420 with CNW – Michigan Names 19 Communities to Benefit from Marijuana Social Equity Program

Michigan has unveiled the details of the communities that will benefit from the marijuana Social Equity Program of the state. The MRA (Marijuana Regulatory Authority) made this announcement while releasing the list of 19 communities and the different ways in which applicants from those communities will benefit.

The 19 disadvantaged communities are Detroit, Benton Harbor, East Lansing, Albion, Flint, Ecorse, Hamtramck, Highland Park, Inkster, Kalamazoo, Mt. Pleasant, Mt. Morris, Muskegon Heights, Muskegon, Niles, Pontiac, Saginaw, River Rouge and Ypsilanti.

During an exercise that lasted several months, the Marijuana Regulatory Authority put 150 stakeholders in workgroups and solicited input from them on how to select the disadvantaged communities that will benefit from the Social Equity Program, how qualifying individuals from those selected communities will be identified and what services or support should be provided to those selected individuals in the disproportionately affected communities identified. An online survey was also conducted seeking input on those same matters and 688 people responded to the survey.

From the results received, the MRA decided that disadvantaged communities would be selected based the number of marijuana-related convictions and the rate of poverty in those communities.

Taking the state’s marijuana conviction rate as a benchmark, counties that exceeded that state-level rate were identified for inclusion in the Social Equity Program.

From that group of counties, specific communities in which at least 30 percent of the population lived below the poverty level as defined by the federal government were selected.

MRA plans to start receiving applications from those intending to start marijuana businesses on Nov. 1 this year. Before that date, the authority will visit the 19 selected communities several times to educate the targeted population about the application and licensing process in relation to the Social Equity Program.

The representatives of MRA’s Social Equity Program will also help people from those communities to fill applications for participation in the Social Equity Program. These applications will then be scrutinized to confirm that those individuals qualify to benefit from the program.

The people who qualify stand to enjoy up to 60 percent reductions on the applicable fees for a marijuana business license.

For example, being a resident of one of the 19 listed communities for at least five years will earn the qualifying applicant a 25 percent waiver on the payable fees.

An additional 25 percent waiver will also be given to those who are the majority shareholders in the planned marijuana business which will be located within the disadvantaged community. The individual holding the majority ownership stake must also have a cannabis-related conviction in order to qualify for this additional 25 percent fee waiver.

A further 10 percent waiver will also be given to the Social Equity Program applicants who have also served as registered caregivers for at least two years in the period 2008-2017.

The members of the 19 communities will also get help in addressing all the issues related to running a marijuana business in the state. These include tax matters, employment law, workplace safety and health, environmental issues among others. Applicants will also be linked to other state departments and agencies whose services are pertinent to the marijuana industry.

The Social Equity Program appears to be a well thought-out plan that analysts believe will please cannabis industry players like Nabis Holdings Inc. (CSE: NAB) (OTC: NABIF) (FRA: 71P) and MustGrow Biologics Corp. (CSE: MGRO) that insist action must be taken to correct the wrongs committed during the war on drugs.

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW – Study Finds Legalized Recreational Cannabis a Danger to Alcohol, Not Tobacco

The recent wave of adult-use marijuana legalization across the U.S. has the potential of generating $22 billion in annual sales, but not everyone is thrilled about this development. New research that will soon be published in the Marketing Science journal shows that the alcohol industry is likely to take a hit once marijuana is legalized.

The research was done by Pengyuan, an assistant professor at the Terry College of Business (University of Georgia). He worked with Guiyang Xiong from Syracuse University.

The duo analyzed online search data taken from one of the leading web portals based in the U.S. In total, they crunched the numbers on 120 million ad impressions and 28 million anonymous searches done using this portal. The data in question covered the period January 2014 to April 2017.

The research revealed that the number of online searches done for alcohol reduced by almost 11 percent while the searches for tobacco and its products saw an increase of 8 percent.

The tobacco and alcohol industries are worth a total of $300 billion in the U.S. alone. While these two industries have been vehemently opposed to the legalization of cannabis, this research shows that the tobacco industry would be well advised to revisit their opposition to legal marijuana since opposing the advance of cannabis isn’t in their best interest.

However, the alcohol industry is justified (from an existential point of view) to oppose the onward march of legal marijuana across the country since a law legalizing marijuana at the federal level would see a major decline in the sales of alcohol. The industry therefore has to think fast and come up with ways to retain their customers if they want to retain as much of their market share as possible.

Interestingly, while this research revealed that the legalization of adult-use marijuana in a state causes 17 percent more adults to conduct online searches on marijuana, the number of people who are less than 19 show a reduced interest in marijuana (or at least they perform fewer online searches on the substance).

This again serves to dispel another perception that the legalization of recreational cannabis causes a spike in the interest shown in the substance by minors. Policymakers may therefore need to revisit their positions if they based any decisions they made upon a presumption that there will be an uptick in the number of people who show interest in the drug yet they aren’t of age.

These findings seem to make sense because pollsters have pointed out severally that many adults would opt for recreational marijuana rather than alcohol since pot doesn’t come with hangovers, weight gain and the other effects of consuming alcohol on a regular basis.

It would be interesting to know what industry players like Marijuana Company of America Inc. (OTCQB: MCOA) and Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) are planning to do in response to the likely spike in the opposition of the alcohol industry once the findings of this research are released and the fears of the alcohol industry are confirmed.

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420 with CNW – Cannabis Sales Could Soon Surpass Wine Sales, New Data Reveals

If the current trend of cannabis sales during the Fourth of July holiday continue, marijuana could outsell wine as soon as July 4 next year, according to new data collected on different staples during Independence Day celebrations.

The week in which this year’s Independence Day fell saw a record $400 million worth of cannabis sold by dispensaries across the country. Statistics show that this figure is 60 percent above the national average of the marijuana sales made during any typical week of the year.

The data collected and analyzed by Akerna Corp shows that every single day leading to July 4 registered a spike in the volume of marijuana sales when compared to typical days across the country.

For example, on July 1, there was a 45 percent increase in the sales registered by marijuana dispensaries when compared to the available data on typical Mondays. While this jump is sizable, it was the least sales bump in the days leading to the national holiday.

On Wednesday (July 3), marijuana dispensaries registered sales which were more than twice what they usually sell on any average Wednesday. In fact, the increase was 112 percent when compared to sales on ordinary Wednesdays in the year.

Bumps were also noticed in the average amount that each person spent at a cannabis dispensary during the days leading up to the Fourth of July. Similar bumps were also noticed regarding the number of products bought per person on those days.

To put these marijuana sales in context, Green Entrepreneur compared the $400 million generated from marijuana sales to other staples sold on such days. Americans spent $1billion on beer and another billion on fireworks on Fourth of July last year. Wine generated total sales worth $568 million on the same day last year.

If these growth rates stay the same, it is highly likely that marijuana sales on Independence Day will exceed those of wine next year.

These figures and predictions seem all the more credible given the fact that the number of Americans who believe that marijuana should be legalized federally is at an all-time high. Additionally, more states are legalizing marijuana for medical and recreational purposes, with Illinois being the latest to enact an adult-use marijuana legalization law.

Industry watchers believe that this boom in cannabis sales will give industry players like Hemptown USA and Green Hygienics Holdings Inc. (OTCQB: GRYN) added impetus to take bolder steps towards consolidating their positions in the industry.

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Smart Companies Finding Sweet Spot in Cannabis Processing, Manufacturing Opportunities

CannabisNewsWire Editorial Coverage: In between growers and sellers lie several potential places for companies with expertise to firmly establish themselves in the burgeoning cannabis space.

Savvy companies such as Youngevity International Inc. (NASDAQ: YGYI) (YGYI Profile) recognize the potential payoff of being involved in the back end of the cannabis industry. The company’s wholly owned subsidiary Khrysos Industries Inc. just signed a five-year contract to purchase hemp plant biomass for extraction, end-to-end processing and production of hemp-derived products. Indiva Limited (TSX.V: NDVA) (OTCQX: NDVAF) has successfully received an amended license from Health Canada for three additional grow rooms and three additional processing rooms. Neptune Wellness Solutions Inc. (TSX: NEPT) (NASDAQ: NEPT) recently announced that its wholly owned subsidiary received a notification letter from Health Canada indicating that all requested license amendments have been approved. Other cannabis companies are making strategic moves in the industry as well. CannaRoyalty Corporation (CSE: OH) (OTCQX: ORHOF) has obtained final approval to move forward with its plan of arrangement with Cresco Labs, which will result in the largest-ever public company acquisition in the U.S. cannabis sector. And KushCo Holdings Inc. (OTCQX: KSHB) has partnered with C.A. Fortune, a leading full-service national consumer products sales and marketing agency, with the intent to grant viable CBD companies access to large-scale, conventional retail channels.

Youngevity is extending its reach beyond offering products to the potentially lucrative areas of processing and manufacturing.
YGYI subsidiary just signed a five-year contract to purchase hemp plant biomass for extraction, processing and production.
Company moving forward to implement plan to increase processing capabilities by ten-fold.

To view an infographic of this editorial, click here.

Big Business May Be in the Back

The growth of the cannabis industry has been well touted. Consumer spending in the United States topped $10 billion for the first time last year, and that number is only expected to increase, with numbers projected to reach $23 billion by 2022. Some estimates reach even higher — ranging from $31 billion to an almost incomprehensible $130 billion.

With all those big numbers, smart companies are eager to find their place in the industry. An obvious play might be in retail, focusing on getting the highly sought-after products into the hands of eager consumers, whether it be in the medical field or adult-use recreational sector. However, in the world of cannabis, opportunities for a lucrative payday reach beyond simply selling products. In fact, the space between growers and sellers house a number of potential places for companies with expertise to firmly establish themselves in this burgeoning area of commerce.

Picks-and-Shovel Approach

This picks-and-shovel approach is the strategy employed by Youngevity International Inc. (NASDAQ: YGYI), a leading omni-direct lifestyle company that produces a range of consumer-focused CBD products. Recently, however, YGYI is extending its reach beyond offering products to the potentially lucrative areas of end-to-end processing and manufacturing.

With that in mind, the company completed its acquisition of Khrysos Global, a leading manufacturer of commercial hemp-based CBD extraction and post-processing equipment, and an end-to-end processor of CBD isolate, distillate, water-soluble isolate and water-soluble distillate. The company made headlines recently when it opened a turn-key manufacturing facility for various hemp-related finished products.

“We are excited to offer turn-key product solutions to our suite of services,” said Khrysos president Dwayne Dundore. “We believe this expands our competitive advantage within our hemp enterprise by covering all facets of product development to our growing list of clients. The relatively low minimum-order quantity capabilities of this operation combined with our comprehensive testing services should offer a unique value proposition for our customers and those seeking to enter this growing market opportunity.”

“The Khrysos Industries multi-dimensional business model is capable of providing turn-key solutions in this dynamic marketplace,” said YGYI president and CFO Dave Briskie. “The vertical integration of our hemp enterprise provides the potential of higher profit contribution as it leverages the other selling segments within our company. We anticipate expanding the capabilities within the coming months in order to more fully take advantage of these competencies throughout all facets of our business.”

Multidimensional Business Model Gaining Momentum

In addition to its turnkey product solutions, Khrysos just signed a five-year contract to purchase hemp plant biomass for extraction, processing and production of hemp-derived products. The supply contract with Magu Maiden Farms LLC notes that Khrysos will provide extraction services and end-to-end processing to produce isolate, water-soluble isolate, distillate, and water-soluble distillate hemp-derived products.

“We are excited to add this new long-term contract to our portfolio,” said Dundore. “We have strategically targeted multiple long-term relationships that we believe places Khrysos in a stronger position to leverage the expansion taking place within the post-processing area of our business.”

Based on this contract alone, YGYI anticipates extraction and post-processing fulfillment and revenues to begin in the fourth quarter of 2019, with revenues forecasted at $60 million through 2024 based on current market conditions and assuming, among other things, ability to secure buyers for the produced product and the supplier’s ability to supply the biomass for extraction and processing.

“The Khrysos Industries multidimensional distribution business model is gaining momentum,” said Briskie. “The team at Khrysos has executed multiple projects including the buildout and move to our post-processing facilities and the completion of our assembly operations. We continue to see that our pre- and post-processing expertise, combined with the capabilities of our analytical testing lab INX, provides a distinct competitive advantage within the hemp space.”

Gearing Up for Ten-Fold Increase in Capabilities

The momentum doesn’t end there. YGYI’s Khrysos Industries also inked an $11-million supply contract for the sale and processing of 99% pure CBD isolate powder earlier this year. Shipping under the contract began earlier this year and is expected to continue through March 2020.

“We are excited to reach the revenue stage for the end-to-end processing component of our business model,” said Dundore. “This contract encompasses 50% of our production capacity, and we anticipate executing contracts for the balance of our current capacity within the next few months. Based on customer demand, the company is moving forward to implement its plan to increase end-to-end processing capabilities ten-fold by 3Q 2019.”

“The Khrysos Industries business model is multi-dimensional, and we are just now starting to fully leverage the capabilities of our extraction systems, end-to-end processing platform, and the capabilities of INX Labs,” said Briskie. “We anticipate gearing up our production capabilities across the platform as we move through 2019.”

Making Headway in Cannabis

Other companies are making headway in the cannabis industry as well.

Through its newly announced partnership with C.A. Fortune, KushCo Holdings Inc. (OTCQX: KSHB) plans to offer the first large-scale, go-to-market operation focused on helping compliant CBD brands achieve mass distribution across legal markets in the United States. The combination of KushCo’s extensive network of brands and specific hemp-industry knowledge paired together with C.A. Fortune’s industry-leading reach into all retail channels may offer KushCo clients an additional avenue to activate their CBD products.

Indiva Limited (TSX.V: NDVA) (OTCQX: NDVAF) has successfully received an amended license from Health Canada for three additional grow rooms and three additional processing rooms, bringing the company’s annual cultivation capacity to approximately 1,000 kg. The three additional rooms will be immediately populated with plants, using advanced aeroponic grow technology, with the first harvest expected in less than 10 weeks. Indiva has completed the video-evidence package for an additional five rooms, including additional processing space, with the expectation for those rooms to come online in third quarter 2019, subject to Health Canada approval. Once all eight rooms are online, Indiva’s annual flower capacity will be approximately 3,000 kg.

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) announced that its wholly owned subsidiary, 9354-7537 Quebec Inc., has received a notification letter from Health Canada indicating that all requested license amendments have been approved. The approved amendments permit expansion of Neptune’s cannabis operation areas to include an additional extraction room for cold-ethanol extraction, which is faster and more cost-effective than the CO2 extraction currently used. The amendment will up Neptune’s input capacity from 30,000 kg to 200,000 kg., a seven-fold increase that allows the company to accelerate production and enable fulfilment of commercial commitments. The amendment also includes expansion for an encapsulation room where Neptune will produce cannabis-oil capsules.

In what has been called the largest public-company acquisition in the history of the U.S-cannabis industry, CannaRoyalty Corp. (CSE: OH) (OTCQX: ORHOF) has entered into a definitive agreement with Cresco Labs to form one of the largest vertically integrated, multistate cannabis operators in the United States. CannaRoyalty, dba Origin House, has become a leading distributor and providing of brand support services in the state of California, delivering more than 50 cannabis brands to more than 500 dispensaries in California, representing approximately 60% market penetration. The new agreement will result in the two companies forming the premier distribution company serving California, which is the largest cannabis market in the world.

For more information on Youngevity, visit Youngevity International Inc. (NASDAQ: YGYI)

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420 with CNW – Can the Pechoti Method Apply to Weed as Well?

Pecho…what? If you are hearing about the Pechoti method for the first time, you aren’t alone, although this mode of administration of alternative remedies isn’t new. It entails putting drops of essential oils on the belly button as a way of treating different conditions, including PMS, nausea and pain. Now some people have been suggesting that one can ingest cannabis oil in this way. But is this even possible?

What the Pechoti Method Is

As mentioned earlier, the Pechoti method refers to an old Ayurveda treatment method in which essential oils are dropped onto the belly button to combat different conditions.

The Pechoti method derives its name from the Pechoti gland which is said to exist right behind the belly button. This gland remains in existence even if an infant’s umbilical cord is cut, and the gland remains throughout one’s life, according to the believers in this method of treatment.

The advocates of this method reason that once a human is formed in the womb, all the nutrition goes through the umbilical cord until the baby is born. They argue that if a baby could entirely depend on what is coming through the umbilical cord, why shouldn’t an adult continue using this vital part?

How It Works

Doctors who believe in this treatment method, like Dr. Lakisha Jenkins, say that approximately 72,000 veins pass through the umbilical cord and continue to all parts of the body. This means that any oil that is placed on the belly button is eventually absorbed and circulated throughout the body.

Dr. Jenkins adds that the gastrointestinal tract contains multiple cannabinoid receptors. The gut also plays a critical role in our immune system as well as the central nervous system. When cannabis oil is applied to the belly button, it navigates its way to the whole body through the veins that pass through the belly button.

Who Should Use this Method?

Proponents of the Pechoti method say that it works in the same way as suppositories since both are systemic (work on the whole body rather than the small part where they are applied). Since the cannabis oil administered in this way isn’t metabolized in the liver, a user cannot get high.

Consequently, kids and people who are so ill that they cannot smoke marijuana or ingest it orally can benefit from the Pechoti method.

People with endocrine system disorders, nervous system problems, gastrointestinal issues and those with neurological complaints are some of the people who can try using the Pechoti method to administer their cannabis oil treatment.

However, the effectiveness of the Pechoti method for using cannabis oil is subject to one condition; one must use organic oil from a trusted source so that the risk of impurities entering your bloodstream is avoided.

Analysts believe that the cannabis industry players like Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) and Golden Developing Solutions Inc. (OTC: DVLP), must be amazed at how creative people have become in coming up with different ways to ingest cannabis.

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420 with CNW – Senate Committee Confirms Marijuana Banking Hearing Date

On Monday, we reported that a key senate committee would soon schedule a hearing on marijuana banking. Now the Republican-controlled committee on Banking, Housing and Urban Affairs has revealed that it will hold this hearing on Tuesday next week (July 23).

This announcement comes as yet another indicator that marijuana reform is gaining momentum at the highest levels of decision making in the country. The legislation to be discussed is geared at finding a solution to the challenges that marijuana businesses have been having regarding access to banking services.

A similar law, which was passed by a Congressional committee, now has almost half of the members of Congress as co-sponsors after 206 representatives signed on. The Senate companion bill so far has 32 senators signed on from a total of 100 senators in that chamber.

The senate hearing slated for Tuesday is titled “Challenges for Cannabis and Banking: Outside Perspectives.” Representatives of CUNA (Credit Unions National Association), Smart Approaches to Marijuana (a prohibitionist advocacy group) and Citywide Banks will testify during this hearing.

Jim Nussle, the CEO and president of CUNA remarked that his organization was willing and happy to work with senate leaders to find a solution to marijuana banking which is a public safety issue.

John Lord, the CEO of LivWell Enlightened Health (a marijuana retail chain) is also lined up to testify before the senate committee, as will Cannabis Trade Federation’s Neal Levine (who also testified before a sub-committee of Congress on how prohibition can be ended).

Sen. Cory Gardner (R-CO), the main GOP cosponsor of the Senate cannabis banking bill has also been booked to appear before the committee during this hearing.

Support for marijuana banking has been growing steadily with pressure being mounted for action on this matter by the highest financial sector regulators in 25 states, a huge majority of state attorneys general, 20 state governors from both sides of the political divide, banking associations from 50 states across the country and the National Association of State Treasurers. All these groups want the STATES Banking Act to be passed by Congress.

While Chairman Crapo is personally opposed to marijuana, his scheduling of the senate committee’s hearing on this matter shows that he recognizes that matters of cannabis banking present serious public safety concerns that have to be addressed soon rather than later.

Consensus is also growing on the need to make broader reforms to marijuana policy beyond access to banking services. The clearest example of this was the Congressional subcommittee hearing last week at which all parties agreed on the need for reform although there were some disagreements on how that reform can be realized.

Industry watchers believe that the entire marijuana industry, including Geyser Brands Inc. (TSX.V: GYSR) and Earth Science Tech Inc. (OTCQB: ETST), is now encouraged to believe that federal marijuana reform may happen soon.

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420 with CNW – New Jersey Starts Accepting Applications from Additional Marijuana Businesses

On Monday, the Department of Health in New Jersey announced that interested parties could start submitting their applications to grow and sell marijuana. Both nonprofit and for-profit entities are eligible to apply during this round of licensing.

Those planning to be growers or sellers of medical marijuana have until August 21 to submit their applications. New Jersey plans to license five additional cultivation facilities as well as 15 medical marijuana dispensaries. 4 licenses will also be granted to “verticals.” These are entities which are vertically integrated (they can cultivate, process and sell marijuana).

Entities that apply for the licenses will pay an application fee of $20,000 and those whose applications aren’t successful will get back $18,000 of that application fee.

All the people involved in the companies that apply have been notified that they will be subjected to a criminal background check. These people include directors, owners, board members and employees.

The interested companies are also expected to provide proof that the local authorities in the area where they wish to operate have given them approval to operate a marijuana business in that area.

Another requirement is that the companies must submit their security plans as well as an environment impact statement as they send in their applications.

All the companies that apply are expected to show that they have sufficient experience in the particular aspect of the industry for which they would like to be licensed. For example, aspiring growers must show they have experience cultivating medical marijuana. Quality assurance and quality control are important, so applicants are also required to submit their plans for these aspects of their operations.

While the state hasn’t imposed any minimum level of capitalization that aspiring industry participants should have, the applicants are nonetheless expected to provide proof that they have sufficient funding for the operations they wish to undertake. Funds should be available for the activities shown in their plans.

The state has also organized a pre-application webinar for all those interested on August 2. The Department of Health has revealed that people can submit the questions that they would like the department to address during that webinar. While it may not be practically possible to respond to each of the questions submitted, the state will address the issues that cut across the queries sent in.

This medical marijuana program expansion comes at a time when plans to legalize adult-use pot failed after advocates failed to secure ample support in the state senate and a vote on the matter was called off at the last minute. Analysts expect that the cannabis industry, including entities like Choom Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) and ChineseInvestors.com Inc. (OTCQB: CIIX), will take comfort in the fact that with the expansion of the medical cannabis program, patients will get solutions to many of the issues that they have been facing, such as lack of variety in the products available.

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420 with CNW – Marijuana Legalization Results in Fewer Illegal Grows in National Forests, Study Finds

New research shows that as marijuana started being legalized for recreational purposes in different states across the U.S., the reported cases of illicit grow sites within protected lands started falling.

The research findings, released in Ecological Economics, specifically point out that illegal grows on national forests saw a major decline in the Pacific Northwest after cannabis legalization started.

USDA’s Forest Service analyzed the available data on the illegal marijuana grow sites discovered and reported between 2004 and 2016. This data was in regard to 111 national forests. The researchers considered several factors, such as the retail price of pot, state laws, risks of being discovered running an illegal grow site, and many others.

The researchers then used that data to create six different simulations of what would happen to the number of illegal grows if marijuana policies changed.

For example, one simulation seeks to see how the number of these illegal grows would change if all the state laws legalizing both medical and recreational cannabis were revoked. Another simulation explores what would happen assuming that all the taxes on the legal marijuana on the market were waived/eliminated.

The researchers found that policies legalizing some form of marijuana are linked to a reduction in the number of reported cases of illegal grow sites within national forests.

The predictive models of the research also show that if the existing medical and recreational marijuana laws in different states were to be revoked, then the rate at which illegal grow sites would be discovered is likely to grow by double digit percentages while expanding the number of states with laws legalizing marijuana would reduce such grows by at least a fifth, as per the available 2017 data.

For example, if all the 23 states that had enacted medical cannabis laws by 2016 enacted recreational marijuana legalization laws as well, then the illegal grows within those areas would reduce by at least 35 percent and as high as 51 percent.

While the researchers found that marijuana decriminalization didn’t have any effect on illegal grows, they discovered that imposing harsher penalties on those convicted on charges related to illegal marijuana cultivation activities had an effect of reducing the number of illegal grows. Increasing law enforcement personnel in the national forests only had a negligible effect on the stats, according to the research.

The study concludes that of the two ways (legalization and increased enforcement) to reduce illegal grows in forests, legalization offers a more cost-effective way to preserve the forests from the attendant problems, such as the use of strong rodenticides, which come with the illegal grow sites.

Analysts think industry players like Chemistree Technology Inc. (CSE: CHM) (OTCQB: CHMJF) and Canopy Rivers Inc. (TSX.V: RIV) (OTC: CNPOF) aren’t surprised by the findings of this research since the cannabis industry has always asserted that legalization can stamp out the black market and its risks.

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With 10,000 Licenses Issued, California Reflects the Growing Power of Hemp

CannabisNewsWire Editorial Coverage: As hemp production increases, Californian legislators have extended the duration of thousands of cannabis cultivation licenses to support the state’s thriving industry.

Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) is supporting many of these companies that have cultivation licenses by providing cultivation and extraction equipment. Canopy Growth Corporation (TSX: WEED) (NYSE: CGC), one of the biggest companies in the sector, is increasing its growing capacity while helping educate about medicines. Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) is leaning into new technology, with new facilities for R&D and processing. The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF) (TGODF Profile) has tapped into the demand for organic produce and is now expanding into global CBD market. GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF) is developing powerful new medicines, in which hemp could help tackle previously uncurable illnesses.

California is one of the largest regions for cannabis and hemp cultivation.
Recent legislative moves show that the state’s politicians are hemp friendly.
Demand for hemp and cannabidiol (CBD) continues to soar.
Companies are responding with increased production, acquisitions and new technology.

To view an infographic of this editorial, click here.

The Land of Mass Licensing

The past year has seen substantial growth in the Californian hemp industry, and with that growth came challenges for the state’s governing bodies. The state is home to one of the largest legalized recreational cannabis markets in the world, and Californian authorities have reportedly issued over 10,000 licenses to producers, processors and retailers involved in the cannabis industry. This includes those working with hemp, a non-psychotropic form of cannabis, and CBD, a chemical derived from hemp.

The swift growth of the state’s industry almost triggered a crisis this spring, as thousands of temporary licenses were set to expire before authorities had time to process permanent licenses. The state senate stepped in to extend the duration of temporary licenses and protect law-abiding business owners from a bureaucracy struggling to keep up with demand.

The legal move to extend the licenses may indicate the state’s political attitude toward the industry and holds promise for companies working in California.

A Friendly Place to Work

For companies working with hemp and related products, California is possibly the most business-friendly place in the world to be based. The state is headquarters for a wide range of companies working in the sector, from producers and retailers to companies providing support services, such as Sugarmade Inc. (OTCQB: SGMD).

Based in Monrovia, California, Sugarmade develops brands and products with disruptive potential. Over the past few years, this strategy has led the company to develop a growing focus on hemp and the surrounding sector, a space filled with innovation, fast-developing new practices and promising potential.

Rather than being cultivator or retailer, however, Sugarmade is a supplier of vital materials to the hemp industry. The company sells hydroponic equipment and supplies needed for growing consistent, high-quality crops in secure, climate-controlled indoor facilities. SGMD is moving deeper into the market by extending its catalog to include extraction equipment, essential in the process of acquiring valuable CBD from hemp plants.

California is home to so many of these companies for a number of reasons. The state is one of the largest markets in the world by population for hemp and related products, with only Canada matching it in scale. In addition, California is one of the first areas to become friendly to the industry, passing groundbreaking legislation in the 1990s allowing the space to progress.

This attitude has been both supported and encouraged by a political establishment that appears to look favorably on the industry. The Californian senate, having seen thousands of new businesses such as Sugarmade spring up, is eager to nurture these entities for the jobs and wealth they bring to the state’s economy. This general support is reflected in the government’s decision to extend temporary licenses to prevent new businesses from faltering just as they had been established.

Staggering growth has caused challenges for the Californian authorities in providing licenses. The federal legalization of hemp in December added to interest in the industry and pressure on the licensing system. The state’s responsiveness to problems within the system has shown how serious it is about hemp and creating a friendly environment for the likes of Sugarmade and its customer base.

The Hemp Revolution

The situation in California appears to reflect a much wider pattern in the hemp industry, across the United States and beyond.

Ten years ago, hemp was barely even mentioned in conversations about business. As a source of useful materials, its use had fallen out of fashion with the end of the age of sail, during which it had provided fibers for ropes and canvas. But then a shift came, as companies in the cannabis space looked for other options they could market. As a nonpsychoactive ingredient, CBD could be sold in markets where cannabis itself couldn’t. And hemp offered a rich source of CBD without many of the complications surrounding the rest of cannabis.

Since then, demand for CBD has rocketed. The component is used in a wide range of products including cosmetics, health foods, and vaping liquids. Companies have emerged specifically to cater to the hemp market, and those companies have turned to the likes of Sugarmade for the equipment they need.

The popularity of CBD among consumers has also rocketed, leading to shortfalls in supply. The 2018 Farm Bill, which legalized the hemp trade at the federal level in the United States, will help with meeting this demand in the long term. But the bill is no magic bullet, and companies need time to gear up in the new commercial environment that has been created.

This gearing up has led to increased demand for cultivation equipment, creating shortages in that area. Cultivators have bought everything that Sugarmade can provide, as hydroponics companies see a boom in sales alongside the hemp companies they serve.

Dealing with Demand

Sugarmade has made a variety of moves — in California and beyond — to meet this growing demand.

Expansion is obviously critical to making the most of this opportunity, and the company has entered a period of serious growth in its sales, product lines and bottom line. As a critical link in the hemp supply chain, Sugarmade is not just in a position to grow, the company must grow in order to meet customer needs.

One of the key tactics in this expansion has been SGMD’s use of acquisitions and agreements. The company acquired Sky Unlimited LLC and, through it, the AthenaUnited.com online sales operation, increasing its sales capacity. Sugarmade has also struck deals with companies such as Hempistry, BizRight Hydroponics and Plantation Corp, ensuring smooth supply chains and greater capacity to meet surging demand.

Adding new technology to its catalog has allowed Sugarmade to make better use of this moment. The company is moving to supply next-generation extraction machinery and develop artificial intelligence systems to monitor hemp crops. By providing its customers with the latest technology, Sugarmade may be better able to distinguish itself from its competitors and ensure the profitability of its customers, for its own long-term good.

Space for Growth

With customer demand firmly outstripping supply, the hemp sector is creating a space in which a wide range of businesses can flourish.

One of the most important is Canadian company Canopy Growth Corporation (TSX: WEED) (NYSE: CGC), which was the largest cannabis company in the world by market capitalization as of April this year. Like Sugarmade, Canopy Growth Corporation has taken big steps to continue expanding and claim a larger share of the hemp and related markets. The company has increased its production capacity through a mixture of acquisitions and ongoing work to increase its existing licensed production facilities. Acquisitions have also featured in its work further down the supply chain, such as acquiring hemp skin care company This Works.

Like Sugarmade, Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) is looking to new technology to support its expansion. The company recently announced the creation of an R&D facility, which has the potential to provide new products for a curious and often experimental customer base. To support such innovations, the company is also acquiring a state-of-the-art fermentation and manufacturing facility, which will allow Cronos to produce cultured cannabinoids.

The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF) has focused on a specific sector of the customer base, setting itself up as a source of organic and sustainably grown products. The creation of two new production facilities will allow the company to tap into rising demand, increasing its growing capacity from 156,000kg to 202,500kg. And with the growing popularity of hemp-CBD products, the company is setting up a global strategic hemp division to give it greater global reach in an important part of the sector.

GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF) is applying the power of cannabidiol to tackle otherwise untreatable diseases. The company’s 20 years of experience in the sector is currently being applied to seizures associated with tubular sclerosis complex, for which one of its drugs recently underwent successful clinical trials. GW has become a world leader in cannabinoid medicines, whose value is increasingly widely recognized.

With hemp and related sectors growing so fast, California’s senators appear to have made a wise decision to smooth the way for local cultivators. Both customers and businesses in the state and beyond may see the benefits.

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

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Waves of CBD Beauty Products Filling Shelves of Major Retailers Across the US

CannabisNewsWire Editorial Coverage: Mainstream retailers across the United States are embracing the growing popularity of the nonpsychoactive cannabinoid, cannabidiol (CBD), making room for CBD products on their prominent shelves.

With the rise of these cannabis beauty products, major stores from luxury retailers Barney’s and Neiman Marcus down to Walgreens, Rite Aid and now Kroger are stocking products from a range of CBD SKU producers, including Green Growth Brands (CSE: GGB) (OTCQB: GGBXF) (GGBXF Profile), Charlotte’s Web Holdings (TSX: CWEB) (OTCQX: CWBHF), CannTrust Holdings Inc. (TSX: TRST) (NYSE: CTST), Organigram Holdings Inc. (TSX.V: OGI) (NASDAQ: OGI) (OGI Profile) and HEXO Corp. (TSX: HEXO) (NYSE American: HEXO).

Bridge-building companies strengthening bonds between retailers and CBD producers.
GGB has solidified several influential deals with top companies.
Cannabis beauty products could make multibillion-dollar impact in the CBD sector.

To view an infographic of this editorial, click here.

Partnerships Key to CBD Growth

The bond between retailers and CBD producers seems to be growing stronger by the month, ushered forward by bridge builders such as Green Growth Brands (CSE: GGB) (OTCQB: GGBXF), whose management team’s CVs read like that of a mall directory, including executive-level experience with major brands such as American Eagle Outfitters, Abercrombie & Fitch, Bath & Body Works, Victoria’s Secret, DSW, Luxottica and Virgin Entertainment.

These relationships have already resulted in GGB inking a series of deals with major retailers, most recently with American Eagle Outfitters. Starting in October 2019, the clothing retailer will be carrying GGB’s hemp-derived, CBD-infused personal care products in almost 500 physical stores as well as on the company website. These products — which include lotions, muscle balms and aromatherapy items — were developed exclusively for American Eagle.

Two weeks prior to the American Eagle announcement, GGB expanded its partnership with Abercrombie & Fitch to offer its Seventh Sense Botanical Therapy CBD products through the iconic fashion brand. The growing popularity of CBD products such as Seventh Sense has led analysts to increase their targets on the cannabis industry as a whole.

Back in March, New York-based investment bank Cowen & Co. put out a study on the CBD market, citing a $16 billion target by 2025. BDS Analytics and Arcview Market Research gave a more optimistic assessment, projecting that the collective market for CBD sales in the US will exceed $20 billion by 2024.

Welcoming the CBD Retail Revolution

Perhaps the most impactful addition to the CBD sector is the rise of “cannabis beauty.” Analysts at Piper Jaffray believe the cannabis beauty wave could potentially boost the overall CBD market to between $50 billion to $100 billion.

In July, American Eagle agreed to stock the shelves of nearly 500 stores with Green Growth Brands’ tailor-made, CBD-infused personal care products. The new line of products will be available as early as October and will be available for purchase online as well.

In late June, fashionable brand Abercrombie & Fitch expanded its partnership with Green Growth Brands to sell Seventh Sense Botanical Therapy products in more than 160 A&F stores. After a retail trial in 10 stores, the increase in exposure is expected to be mutually beneficial as A&F carries Seventh Sense’s CBD-infused body lotions, muscle balms, lip balms and sugar scrubs.

The American Eagle and A&F placements supplemented the string of partnerships Green Growth Brands has secured so far in 2019, which began with a partnership with DSW Inc. to sell Seventh Sense in 96 U.S.-based DSW stores. GGB also signed a licensing agreement with Authentic Brands Group and the Greg Norman brand to develop CBD personal care products for active adult men and women.

With its management team’s impressive retail experience, much of which is centered around prominent space in malls, GGB has aggressively launched its own Seventh Sense stores and kiosks across the country. In just the first four months after launch, over 50 Seventh Sense stores had been opened by June.

GGB’s goal is to have approximately 70 stores opened by the end of 2019. Given the company’s seemingly advantageous deals with major mall chain owners such as Brookfield Properties, Simon Property Group, and a series of independent malls, it appears likely the company will hit this target.

In a recent interview with Jim Cramer, CNBC host of Mad Money, GGB CEO Peter Horvath confidently reiterated his company’s strategy that plays off its retail expertise, and in particular the potential of CBD, specifically topical products. Harvath noted that the partnerships in place mean that GGB stores are opening in prime locations in some of the country’s best malls.

Developments in the CBD Upswing

This potential isn’t being missed by other CBD innovators in the market.

Early pioneers in the CBD space, Charlotte’s Web Holdings (TSX: CWEB) (OTCQX: CWBHF) now manufactures and markets CBD wellness products, including capsules, topicals and gels in more than 3,000 retail locations across the country. Named after a little girl named Charlotte who suffered from up to 300 grand mal seizures per week, the company is focused on what ended up being a cure for her malady — CBD. The brothers who manufactured the strain that helped Charlotte went on to found Charlotte’s Web in 2013. As recently as December 2018, CWEB products were available in 3,680 retail locations. That number has since exploded to 6,000.

CannTrust Holdings Inc. (TSX: TRST) (NYSE: CTST) increased its portfolio by expanding its CBD product lines with the addition of three new products: high-dose CBD oil capsules and a low-dose and high-dose version of CBD drops. In addition, the company recently announced plans to enter the U.S. CBD market, starting with a hemp-production joint venture in California. As part of the deal, CannTrust plans to cultivate upwards of 3,000 acres of hemp for CBD in California. CannTrust continues to develop its lines of innovative products, including CBD beverages, pet-care products and confectionaries.

North of the border, East Coast Canadian company Organigram Holdings Inc. (TSX.V: OGI) (NASDAQ: OGI) is developing a nano-emulsion technique to help cannabinoids such as CBD to dissolve in water, which isn’t done naturally. Organigram has recently developed an emulsification system to turn cannabinoids into a dissolvable powder, making CBD more shelf stable, thermally stable, water compatible and palatable. Focusing outside of the United States and its home jurisdiction of Canada, Organigram Holdings Inc. is making a play to jump the pond into what’s being touted as a lucrative EU CBD market. Teaming with Alpha-cannabis, Organigram has its sights set on the German medical cannabis market, while also partnering with Eviana to obtain hemp-derived CBD to supply into key EU markets.

HEXO Corp. (TSX: HEXO) (NYSE American: HEXO) is also in the development of beverages through its partnership deal with Molson Coors. Aligned with the Canadian brewing giant, HEXO is gearing up for cannabinoid-infused beverages that could one day be sold in the refrigerated aisle of the local grocer. HEXO also recently outlined plans to enter eight U.S. states with CBD products — but not until 2020. The company wouldn’t say which states it is targeting, but expectations are that it will make the move through its joint venture with Molson Coors, which includes plans to co-launch a portfolio of cannabis-infused beverages called Truss.

Key relationships and a promising cannabis beauty space bode well for continued strong growth in the CBD sector. Companies such as Green Growth Brands appear well positioned to take advantage of these opportunities.

For a free research report on Green Growth Brands, visit PotStockNews.com

For more information on Green Growth Brands, visit Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF)

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