Affinity Energy says it’s moving into algae-cannabis skincare — four months after it said it would spin off its cannabis arm.

The company — which was formerly known as Algae.Tec (ASX:AEB) — has a deal to look into using its algae and cannabis oils in Skin Elements’ (ASX:SKN) skincare range.

Stockhead is seeking comment from Affinity on whether it is still spinning out is Paraguayan cannabis assets — and if so where it intends to source cannabis to sell to Skin Elements.

Affinity has been working on getting an algae nutraceuticals and animal food operation up and running since 2015 after its algae-as-biofuel theory didn’t work out.

It appears sales of nutraceuticals and animal food have still not taken off. The company reported $119,462 from ‘Provision of services and equipment’ in fiscal 2018 — compared to $665,813 in 2017.

The deal with Skin Elements “represents an opportunity to collaborate” rather than a commercial deal. Affinity will supply algae and cannabidiol (CBD) oil formulations.

Affinity’s stock bounced by 8 per cent to 1.4c on the news:

Affinity shares over the last six months.

Skin Elements also saw an 8 per cent jump to 5.6c. Both companies have come off five-year lows reached in the last three months.

CBD is legal in Australia as a highly controlled medical products.

As yet no company has managed to introduce an over-the-counter CBD skincare product to Australia which includes an effectively level of the chemical, even though outfits such as Bod Australia (ASX:BDA) have looked into it.

As a skincare product, CBD is suspected to hold curative properties for problems like acne.

Botanix (ASX:BOT) is testing the theory by running clinical trials on its formulations, using synthetic CBD, for acne and dermatitis.

“The development of algae, and cannabis oils, for use in skin care products is an exciting opportunity for our company, and one that we are keen to pursue and maximise,” said Skin Elements chair Peter Malone.

Affinity chair Mal James says they will supply the algae from their growing facility in Atlanta from which they’re already supplying “key nutraceutical and aqua feed markets”.