Creditors owed a total of €9.6 million by Austria-based CBD company Deep Nature Project GmbH will receive 20% of the money under a recently announced restructuring plan.
The payments will be made to the company’s 112 creditors in three installments over a period of two years, according to Austria’s Credit Protection Association (KSV) and the Alpine Association of Creditors (AKV), which approved the restructuring after the Gols-based company declared insolvency this summer.
KSV and AKV said the plan will let the company continue to operate.
Victim of CBD crisis
Deep Nature Project makes CBD and CBG dietary supplements, cosmetics, hemp foods and animal feed supplements under the Medihemp, Sativa Beauty and Vetrihemp brands.
The company suffered a drop in sales from €8.2 million in 2020 to €5.7 million in 2021, according to AKV. Andrea Bamacher, Managing Director at Deep Nature Project, attributed the company’s problems to the covid-19 pandemic and the market effects of the UK’s departure from the European Union. But the insolvency also comes amid the ongoing worldwide crisis in the CBD biomass sector and overhyped market projections for CBD products that failed to materialize.
“We couldn’t react that quickly, i.e. flip the switch from expansion to declining sales,” Bamacher told the Burgenlndische Volkszeitung newspaper.
Many struggling CBD companies see the UK’s projected $1 billion market as part of the solution to business troubles caused by the global CBD crash that started in 2019. But the approval process under the Food Safety Agency (FSA) has been slow to unfold.
Awaiting review in UK
Deep Nature Project is among roughly 450 producers that are awaiting approval of their products by the FSA under rules for new or “novel” foods. Products that passed the initial stage of the FSA review earlier this year await THC toxicology and other technical checks to make certain they are safe for human consumption.
Deep Nature Project had a total of 38 products preliminarily approved by the FSA. The Austrian company’s CBD would be competing with more than 12,000 products that have passed the preliminary stage of the troubled FSA review.
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