of Agriculture and Consumer Services received funding for 43 new employees. I would consider this session a win for the Florida hemp industry and am hopeful that Governor DeSantis will sign off, as planned.”

According to the www.hempbenchmarks.com, “As of February 21, Florida has not issued any permits to grow
hemp, according to Holly Bell, Director of Cannabis in the state’s Department of Agriculture and Consumer Services. With many farmers across the country already making preparations for the planting season by this point in the year, the fact that licenses have not yet been issued in Florida raises the question of whether hemp will be grown in the state this year and, if so, to what extent.”


StaffStaffFebruary 28, 2020
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4min00

A group of hemp industry policymakers released new policy recommendations and an updated model plan for state hemp programs, providing a guide to developing federally compliant state regulatory regimes. The recommendations can be viewed and downloaded at http://bit.ly/UpdatedHempPlan-Pt1.

“Our updated policy guide and model plan outline the best practices and legal requirements states can utilize to create hemp programs that are operable, successful, and federally compliant,” said Shawn Hauser, the lead author of the document and chair of the hemp and cannabinoids practice group at Vicente Sederberg. “We plan to continue updating these documents to reflect the evolving legal and regulatory landscape governing the burgeoning U.S. hemp industry.”

Part one of the update focuses on policy considerations related to hemp production. It is intended to promote compliance with the 2018 farm bill and the minimum requirements for state regulatory plans detailed by the U.S. Department of Agriculture in an interim final rule issued on October 31, 2019. Part two of the update will be made available in the coming weeks and addresses areas not governed by the USDA, such as processing and transportation.

The 2018 farm bill was signed into law in December 2018, lifting the decades-long prohibition on hemp production in the U.S. and allowing for federally sanctioned hemp production governed by the USDA. It gave states, U.S. territories, and American Indian tribes the option to act as primary regulatory authority, requiring those that choose to do so to first submit their regulatory plans to the USDA. In order to receive approval, plans must meet minimum requirements set forth in the farm bill, including regulations for registration, testing and inspection. States that choose not to regulate or prohibit hemp production cede jurisdiction to federal authority. Several states are in the process of creating plans, and  plans from eight states and 10 tribes have already been approved, according to the USDA website.

“Congress took a monumental step forward by ending our federal government’s decades-long prohibition on hemp production,” Hauser said. “It is equally important that it be replaced with sensible laws and regulations that protect public health and safety while also allowing this new industry to flourish. This crop has an exceptional amount of potential to boost our economy and improve our environment, but it will only be reached if the rules that govern it are fair and practical.”

The document was authored by attorneys with national cannabis law firm Vicente Sederberg LLP with support from Agricultural Hemp Solutions, the American Herbal Products Association, the U.S. Hemp Roundtable, and Vote Hemp. It is the first part of a two-part update to the “2018 Farm Bill Policy Guide and Model Hemp Production Plan,” which was produced by the same coalition of attorneys and organizations and released last February under the banner of the American Hemp Campaign.


StaffStaffFebruary 6, 2020
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4min00

The South Carolina Department of Agriculture (SCDA) said that it will begin accepting applications for hemp farming, handling and processing permits for the 2020 growing season starting Feb. 1, 2020. Now in its third year, South Carolina’s hemp farming program has grown from 20 farmers in 2018 to 114 permitted farmers and 43 processors at the end of the 2019 season.

In 2020, there is no cap on the number of permits SCDA can issue, and no cap on hemp acreage. SCDA will no longer allow “responsible parties” growing under another farmer’s permit, meaning each person who wishes to farm hemp must apply for a permit.

Requests To Change Federal Rules

SCDA’s Hugh Weathers is asking the U.S. Department of Agriculture to revise its national regulatory framework for hemp to better set up South Carolina’s Hemp Farming Program for success. USDA released its interim final rule on hemp on Oct. 31, 2019, and the South Carolina Department of Agriculture is in the process of writing a state plan that complies with the federal rule.

The SCDA has voiced several concerns about testing requirements in the federal rule and has formally submitted comments to U.S. Secretary of Agriculture Sonny Perdue asking that they are reconsidered. For example, the federal rule mandates that all hemp fields be sampled by SCDA-designated staff and tested by a DEA-registered laboratory within 15 days prior to harvest, a window SCDA feels is too narrow. Farmers are at the mercy of weather conditions, while laboratories are likely to experience back-ups during harvest season, and SCDA has not been given any funding to administer this testing.

“We believe that several provisions in the interim final rule lack the flexibility necessary for our farmers to be profitable and for SCDA to be able to implement a successful hemp program,” Weathers wrote.

Farmer Applications

Requirements to receive a hemp farming permit include:

  • Proof of South Carolina residency
  • Criminal background check
  • $100 nonrefundable application fee and $1,000 permit fee
  • GPS coordinates of all locations on which hemp will be grown
  • Attending an SCDA orientation and signing a Hemp Farming Agreement prior to possessing any hemp, including clones and seeds

SCDA will also license hemp processors and, for the first time this year, hemp handlers, a category that includes transporters, seed dealers, laboratories, and others who handle hemp. Separate permitting fees, facility requirements, validation inspections and certificate of occupancy are required.

Farming applications will be accepted Feb. 1, 2020, through March 31, 2020, while processing and handling applications will become available Feb. 1 and will remain open through the year. Applications will be available on the SCDA website, agriculture.sc.gov/hemp, starting Feb. 1.


StaffStaffJanuary 30, 2020
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4min00

Hemp Benchmarks report for January was published on Wednesday at the Hemp Benchmarks website. Founder Jonathan Rubin noted that wholesale hemp markets continue to face significant challenges, including oversupply and declining prices.

The report stated, “We have in previous reports emphasized the current glut of biomass on the market, which has led to farmers being unable to move their harvests. Such market conditions continued in January, with numerous members of our Price Contributor Network reporting that relatively little buying and selling of biomass was
taking place. Transactions that were reported showed high-CBD biomass prices continuing to sink, with the assessed rate for transactions of over 1 million pounds down 53% from last month.

Even the assessed price for high-CBG biomass experienced a 27% downturn. Reports from our network indicate that large volumes of biomass remain unsold, suggesting that further price erosion is possible. Additionally this month, numerous price contributors stated that sales of extracts, specifically distillate, have been sluggish. Very few spot cash purchases are being made and inventories held by producers and processors who are taking splits or tolling fees are growing.”

His exhaustive report determined the following results:

  • The glut of CBD biomass persisted in January. Numerous members of our Price Contributor Network reported few spot cash transactions, while large volumes remain unsold. The aggregate price for all transaction volumes declined 31% month-over-month, while the assessed price for large transactions (1 million pounds +) sank by 53%.
  • Sales of CBD extracts, particularly distillates, were also reported to be sluggish in January. Cash transactions are also rare, while inventories of producers and processors taking splits and tolling fees are growing. The assessed price for Crude CBD oil sank by 25% compared to December 2019, and the aggregate price for various types of distillates was down 17%.
  • As farmers prepare for the 2020 growing season, prices for clones and feminized seeds of CBD cultivars saw increases this month after several months of declines. However, prices for such items remain down compared to those documented at the end of October, when the USDA released new production regulations with an effectively stricter THC limit. Farmers are concerned that available CBD cultivars could be non-compliant with the new rules, while some seed producers scaled up significantly from last year.
  • Available data shows relatively low planting and harvest rates compared to the amount of acreage licensed for hemp production in 2019, yet growers still generated enough CBD biomass to swamp existing processing capacity and tank prices. Wisconsin officials stated registered growers reported that only 6% of their crops had been sold by the end of 2019, on average. With production looking as if it will increase in 2020, processing capacity and demand appear as if they will have to expand significantly to absorb it.

 



About Us

The Hemp Market Report will target news from the fast growing worlds of cannabidiol (CBD) and hemp. As a sister site to the Green Market Report, HMR will cover financial stories, but also take a look at lifestyle news as well. The Hemp Market Report will also publish sponsored content as we seek to expand our content offerings.


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