420 with CNW – Canadian Tech Firms Gear Up For Cannabis Legalization Benefits

The legalization of cannabis in Canada has opened the door for different tech companies to cash in on the new opportunities presented by the cannabis industry. Several companies are testing or offering tech products and the consumers are loving those products.

Lobo Genetics is one such Toronto-based tech company that has a bright future if the preliminary interest in its latest product is anything to go by.

The company makes a handheld genetic testing device which only requires the user to take a swab from his or her mouth in order to assess whether that individual will metabolize THC (the major psychoactive ingredient in marijuana).

People who are genetically predisposed to metabolize THC are unlikely to develop adverse reactions when they consume cannabis whether for recreational or medical purposes.

The testing device was initially developed with the medical cannabis market in mind, but players in the recreational space have shown massive interest in it as well.

Strainprint Technologies Inc. is another Toronto-based startup that has designed an app for the cannabis industry. This app can help people track the strains, dosage of cannabis and any side effects that they notice as they use pot.

“Save the Drive” is another tech product being finalized in Winnipeg. It is intended to help people hire someone to buy and deliver cannabis to their addresses instead of driving out to a store themselves. The current supply shortages are the only reason why this platform hasn’t been launched as yet.

However, it is not just Canadian companies getting a piece of the action. A number of US-based tech companies have also thrown their hats in the ring.

“High There!” is a social networking platform with roots in Florida. The platform gives its users an opportunity to locate cannabis users with whom they can meet and enjoy a joint. The platform saw a massive 300 percent spike in new registrations when recreational cannabis became legal in October.

The founders of “Weedmaps” are based in California. Like the name suggests, “Weedmaps” helps people to locate places in Canada where one can buy cannabis. You therefore don’t have to drive randomly in a new place looking for a store selling cannabis.

Such tech innovations paint a very optimistic future for the opportunities available to the different industries with recreational cannabis now legal. It is hard to mention a single industry that may not benefit from the nascent marijuana industry. Golden Developing Solutions, Inc. (OTC: DVLP), Green Hygienics Holdings Inc. (OTC: GRYN) and other existing players welcome the new tech firms which have seen a gap that can filled in order to serve customers better.

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420 with CNW – Why Michigan May Have Decided to Levy Lower Cannabis Taxes

Michigan voters approved recreational marijuana in the recent mid-term elections and the state is now one of those with the lowest tax rates for cannabis. Didn’t Michigan need the revenue marijuana can bring? Was it playing for higher stakes? Several arguments can explain why Michigan chose the path it took.

First could have been concerns about the black market. The tax policy implemented by any state that legalizes marijuana influences whether consumers keep buying from the black market or switch to the legal product.

Michigan seems to have learnt from the pioneer states that legalized cannabis first. California has some of the highest taxes on marijuana, and it continues to struggle with the black market since illicit marijuana still costs much less than the marijuana from regulated suppliers.

Not many consumers would be willing to pay higher prices just because what they are buying is putting money in state coffers.

The low taxes set by Michigan may be geared at driving out the black market since the legal product would be priced competitively.

Secondly, Michigan may have designed their marijuana tax policy with cannabis companies in mind. Industry players are struggling to stay competitive and profitable in the states where taxes are very high.

The prospect of setting up shop in a state with low taxes may be attractive enough to lure many players into the Michigan cannabis space.

The third possible reasons why Michigan may have decided to levy lower taxes on recreational cannabis is the need to make the product affordable to as many willing consumers as possible.

The projections of the potential volume of retail sales often factor in how many people will consume the product on a regular basis. Those calculations can come to nothing if the target buyers see it as too expensive for them to afford.

Imposing lower taxes may therefore be a smart move to bring more consumers into the industry so that the sector can have a sustainable client base.

Generally speaking, taxes on marijuana have been falling as more states legalize adult-use cannabis. California and Washington which impose taxes in the range of more than 40 percent are increasingly becoming isolated as other jurisdictions levy lower taxes.

Fortunately, voters seem to have understood the logic behind the tax policy in Michigan. They voted the ballot measure through, unlike the voters in North Dakota who voted against the proposal.

It remains to be seen whether the reasoning behind the low cannabis taxes in Michigan bears fruit or not. Generation Alpha, Inc. (OTCQB: GNAL), Global Payout, Inc. (OTC: GOHE) and other industry players wish Michigan all the best on the journey it has started as one of the latest states to permit recreational cannabis use.

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420 with CNW – Canadian Employers Meet to Discuss Cannabis Legalization Implications

The cannabis forum of the Retail Council of Canada (RCC) met last month to discuss the workplace implications of cannabis legalization. The forum speakers and participants raised some issues that all employers need to think about as they adjust to the new reality in the country.

The first issue related to the medical cover provided to employees. Employers were asked to think about how they would respond if employees filed claims for medical cannabis benefits. Does the law compel the employer to provide such cover, or it is left to employers to decide whether to provide those benefits?

The second concern had to do with preventing impaired employees from showing up at work. Questions were raised about how the right of the employees to consume recreational cannabis could be married to the need to prevent impairment at work.

There was a suggestion that employers can impose consumption guidelines similar to what other sensitive sectors, such as the airline industry, impose on employees. For example, pilots are instructed to refrain from taking alcohol within a certain number of hours before they are scheduled to fly a plane.

The employers were cautioned to avoid imposing a blanket ban on cannabis consumption since that would be illegal and expose them to liability issues. Only those employers who could prove that the job required total abstinence could take such action. For example, it would be reasonable to restrict security guards from consuming recreational cannabis on the job or some hours before their shift begins.

There was a call for scientific data on how long someone can be impaired after consuming cannabis. Such data would provide a basis upon which employers can draft cannabis policies for their employees.

The issue of impaired customers was also raised. It is one thing to provide guidelines for your employees and it is a totally different matter when it comes to impaired customers in retail outlets.

Members in attendance suggested that employees need to be given some training regarding how to handle customers who visit retail establishments while apparently impaired after consuming cannabis.

The possible fear of being stigmatized for consuming recreational marijuana also came up. A speaker at the forum predicted that some employees may falsely claim that they are medical cannabis users in order to explain away their impairment while at work.

Other members suggested that it would be reasonable for employers to ask employees for a copy of their documentation for medical cannabis to prevent such false claims. However, the employer should not ask for the diagnosis upon which the authorization card was issued since that would be overstepping the acceptable boundaries.

The forum ended with members agreeing that more sessions need to be organized so that people can continue to share experiences and ideas regarding the workplace implications of cannabis legalization. Such healthy and progressive discussions are music to the ears of cannabis companies like Earth Science Tech, Inc. (OTCQB: ETST) and FinCanna Capital Corp. (CSE: CALI) (OTCQB: FNNZF) since such discussions differ from the polarized, adversarial pronouncements that are made in some jurisdictions.

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420 with CNW – Greenhouses Could Eliminate the Cannabis Black Market

Canada has seen a number of cannabis cultivators shifting to the use of greenhouses instead of growing the crop in indoor grow rooms. This new development could mark the final days for the cannabis black market in Canada and elsewhere.

Greenhouses can drive down the cost of legal marijuana in several ways.

As you may know, land accounts for one of the biggest costs that marijuana cultivators have to incur in order to bring the produce to the market. Indoor grows are located on prime industrial land which costs a fortune.

The shift to greenhouses means that cannabis producers can go to rural agricultural land which is cheaper to acquire. The reduced cost of land can translate into lower prices for each pound or kilo of cannabis.

Secondly, indoor grow facilities consume a lot of electricity in order to create the ideal conditions for growing cannabis. That high cost of providing electricity has always meant that legal cannabis will be more expensive than what is available on the black market.

Greenhouses can allow cultivators to use just 40 percent of the power that they needed when they were growing the plants indoors. This reduced energy demand would then make it cheaper to grow cannabis for the legal market.

Furthermore, greenhouses allow the economies of scale to come into play. As already mentioned, rural land is cheaper than the industrial land where cannabis has been grown indoors. Mega cannabis operations can therefore be undertaken on the expansive agricultural land which is available in Canada and elsewhere where cannabis is legal.

Pure Sunfarms is an example of cannabis producers in British Columbia who have decided to harness the power of the sun to grow marijuana. The facility has greenhouses covering a staggering 1.1 million square-feet. The complex used to cultivate other produce, such as tomatoes and peppers, before the greenhouses were retrofitted for the cultivation of cannabis.

This trend is likely to be replicated across Canada and the rest of the world if production costs are to be driven downwards. That means that big agricultural operators are going to drive the smaller players out of business since the “small guys” will not manage to compete with their bigger counterparts.

Ultimately, it is the cannabis consumers who will benefit since the competition among the big players will keep driving innovation in order to cut production costs further. It is those low production costs that will eventually kill the black market since the risks of illegal production are likely to increase with the passage of time. Legal cannabis industry players like Cannabis Strategic Ventures, Inc. (OTC: NUGS) and Canopy Rivers Inc. (TSX.V: RIV) long to see the day when the black market will dwindle to an insignificant level across the industry.

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CannabisNewsWire (CNW) is an information service that provides (1) access to our news aggregation and syndication servers, (2) CannabisNewsBreaks that summarize corporate news and information, (3) enhanced press release services, (4) social media distribution and optimization services, and (5) a full array of corporate communication solutions. As a multifaceted financial news and content distribution company with an extensive team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. CNW has an ever-growing distribution network of more than 5,000 key syndication outlets across the country. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled visibility, recognition and brand awareness. CNW is where news, content and information converge.

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420 with CNW – What the World Can Learn from the Dutch about Cannabis

Debate about cannabis has taken center-stage across the world after Canada took the bold decision to legalize recreational marijuana on October 17 this year. As people observe events in Canada, the true lessons about marijuana may lie in Europe, the Netherlands in particular. Several lessons are plain to see for those who are willing to observe how the Dutch have handled the issue of cannabis.

Neutral Observation is Important

While Nixon’s government declared all-out war on marijuana and other psychoactive substances, the Dutch opted for another approach. They decided to neither outlaw nor legalize cannabis. They “tolerated” it and observed what it would do to its users and others involved in the “industry”. That observation led the authorities to conclude that marijuana didn’t pose a serious-enough public safety risk to warrant the allocation of law enforcement resources to fight it.

Lesson number one? First observe a substance you are interested in before you make any policy decisions about it. You will rarely go wrong if you take this approach.

Tolerance Disarms Counterculture

Every community will have a group of people that will want to identify with what is illegal. The hippies are an example of a counterculture movement that swept across the U.S. decades ago. The youth are another section of the community that will be drawn to anything illegal “just for just”.

Counterculture has the irresistible “cool factor” attached to it, and declaring a substance illegal instantly gives it a cool factor. See how the U.S. FDA is having sleepless nights due to the explosion in the use of electronic cigarettes by minors.

The Dutch decided to tolerate cannabis, so it was no longer a substance of choice for those who wanted to rebel against society. It wasn’t cool to light a joint. That provides cannabis lesson number two for the world.

Tolerance Limits Criminal Involvement

The Dutch don’t have a huge cannabis black market to gobble up law enforcement resources because “coffee shops” openly sell marijuana to their clients. The government controls how much stock each establishment can have, and it imposes taxes on each gram of cannabis sold.

Law enforcement just steps in once in a while to confirm that the sellers aren’t breaking any of the rules regulating the sale of cannabis. Why would anyone buy from the black market when the same product can be procured openly? Lesson three, criminalizing cannabis will only magnify law enforcement headaches without stopping the criminal enterprises involved.

Science Prevails Where Legalization Occurs

Is cannabis legal in the Netherlands? No. Is it illegal? The answer again is in the negative. Cannabis is somewhere between legal and illegal, it is tolerated. This kind of legal regime has made it hard for the scientific community to study cannabis in the Netherlands. Consequently, the country has very little to show for all its decades of cannabis tolerance. Countries like Canada that legalized medical marijuana may have more knowledge about the plant than the Netherlands where it has been available for decades.

Lesson four? Legalization is the only way through which the scientific community can devote the immense resources needed to conduct studies about cannabis. This fourth lesson, along with the other lessons, may be why companies like ChineseInvestors.com (OTCQB: CIIX) and Choom Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) would like to see different jurisdictions enacting laws to regulate the cannabis industry so that it grows in a responsible way instead of letting it thrive underground.

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Political Wins Hold Promise for Strong Cannabis Strategies

CannabisNewsWire Editorial Coverage: State ballots and the departure of Jeff Sessions have led to fresh confidence in the cannabis sector.

  • The cannabis industry is going through a period of huge growth.
  • Two states recently voted to legalize medical cannabis and one voted to legalize recreational cannabis.
  • The departure of Jeff Sessions removes a significant block for the industry.
  • A variety of strategies—some focused on product and others on support services—are emerging to make the most of this market.

Generation Alpha, Inc. (OTCQB: GNAL) (GNAL Profile) has developed a dual strategy to make the most of this opportunity, investing in both product and supplies for producers. MedMen Enterprises, Inc. (CSE: MMEN) (OTCQX: MMNFF) is financially supporting further legal reform while building up a cultivation and retail business across several states. KushCo Holdings Inc. (OTCQB: KSHB) has grown from a packaging company to one providing a range of support services. As new niches emerge, The Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD) is staking its claim through a focus on organic, sustainably grown cannabis. Even non-cannabis companies are profiting from this growth, with Scotts Miracle-Gro Company (NYSE: SMG) investing in hydroponics offerings that will supply crucial equipment to cannabis cultivators.

To view an infographic of this editorial, click here.

A Blooming Industry

Cannabis companies are in a jubilant mood following the results of last week’s events in American politics. At the polls, two states voted to legalize medical cannabis while another voted to permit its recreational use. Though Congress lost several pro-cannabis Republicans, a majority for the Democrats, America’s less conservative party, is a good omen for reform. And with President Trump’s sacking of Jeff Sessions, the country is now rid of a staunchly anti-cannabis attorney general.

This opens the way for companies with strong cannabis strategies to make bold moves in the coming year. From entering new states to producing fresh product lines, the options for growth and development are many. A few key considerations define the strategies of the current cannabis players.

Product Versus Infrastructure

Two basic approaches to business strategy currently dominate the cannabis market — one based on infrastructure and the other based on product. However, these strategies don’t have to be separate, and Generation Alpha, Inc. (OTCQB: GNAL) is building strong businesses by combining them. And the way this strategy plays out shows a lot about where the industry is at.

The product strategy is an obvious one and typically garners the most public attention. Companies going down the product path focus on the production, processing, and retail side of cannabis. These are the companies setting up farms and dispensaries, feeding the growing demand from consumers across North America. It a strategy that Generation Alpha recently moved into, under its previous name of Solis Tek, with the acquisition of cultivation and processing facilities.

The other strategy is to provide support services and supplies for product-oriented companies. As the market grows, there will be more and more need for such services, which profit off cannabis but are better insulated from shifts in the market and its political oversight. Generation Alpha started out with this strategy, as a vertically integrated technology innovator, developer, manufacturer and distributor bringing products and solutions to cannabis growers. Providing horticultural and lighting supplies, the company grew by providing cannabis growers with the equipment they needed.

Each strategy can work well on its own, but running a double strategy, while more complex, has real potential benefits. As both supplier and customer for cultivation equipment, companies such as Generation Alpha can create great efficiencies in their supply chains. And by developing both business streams, they can benefit from the security of a picks-and-shovels approach while also accessing the growing profits of the front-line cannabis trade.

Location, Location, Location

Choosing which states to operate in is an important consideration for American cannabis companies. Although it is widely anticipated to change, cannabis currently remains illegal at a federal level, and it is only through state-level initiatives that the market has been allowed to emerge. Cultivation and retail effectively operate on a statewide scale at best, so looking at where a state stands now and where it is likely to go in the future is vital to making savvy business decisions.

Arizona, where Generation Alpha recently acquired cultivation and processing facilities, provides a useful example of how local conditions shape the market. The state made medical cannabis legal in 2010. Despite a closely fought vote, opponents of cannabis have failed to overturn or limit the market despite ongoing campaigns. The state’s supreme court even overturned a rule keeping medical cannabis off college campuses. Arizona’s medical cannabis market seems secure.

In 2016, an attempt to legalize recreational cannabis in the state failed by a narrow margin. Medical legalization faced a similar setback in 2002, only eight years before passing. As recent generations are generally more liberal toward cannabis than their elders, it is likely that a similar pattern will play out for recreational cannabis, with a successful vote almost inevitable. Companies that have become established under the medical licensing laws will be in a strong position to make the most of this.

“We are excited about this opportunity in Arizona and its growth and profitability potential,” said Generation Alpha CEO Alan Lien. “We are pleased to have partners such as Future Farm Technologies and Yorkville Advisors to collaborate and support the build-out and growth of this facility. Our collective experience and knowledge in cannabis will position this Arizona operation for success. We are excited to commence Phase 1 of the development and construction of our state-of-the-art cultivation and processing facility and look forward to many additional opportunities in the cannabis industry.”

Expanding Operations

The potential of the Arizona market hasn’t gone unnoticed by other companies. MedMen has invested heavily in getting into the state, acquiring a top Arizona medical cannabis wholesaler.

This is part of a wider pattern of companies spending big to secure their spots in a burgeoning cannabis sector. For example, drinks giant Constellation Brands has spent billions investing in a Canadian cannabis company to give itself a foothold in the industry. Canadian and American companies are looking at cross-border investment, while outsiders are moving into the market as well.

This big spending only adds to the strength of infrastructure plays such as Generation Alpha’s strong position in cultivation equipment. Much of the money being invested will go into growing more cannabis. That means more hydroponics, lighting and related services will be needed across the legalized states. Any investment in cannabis cultivators ultimately becomes an investment in their suppliers.

Where Next for Cannabis?

The next few years promise solid growth for the cannabis industry in North America. Even before this month’s political upheavals, analysts projected that the $9 billion industry would grow to $47.3 billion by 2027.

The fallout from the mid-terms means that investors can be even more confident about what happens next. The forced resignation of Jeff Sessions removes one of the biggest obstacles to growth for the cannabis industry in the United States. Sessions, a staunch opponent of cannabis, had rescinded the Obama-era memo committing federal law enforcement to non-intervention in state-level cannabis industries. With him gone, cannabis shares rose as businesses and investors looked forward to a more tolerant regime.

This won’t mean an end to campaigning for MedMen Enterprises, Inc. (CSE: MMEN) (OTCQX: MMNFF), the largest financial supporter of progressive marijuana laws, but it does mean that the company’s campaigning efforts are more likely to pay off, creating space for expansion of its cultivation and retail business. The company already operates 19 facilities in four states and has recently announced the addition of a fifth, through a move into Arizona. Despite the limitations created by federal laws, MedMen is showing that cannabis companies can operate on an inter-state level.

Like Generation Alpha, KushCo Holdings Inc. (OTCQB: KSHB) entered the sector by providing support services to cannabis producers, in the form of packaging solutions. The company has since expanded its operations, creating a one-stop shop for the cannabis market. Seeing the huge potential currently available, it has recently formed an advisory board to guide strategic growth initiatives, making the most of a constantly expanding market.

While KushCo provides another example of the infrastructure strategy, The Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD) is focused on product. A producer of organic, sustainably grown cannabis, the company is making the most of the connection between cannabis consumption and concern with environmental issues. In a market large enough to start dividing into specialist niches, it is tapping into the higher prices people will pay for organic products.

Not every company profiting from cannabis is focused on that market. Lawn, garden and outdoor living company Scotts Miracle-Gro Company (NYSE: SMG) has been benefiting from the demand for cultivation equipment that cannabis’s success brings. It recently acquired the United States’ foremost distributor of hydroponic equipment, which is crucial to the cultivation of cannabis. As the cannabis industry grows, so too does hydroponics.

Political change offers further growth for an already flourishing industry, allowing profits from a wide range of strategies.

For more information on Generation Alpha, visit Generation Alpha, Inc. (OTCQB: GNAL)

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CannabisNewsWire (CNW) is an information service that provides (1) access to our news aggregation and syndication servers, (2) CannabisNewsBreaks that summarize corporate news and information, (3) enhanced press release services, (4) social media distribution and optimization services, and (5) a full array of corporate communication solutions. As a multifaceted financial news and content distribution company with an extensive team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. CNW has an ever-growing distribution network of more than 5,000 key syndication outlets across the country. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled visibility, recognition and brand awareness. CNW is where news, content and information converge.

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Hydroponics Increasingly Key as Booming Cannabis Sector Goes to Next Level

CannabisNewsWire Editorial Coverage: With Canada’s decision to decriminalize cannabis nationwide and the 2018 U.S. Farm Bill’s provision to potentially make industrial hemp and hemp-derived cannabidiol (CBD) legal nationwide, the cannabis CBD product sector is gaining a strong foundation.

  • Analysts expect runaway growth in the cannabis and CBD markets.
  • Industry is scaling up amid regulatory reform.
  • Underlying growth metrics are bullish for hydroponics suppliers and cultivators alike.
  • Branding and marketing are increasingly important and tied to quality control.

Numerous interests stand to benefit as the cannabis sector begins to hit its stride, ranging from cannabinoid biopharma developers to cultivators with rapidly expanding acreage footprints. Pick-and-shovel plays such as hydroponics supplier Sugarmade, Inc. (OTCQB: SGMD) (SGMD Profile) could be some of the biggest winners, quietly supplying tons of hardware to a variety of end users without having to jump through the all the legal hoops. Tilray, Inc. (NASDAQ: TLRY), one of the first companies licensed to produce medical cannabis as dried flower in Canada, has quickly become known for its full-spectrum cold-extracted cannabinoids with clearly indicated tetrahydrocannabinol (THC) and CBD potencies. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has parlayed its leadership in cannabis and hemp with dried, oil and softgel capsule products into a landmark $4 billion investment from beer, wine and spirits major Constellation Brands, Inc. Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), which operates two wholly owned Canada-licensed producers, is making its presence felt across five continents. And Aphria Inc. (NYSE: APHA) (TSX: APHA) is also making serious waves as a globally minded cannabis producer, having just recently been approved for uplisting to the New York Stock Exchange.

To view an infographic of this editorial, click here.

Historic Market Forces Create a Perfect Storm

After more than eight decades of prohibition, cannabis has gone from a black market to a tax revenue-generating multibillion-dollar industry in a handful of years. It is an industry nipping at the market share heels of sectors like alcoholic beverages, food and drink, supplements and now even biopharmaceuticals. The market for just one of over 100 different cannabinoids, the non-psychoactive CBD, was recently projected to break $22 billion by 2022. CBD alone could have “profound impacts” across the consumer packaged goods (CPG) and pharma industries according to Brightfield Group, potentially outpacing the broader cannabis market combined. It would be a major boon to the U.S. market if industrial hemp and CBD become legal under the latest Farm Bill.

Recent analysis in a report from Amadee & Company cites baseline market metrics such as over 37 million people in the United States using cannabis (both legally and illicitly) as contributing to a North American market worth over $41 billion this year, which is on track to hit $95 billion by 2026. The more conservative figures from Arcview Market Research and its research partner BDS Analytics are the $9.2 billion in sales seen in 2017, and a projection of $47.3 billion within 10 years. Either way, investors are looking at some low-hanging CAGR fruit, and the sector as a whole has scaled up enough that it is now seemingly much easier to pick winners that can thrive, regardless of potential governmental policy drift.

Many End Markets – One Stop Shop for Hydro Hardware

Sugarmade, Inc. (OTCQB: SGMD), headquartered in northeastern Los Angeles County on the edge of the Angeles National Forest, has already established a formidable presence in the hydroponics supply market with brands such as ZenHydro.com, CarryOutSupplies.com and BudLife. The company also recently launched a massive new $1 million initiative to cement a foundational position in the emerging U.S. industrial hemp and CBD market through an investment in privately held Hempistry, Inc., a Kentucky-based farmer (23,000 acres) of an ultra-rich CBD strain of hemp.

Hydroponics has rapidly emerged as the dominant strain in the cannabis cultivation industry when it comes to medical cannabis, or products that want to emphasize stringent environmental cultivation controls and overall consistency. The KD Market Insights report projects a six-year CAGR of 20.7 percent, as a $5.22 billion 2017 hydroponics market grows to $13.84 billion in 2023. According to another report, cannabis cultivation will be a major driver of sector growth, with just the U.S. hydroponics market set to clock in at 20.3 percent CAGR from 2018 to 2025, hitting around $3.7 billion.

These are significant advantages for SGMD as the company pursues its binding definitive agreement to acquire Nevada-based Sky Unlimited, LLC, which has developed a solid reputation throughout the full spectrum of cultivation markets. Its robust AthenaUnited.com website lists everything from advanced lighting systems such as Hortilux lamps and ballasts to complete hydroponics kits such as the AeroFlo 60 aeroponic system from General Hydroponics, which super-oxygenates the nutrient solution. The AeroFlo line is a great example of a brand that growers, academics and researchers alike have praised for delivering consistently hearty growth rates and yields. Consumers from various cultivation industries have come to trust that they can find the best environmental control systems and cutting-edge nutrients, as well as plant care and more general gardening supplies on the site.

Ready to Launch

Sugarmade will retain all employees and completely assume all operations and liabilities via the acquisition. The company anticipates that the Sky Unlimited deal will be highly accretive for shareholders and has further increased the previous 500 percent annual revenue growth projection made back in July, of $30 million during 2019, to a whopping $70 million. This handsome increase owes a lot to how easily integrated the parallel business lines of Sky Unlimited and Athena are to SGMD’s existing model, as well as the extent to which the deal will allow Sugarmade to not only access the larger commercial cultivation market more directly but also enhance its emphasis on brands in a market where brand loyalty still means a great deal.

Scheduled for January 2019, the deal is subject to an extensive audit of the Sky Unlimited operations, but confidence is high that this latest acquisitive foray by Sugarmade will spell share price appreciation gold for the company’s shareholders. In fact, things are apparently looking so good overall for the company that management has begun positioning for a potential NASDAQ uplisting, tapping the requisite legal team to expedite the process.

Symbiosis amid Competition

The broader market is set up nicely for SGMD to take advantage of, but the reality is more symbiotic than predatory.

Tilray, Inc. (NASDAQ: TLRY) was the first company to legally export medical cannabis from North America to Europe, Australia and New Zealand. One of the top names in both cultivation and research, Tilray is on deck to report Q3 financials this Nov. 13 after a strong quarter in which the company successfully closed a $450 million private placement funding run with qualified institutional buyers. The company is one of the pioneers in clear labeling of THC and CBD concentrations and has a public-facing dedication to compliant and effective products that lead the industry by example.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) prides itself on the highest quality cannabis, whether it is ultimately distributed as dried flower, oils and concentrates, or precisely formulated softgels. The company has a strong hand in industrial hemp for producing CBD, and now that alcoholic drinks giant Constellation Brands (which has over 100 brands to its name) recently closed its $4 billion investment in the company, Canopy is poised to strike hard and fast across the more than 30 countries worldwide that are in the process of advancing some form of permissible cannabis regulation for adult use or medicinal purposes.

Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) is increasingly a global player, with operations in Canada, Colombia, Germany, Poland, Israel and Australia. The company launched its second recreational cannabis brand this year and has two wholly owned Canada-licensed producers to its name, as well as a 21.5 percent stake in British Columbia-based Whistler Medical Marijuana Company, which is licensed to produce and sell medical marijuana and cannabis oil.

When Aphria Inc. (NYSE: APHA) (TSX: APHA) uplisted from the OTCQB to the NYSE, it was not just big news for the company but for the cannabis industry and smallcap markets as a whole. Aphria has seen an impressive rise from a relatively small player to a true global leader in cannabis. The company’s rigorous study of the end-user market and ingenious development of a variety of brands to suit every buyer segment has delivered bottom-line results across the company’s entire line of capsules, oral solutions, oil syringes and single-unit vaporizer cartridges.

Once-in-a-lifetime Early-adopter Opportunity

As attitudes and regulations open up the global market for the end products being developed in the cannabis market, from commercial drinks containing CBD to lab-grown cannabinoid biopharma indications, some of these smaller companies are starting to look to many analysts like potential all-stars. Differentiating factors such as brand presence, product execution and market access/penetration are important analytical vectors. However, key capabilities such as being a picks-and-shovels supplier are of particular note, whether one is talking about hydroponics hardware for production or producing the raw cannabis that other companies rely on.

For more information on Sugarmade, visit Sugarmade, Inc. (OTCQB: SGMD)

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