Tag: ACB.TO

420 with CNW — Medical Marijuana Shares Off to a Great Start on London Stock Exchange

Marijuana shares in the UK have been rising quickly, with investors now looking toward a new investment class in the market: medical marijuana shares.

Last week, MGC Pharma, which is London’s first marijuana stock, debuted on the London Stock Exchange. The firm raised £6.5 million ($9 million) on its premiere, with the stock moving to 4.25p (59 cents) a share from a 1.475p (25 cents) per share opening price. This left the company with a market cap of more than £75 million ($104 million).

In a way, the increase in the London stock mirrored the American market, when investors from Reddit’s r/WallStreetBets forced the price of various marijuana stocks to rise on the back of an Aphria and Tilray merger. The likelihood of President Joe Biden’s administration federally legalizing the marijuana industry has also helped.

Tilray Inc. (NASDAQ: TLRY) rose by 50%, which added more than $2 billion in value to the company’s stock. This upped the company’s yearly gains to more than 670%. Other companies that have recorded significant gains this year are Aurora Cannabis Inc.  (NYSE: ACB) (TSX: ACB), which has increased by more than 120% so far; Aphria Inc. (NASDAQ: APHA), which was up by 280%; and Canopy Growth Corp. (TSX: WEED) (NYSE: CGC), which rose by 110%.

So far, London has been slow to launch medical marijuana IPOs. However, following MGC Pharma’s remarkable reception last week after a two-year campaign by Memery Crystal, a London law firm, attitudes may at last be changing.

Up until now, regulators and banks were concerned that marijuana businesses would be seen as almost-criminal enterprises; turns out, this may not be the case. Memery Crystal CEO, Nick Davis, who is also an advocate campaigning for the medicinal use of marijuana, stated that after MGC Pharma’s successful IPO, he received calls from America, Canada and Israel, all from companies that wanted to list in the United Kingdom.

Over in the United States, medical marijuana is legal in 30 states. Projections from Prohibition Partners show that by 2024, the country’s market will be valued at $37.9 billion. The firm also estimates that by 2024, nearly 340,000 patients in the UK will be using marijuana treatments. Additionally, their research states that by 2024, UK’s legal marijuana market will be valued at nearly £2.3 billion.

In the UK, research focused on the medical applications of marijuana is still in the early stages. Many are hopeful, however, that London may soon become the right place for the growing marijuana market to raise funds to finance further medical studies and research. However, advocates are still emphasizing that the whole point of this is not to help individuals get high but to help manage pain and relieve human suffering.

Furthermore, guidelines from the National Institute for Health Care and Excellence asserted that the medication from MGC Pharma was effective, which assisted in moving things along.

Back in the States, Gage Growth Corp. (d.b.a. Gage Cannabis) , which operates within the Michigan marijuana market, has initiated a number of steps intended to grow its brand. For example, the compamy has exclusive brand partnerships with some of the most recognizable brands, such as Cookies, across the country. Such partnerships are likely to see the company grow more rapidly than its competitors.

NOTE TO INVESTORS: The latest news and updates relating to Gage Growth Corp. (d.b.a. Gage Cannabis) are available in the company’s newsroom at https://cnw.fm/GAGE

About CNW420

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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Savvy Companies Eye Promising Potential in Multi-Billion-Dollar Industry

CannabisNewsWire Editorial Coverage: A recent Data Bridge Market Research report notes that the once-hot cannabis industry looks to be heating up again — in a big way. The report includes predictions that the global legal marijuana market will total more than $90 billion by 2027. Smart companies are jostling for a strong position in this explosive space, looking to leverage their expertise to capitalize on opportunities the multi-billion-dollar sector provides. Recognizing key challenges in the industry, including availability of often subpar quality of available product along with the high cost of development and land acquisition, Pac Roots Cannabis Corp. (CSE: PACR) (PACR Profile) is focusing on its state-of-the-art genetics to ensure  production of premium-quality products. In addition, the company is relying on science and key strategic partnerships to eliminate quality and cost barriers to success. Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) has received regulatory approval for its acquisition of one of 10 vertically integrated licenses in New York while Tilray Inc. (NASDAQ: TLRY) has received complete GMP certification at its EU campus. Aurora Cannabis Inc.  (NYSE: ACB) (TSX: ACB) has almost completed the first phase of a business transformation focused on setting up the company for success in this burgeoning space. And in the medical-use sector, Arena Pharmaceuticals Inc. (NASDAQ: ARNA) is pursuing a significant unmet opportunity for a targeted IBS pain treatment using olorinab, a peripherally acting, highly selective, full agonist of the cannabinoid receptor 2 (CB2).

  • Absolute access to one of Canada’s largest live, genetic cannabis library provides PACR with more than 350 lab-tested, field-tested cultivars.
  • Superior flowers are key to producing superior cannabis products.
  • Pac Roots chooses best outdoor growing climates in Canada for its growing cultivation operations.

Click here to view the custom infographic of the Pac Roots Cannabis Corp. (CSE: PACR) editorial.

Delivering the Best

While it may seem obvious, the availability of high-quality flowers is essential to the process of producing high-quality cannabis products. Yet as demand for cannabis products has increased and more companies have entered the flourishing space, the quality of raw cannabis product may actually be slipping as companies focus more on market share than quality.

Pac Roots Cannabis Corp. (CSE: PACR) is committed to delivering the finest cannabis genetics to its customers, preserving the superiority of its carefully cultivated elite strains while also working to introduce unmatched new strains. While some companies may work to be the largest cannabis grower, Pac Roots believes that product quality is paramount. With demand for premium products at an all-time high, Pac Roots is dedicated to becoming a leader in the premium-cannabis space.

The company achieves this objective in part through its strategic licensing agreement with Phenome One Corp, which gives Pac Roots complete access to one of Canada’s largest live, genetic cannabis library with both field- and lab-tested, selectively bred cultivars. Pac Roots utilizes the cultivars in the Phenome One library to grow, breed and clone its own distinctive brands. Through vigilant breeding and cultivation, Pac Roots offers everything from CBD-dominant plants with rare terpene profiles and soaring 30%-plus THC giants to West Coast outdoor, botrytis-resistant plants.

Pac Roots and Phenome One are developing exclusive strains with several beneficial characteristics. The impressive catalog consists of more than 350 tested cultivars; approximately 50 are in the super-elite category. The aim for the partnership is to offer the highest-quality cultivars that have been proven and tested under variable commercial conditions to provide the greatest resilience. The two companies share a dedication to delivering rich THC and CBD cultivars with unique terpene profiles while continuing to attain industry-leading GPW yield.

Key to Quality Cannabis

Superior genetics isn’t the only key to cultivating quality cannabis. Optimized farming systems are crucial in the pursuit of quality product. Pac Roots works closely with carefully selected partners to improve cultivation through proprietary methods, including the following fundamental components:

  • Nutrients are custom formulated from raw salts for specific cultivars.
  • Systematic planting of young, hardy cultivars, measuring up to 18 inches, which provides maximum opportunity for growth and resilience.
  • Row compaction and mowing for weed control, enabling a selected harvest
  • Complex irrigation systems with direct-nutrient and spring-water delivery to each plant site.

In addition to observing tested and refined cultivation methods, Pac Roots carefully selected its cultivation sites, focuses its operations on the finest outdoor growing climates in Canada, including the South Okanagan Valley and the Fraser Valley Regional District.

Golden Mile Cultivation

Known as the Golden Mile and now referred to as the Napa Valley of the North, the South Okanagan Valley in British Columbia is the location of Rock Creek Farms, a 100-acre, premium-hemp, joint venture that Pac Roots started in May 2020 after receiving its hemp cultivation license from Health Canada.

Planting began in June when approximately 130,000 premium-hemp CBD seedlings, which had been sown earlier in greenhouses to ensure optimum growth and reduce environmental impact, were systematically planted across two 50-acre parcels. With harvesting projected to begin in October, the hemp plantation crop is expected to be between 500,000 and 700,00 pounds of biomass; 100% of that yield is already under contract with a processor at fair market value.

“It has been a busy for months since listing on the CSE in early May 2020,” said Pac Roots CEO Patrick Elliott. “We are proud to have a healthy crop and remain bullish on delivering a premium, high-yielding product to our customer. In early 2020, we had a goal of becoming a revenue generator in 2020 as market appetite was evolving towards a cash flow scenario and realizing on projected forecasts as paramount to survival in this industry. We are privileged to be involved with our strategic partners at Rock Creeks Farms, Phenome One and Speakeasy Cannabis Club as a production scenario in our first year of operation would not have been possible without the generous leasing of land, equipment, licenses, infrastructure, genetics, operations team, management and expertise to round off the joint venture.”

Fraser Valley Production

In addition, the company is slated to soon complete a share purchase agreement of 250 acres of prestigious land in the Fraser Valley Regional District (FVRD) of British Columbia. The agreement, made with 1088070 BC. Ltd. outlines Pac Roots’ plans to acquire all of the issued and outstanding shares of 1088, which owned nine parcels of pristine property in FVRD, one of the most productive and intensively farmed areas in Canada. The area offers the finest soil, a favorable climate, ample water and a local market of an estimated 2.5 million people. Agriculture in this region yields an annual economic value of more than $3 billion.

“The addition of such a substantial package of land to our portfolio is a major step for Pac Roots,” said Elliott. “We are pleased to have the opportunity to add significant acreage with an acquisitional cost base of $9,600 per acre. This land has no zoning restrictions and is not situated within the Agricultural land reserve, which provides for infinite development possibilities.”

The acquisition of the 250 FVRD acres combined with the 100-acre hemp joint venture in Rock Creek, along with the company’s plans for an indoor cultivation facility in Lake Country, British Columbia, demonstrates a long pipeline of development projects for Pac Roots. Through these recent achievements, the growing company is confirming its ability to optimize cultivation with seasoned expertise. Its commitment to maximizing yield while lowering production costs seems evident throughout Pac Roots’ strategic growth plan.

With demand for superior cannabis products only expected to increase as large-scale growers appear incapable of delivering a premium-grade flower, Pac Roots looks to have firmly established its focus on offering the best crops available and developing the future of genetics. “Preserving the excellence of our elite strains while introducing the highest quality of new strains to the public is our passion,” the company’s website declares, and its recent activity in the cannabis market looks to support that mission.

Becoming Cannabis Players

While Pac Roots is distinctive in its approach and commitment to quality, it isn’t the only company vying for market share in the flourishing cannabis sector.

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) announced that it has received regulatory approval for its acquisition of 100% of the membership interests of Gloucester Street Capital, the parent entity of Valley Agriceuticals LLC, via a merger between Gloucester and an indirect subsidiary of Cresco Labs. Valley Agriceuticals holds one of the 10 vertically integrated cannabis business licenses granted in the State of New York by the New York State Department of Health. Each license gives the operator the right to operate one cultivation facility and four dispensaries in New York. The acquisition is expected to close by the end of August.

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) recently released an update on its business operations, including the announcement of a new CEO, Miguel Martin. “Over the last six months, Aurora has focused on building the infrastructure and capabilities necessary for a successful and diversified business,” said Aurora executive chairman and interim CEO Michael Singer. “The first phase of our business transformation, which is now substantially complete, included the rationalization of our cost structure, reduced capital spending, and a more prudent and targeted approach to capital deployment. As a result, we now have a far more efficient asset base and infrastructure to supply our key global markets. I am delighted to now be transitioning the CEO responsibilities to Miguel, and I am confident that Aurora is in a strong position to succeed under Miguel’s leadership.”

Tilray Inc.’s (NASDAQ: TLRY) wholly owned subsidiary Tilray Portugal Unipessoal Lda. has received a Good Manufacturing Practice (GMP) certification in accordance with European Union standards, for its manufacturing facility in Cantanhede, Portugal. The certification expands the company’s international export capacity to serve authorized medical cannabis markets and  provides authorization to complete medical cannabis extraction on-site as well as produce bulk extracts for the manufacture of medical cannabis oil as a finished product. The certification signals another milestone for Tilray’s EU campus, which serves as the company’s  international medical cannabis hub.

Another player in the medical space is Arena Pharmaceuticals Inc. (NASDAQ: ARNA). The company has recognized a significant unmet opportunity for a targeted IBS pain treatment and is involved in a Phase 2, placebo-controlled, parallel-group study to evaluate the safety, tolerability, and efficacy of olorinab in patients with irritable bowel syndrome who are experiencing abdominal pain.

In an industry anticipated to top $90 billion by 2027, strategic steps taken by companies operating in the cannabis space appear to reinforce the sector’s promising future. Companies that focus on high-quality products through genetics while controlling costs could reap outsized market rewards  as the sector continues to grow and mature.

For more information about Pac Roots, please visit Pac Roots Cannabis Corp. (CSE: PACR).

About CannabisNewsWire

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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CannabisNewsBreaks – technical420 Highlights Five Emerging Must-Watch Cannabis Markets

A recent editorial by Anthony Varrell of technical420 reviews five emerging cannabis markets suggested as “need-to-watch” for investors in 2020.  These include Colombia, Uruguay, Australia, Israel and China.  The publication also highlights companies that are laser-focused and positioning for opportunity within these markets, including Chemesis International Inc. (CSE: CSI) (OTCQB: CADMF) (FRA: CWAA) and its wholly owned subsidiary La Finca, Aurora Cannabis (TSX: ACB) (NYSE: ACB) and its ICC Labs, Aleafia Health (TSX: ALEF) (OTCQX: ALEAF) and  CannaPacific, Tilray, Inc. (NASDAQ: TLRY) and Canndoc Ltd., a wholly owned subsidiary of InterCure Ltd. (OTC: IRCLF) (TASE: INCR), as well as Canrim Growth Group, CGA and NSG. “From Australia to South America, from Europe to Africa, countries all over the world are enacting pro-cannabis legislation and this is a trend that is expected to become more significant in 2020,” Varrell writes. “Today, we want to highlight 5 emerging international markets as well as companies that are focused on these burgeoning opportunities.”

To view the full article, visit http://cnw.fm/uxGg6

About technical420

Technical420 is dedicated to educating investors about the risk and rewards of investing in the cannabis industry. It highlights companies that have the most growth potential by utilizing its proprietary analytics platform. For more information, visit www.technical420.com.

About CannabisNewsWire

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.

To receive SMS text alerts from CannabisNewsWire, text “CANNABIS” to 21000 (U.S. Mobile Phones Only)

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CannabisNewsBreaks – technical420 Highlights Three Cannabis Stocks it Believes are Well Positioned to Rebound from 2019 Vape Crisis

A recent articlel by Anthony Varrell of technical420 reviews the 2019 vaping health crisis that put tremendous pressure on the entire sector, as well as companies believed to be well positioned to rebound. These include 1933 Industries (CSE: TGIF) (OTCQX: TGIFF), Aurora Cannabis (TSX: ACB) (NYSE: ACB) and Vext Science (CSE: VEXT) (OTCQX: VEXTF). “During the last few years, we have been closely following the vape market and have been identifying leaders in the high-growth vertical. During this time, we have seen public companies come in and consolidate the vape market and have been favorable on this trend,” Varrell writes. “Although we have been favorable on these acquisitions, the companies that focused on the vape opportunity were especially impacted by the vaping health crisis. We believe that the recent weakness is overdone and believe that these companies are well positioned to record strong growth in 2020 and beyond.”

To view the full article, visit http://cnw.fm/I2Bzj

About technical420

Technical420 is dedicated to educating investors about the risk and rewards of investing in the cannabis industry. It highlights companies that have the most growth potential by utilizing its proprietary analytics platform. For more information, visit www.technical420.com.

About CannabisNewsWire

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.

To receive SMS text alerts from CannabisNewsWire, text “CANNABIS” to 21000 (U.S. Mobile Phones Only)

For more information please visit https://www.CannabisNewsWire.com

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

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CannabisNewsBreaks – technical420 Highlights Three Canadian LPs that Appear Well Positioned in Burgeoning Cannabis Industry Despite Pressure from Recent Earnings

According to a recent technical420 article written by Anthony Varrell, several leading Canadian cannabis companies have reported quarterly financial results during the last month, and, on average, the market has been responding negatively to the numbers. Although these companies have reported strong growth compared to prior periods, the market has reacted negatively due to numbers that have come in below expectations. The article indicates that the cannabis industry looks to be well positioned to record strong growth going forward. It further highlights three Canadian cannabis producers, including Aleafia Health (TSX: ALEF) (OTCQX: ALEAF), Canopy Growth (TSX: WEED) (NYSE: CGC) and Aurora Cannabis Inc. (TSX: ACB) (NYSE: ACB), that technical420 believes that, going forward, are well positioned to capitalize on the burgeoning global cannabis industry.

To view the full article, visit http://cnw.fm/5r3tL

About technical420

Technical420 is dedicated to educating investors about the risk and rewards of investing in the cannabis industry. It highlights companies that have the most growth potential by utilizing its proprietary analytics platform. For more information, visit www.technical420.com.

About CannabisNewsWire

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.

To receive SMS text alerts from CannabisNewsWire, text “CANNABIS” to 21000 (U.S. Mobile Phones Only)

For more information please visit https://www.CannabisNewsWire.com

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

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CannabisNewsBreaks – Three Canadian Licensed Producers with Price Target Downgrades

A technical420 editorial published today and written by Anthony Varrell highlights details regarding three Canadian Licensed Producers (“LPs”) with price target downgrades. The cannabis sector, yesterday, recorded one of its best trading days of the year, coming after Aphria Inc. (TSX: APHA) (NYSE: APHA), a leading Canadian LP, released first quarter financial results. According to the update, one of the reasons the move caught attention is because it comes after heavy pressure on the cannabis sector. Canadian LPs such as Aphria have been some of the most impacted during this time. The article goes on to highlight some of the recent price target changes on Aphria, Canopy Growth Corp. (TSX: WEED) (NYSE: CGC) and Aurora Cannabis Inc. (TSX: ACB) (NYSE: ACB), indicating these three Canadian LPs are trading well below the average price target issued by the listed broker-dealers.

To view the full press release, visit http://cnw.fm/OOmf3

About Technical420

Technical420 is dedicated to educating investors about the risk and rewards of investing in the cannabis industry. It highlights companies that have the most growth potential by utilizing its proprietary analytics platform. For more information, visit www.technical420.com.

About CannabisNewsWire

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.

To receive SMS text alerts from CannabisNewsWire, text “CANNABIS” to 21000 (U.S. Mobile Phones Only)

For more information please visit https://www.CannabisNewsWire.com

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

Do you have a questions or are you interested in working with CNW? Ask our Editor

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303.498.7722 Office
Editor@CannabisNewsWire.com

CannabisNewsAudio – Sugarmade, Inc. (SGMD) Contributes to the Thriving Kentucky Hemp Market

Related Editorial
Hemp may be taking the first steps to overtake tobacco as a leading industry in Kentucky.

Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) is among the companies moving into Kentucky, with a million-dollar investment in hemp growth. Hemp’s national prominence is growing through deals such as Aurora Cannabis Inc.’s (TSX: ACB) (NYSE: ACB) collaboration with United Fighting Championship (UFC). Research work by Tilray Inc. (NASDAQ: TLRY) may involve using hemp to treat a growing range of physical and mental ailments. Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) is serving states without a strong, homegrown hemp industry, such as Florida. In addition, companies across the cannabis sector, such as Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON), are diversifying their product ranges as more hemp crops come online.

To hear the CannabisNewsAudio version, visit http://cnw.fm/FPq1f

To view the full editorial, visit http://cnw.fm/us4V5

About Sugarmade Inc.

Sugarmade Inc. is a product and brand marketing company investing in products and brands with disruptive potential. For more information, visit the company’s website at www.Sugarmade.com.

NOTE TO INVESTORS: The latest news and updates relating to SGMD are available in the company’s newsroom at http://cnw.fm/SUGAR

About CannabisNewsWire

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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Hemp Set to Overtake Tobacco in Kentucky Amid Boom for Growers, Suppliers

CannabisNewsWire Editorial Coverage: Hemp may be taking the first steps to overtake tobacco as a leading industry in Kentucky.

Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) is among the companies moving into Kentucky, with a million-dollar investment in hemp growth. Hemp’s national prominence is growing through deals such as Aurora Cannabis Inc.’s (TSX: ACB) (NYSE: ACB) collaboration with United Fighting Championship (UFC). Research work by Tilray Inc. (NASDAQ: TLRY) may involve using hemp to treat a growing range of physical and mental ailments. Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) is serving states without a strong, homegrown hemp industry, such as Florida. In addition, companies across the cannabis sector, such as Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON), are diversifying their product ranges as more hemp crops come online.

  • Once the hemp heartland of the United States, Kentucky is rebuilding this lost industry following recent legislative changes.
  • Both tobacco farmers and specialist hemp companies are contributing to the boom.
  • The trend appears to also be profitable for companies providing support services, such as CBD extraction and hydroponic supplies.

To view an infographic of this editorial, click here.

A Surprising State

In some ways, Kentucky is a surprising place to see a hemp boom. Conservative lobbyists in the state have consistently resisted legalization measures for related plants, despite the wider growth of the industry. Given the “thin end of the wedge” arguments wielded against drug reform, the hemp industry might have expected to face a cold response in the state.

Yet the state’s hemp sector has deep roots. During the 19th century, Kentucky was the largest producer of hemp in the United States, producing three-quarters of the nation’s hemp fiber. As hemp production went into decline following the First World War, tobacco took its place as a major cash crop for the state. However, tobacco now faces challenges of its own. With hemp production made legal on a federal level for the first time in nearly half a century, Kentucky has once again emerged as the country’s leading manufacturer.

Overtaking Tobacco

Kentucky has become a go-to state for companies with an interest in hemp, such as Sugarmade Inc. (OTCQB: SGMD).

Since federal legislation allowed the production of hemp at test sites in 2014, Kentucky has taken a leading role in the industry. The Bluegrass state was one of only three states to exceed 100 acres by 2016, and research permits were issued for more than 12,000 acres in 2017. By the time the 2018 farm bill proposed the legalization of hemp across the United States, Kentucky hemp growers were becoming a powerful lobby. They won the support of the state’s politicians, helping to push national legislation through in December.

Sugarmade’s involvement in Kentucky comes through, at least in part, a million-dollar investment in Nevada-based Hempistry Inc. Hempistry has begun growing high-grade hemp on a 23,000-acre land option it holds in Kentucky. High in cannabidiol (CBD), an active ingredient in high demand for wellness products, this hemp offers a chance to maximize earnings from the land and set down roots for larger operations in the state.

Commentators watching the development of hemp in Kentucky have speculated that plant could overtake tobacco, once the state’s leading cash crop. A growing number of savvy tobacco farmers have started growing hemp on part of their land, hedging their bets against the decline in tobacco sales. Hemp certainly appears to be a natural alternative to tobacco for these farmers, as it can be grown in similar conditions and sold into related markets.

Consequently, the Kentucky hemp industry is already turning into a large and diverse one, driven by two separate trends. One is the need of farmers for new crops, as declining tobacco sales and the pressure of trade wars impact their profits. The other is the emergence of companies with a focus on hemp and related crops, such as Sugarmade. These companies provide specialist tools and invaluable knowledge, while the farmers bring decades of experience growing crops in the region. Old and new knowledge combine to build a booming industry.

Looking to buoy up the economic health of their state, Representative James Comer and Senator Mitch McConnell have pushed the hemp agenda at a national level, creating the space for Kentucky’s hemp industry to thrive. McConnell has been particularly crucial, using his position as majority leader to advocate for hemp reform, including publicly reinforcing his support for the industry through a tour of the state with Sonny Perdue, head of the U.S. Department of Agriculture (USDA). With this growing federal support, Kentucky hemp growers appear to be making long-term investments, confident that politicians will ensure a friendly business climate.

Providing the Fundamentals

Of course, it takes more than political goodwill to make an industry grow. Suppliers providing tools and materials to support the fundamental activities involved in the industry are crucial. This need is what attracted Sugarmade to the industry and is still the bedrock of the company’s hemp strategy.

Sugarmade entered the hemp space as a supplier of hydroponic equipment. Hydroponics are essential to the hemp market. While some hemp is grown outdoors, much is grown indoors, where greater control can be asserted over growing conditions. Hydroponic systems are used for this indoor agriculture, and Sugarmade supplies some of the best available systems available. In addition, the company is looking forward, exploring the use of artificial intelligence to monitor crops and ensure the best growth.

Agricultural supplies are one of the bottlenecks in the hemp industry. The sector has grown so quickly that suppliers have struggled to keep up. These circumstances have created what appear to be ideal conditions for Sugarmade, as demand for its core products seem to be all but ensured, allowing the company to expand by acquiring other firms. This savvy pick-and-shovel strategy has taken Sugarmade beyond its original strategy and into the Kentucky cultivation sector through the investment in Hempistry.

Supplying producers has given Sugarmade space to diversify. In addition to hydroponics, SGMD now sells extraction equipment. This is used by hemp growers or specialist processing companies to extract the CBD from hemp, so that it can then be sold to manufacturers as a raw ingredient. Sugarmade’s future plans include the introduction of new types of processing machines, aimed to keep the sector innovating and moving forward and also strengthen the company’s position as a leader in the space.

Subsidiary services such as extraction are one more reason why hemp may grow in importance to surpass tobacco. These services provide extra forms of employment and an extra boost for a state such as Kentucky. The state’s workers and tax base benefit not just from hemp farming but also from agricultural supplies, processing businesses and the entire supply chain of hemp and CBD products, a chain that looks set to only expand as the industry continues to see extraordinary growth.

The Hemp Boom

Big players from related industries are also making use of hemp to broaden what they offer as well.

Aurora Cannabis Inc. (TSX: ACB) (NYSE: ACB) recently acquired Hempco Food and Fiber Inc., a company it has been investing in since 2017. This provides Aurora with a high-volume supply of raw hemp from which it can extract cannabidiol for use in a wide range of products. The company is also working to raise the profile of hemp and find new ways to use the it. At least part of these efforts are being accomplished through a partnership with mixed martial arts company UFC. Aurora’s products and discoveries are designed to be used to help UFC athletes manage pain relief, tackle muscle strains, and enjoy the rest and relaxation they need between fights. As well as drawing attention to Aurora and hemp, the collaboration may prove invaluable insight into what CBD can do for professional athletes.

A pioneer in the use of cannabinoids, Tilray Inc. (NASDAQ: TLRY) is a company with a heavy focus on research, contributing to studies around the world. The company has recently gained permission from the U.S. government to import CBD to the states for clinical trials at the NYU School of Medicine. These studies will explore the effectiveness of CBD in treating patients suffering from Alcohol Use Disorder (AUD) and AUD with Post-Traumatic Stress Disorder (PTSD).

While regions such as Kentucky are seeing a hemp boom, others have yet to see such growth and remain underserved for CBD products. Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) is focused on these areas, taking the opportunity provided by unmet demand. States such as Florida, Massachusetts, New Jersey and New York have limited licensing and large populations, making them ideal settings for this strategy. Curaleaf is about to open its 26th dispensary in Florida.

Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) is working to strengthen its position in the hemp market through the recently completed acquisition of four subsidiaries of the Redwood Holding Group. This adds a range of hemp-derived consumer products to Cronos’s lines, giving it more prominence in the market.

The hemp boom isn’t limited to Kentucky, but with growing political and corporate support, the state appears set to return to its former place as the U.S. hemp leader.

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

About CannabisNewsWire

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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DISCLAIMER: CannabisNewsWire (CNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. The commentary, views and opinions expressed in this release by CNW are solely those of CNW. Readers of this Article and content agree that they cannot and will not seek to hold liable CNW for any investment decisions by their readers or subscribers. CNW is a news dissemination and financial marketing solutions provider and is NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

CNW HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

New Technology Enters the Market as Demand Rises for Hemp Processing Power

CannabisNewsWire Editorial Coverage: Rising hemp production is putting pressure on processing.

Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile), a provider of cultivation equipment, is adding processors to its catalog of products, focusing on next-generation machinery. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) will be among the companies with a rising demand for processing, as it increases both its cultivation capacity and its product lines. Demand is rising in part thanks to CBD’s public profile, with deals such as the partnership between Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) and UFC shining a spotlight on the plant and its potential. New uses for CBD are also increasing demand for the plant, with R&D led by companies such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) and Aphria (NYSE: APHA) (TSX: APHA).

  • Hemp can be processed to extract both fibers and cannabidiol (CBD).
  • CBD is currently the most valuable segment of the North American hemp market, though demand is likely to grow for fiber processing.
  • Larger machines offer one option to increase the scale of processing.
  • New technology may provide a more efficient answer.

To view an infographic of this editorial, click here.

Masses of Hemp

The year 2019 looks to be a bumper year for the U.S. hemp industry. Rising consumer demand has met the legal relief of the 2018 Farm Bill, whose passage in December paved the way for legal hemp cultivation and processing across the country. The industry is preparing to make hay while the sun shines — or in this case, make heaps of hemp.

This rise in production, which is expected to continue into next year and beyond, is inevitably creating complications. Most important among these is the challenge of processing the hemp. U.S. hemp-processing businesses are relatively new and small scale, as is much of the machinery with which they work. If the industry is to profit from the massive rise in hemp production, then it needs to ramp up its processing capacity. Otherwise today’s bumper crops could become tomorrow’s waste.

What We Get from Hemp

Hemp production and processing has risen from nothing to become a huge business in just the last few years. Companies working in the sector, such as Sugarmade Inc. (OTCQB: SGMD), cover a wide range of products and services, from providing cultivation supplies to marketing new products to consumers.

Those products usually incorporate one of the two main ingredients that can be extracted from hemp: fibers and cannabidiol (CBD).

Fibers are how hemp has been traditionally cultivated and used. For centuries, hemp was the basis of rope and cloth, playing an essential part in equipping navies and clothing people. This use fell out of fashion in the 20th century, as sailing was replaced by mechanical shipping, and hemp became caught up in drugs criminalization efforts. As a result, America is not well positioned to produce hemp fiber, and imports most of what it uses from China, a country with a more advanced hemp fiber industry. But with growing interest in hemp and the disruption of trade wars, home-grown fibers have moved onto center stage, with more companies recognizing the significant opportunity the crop offers.

The product that has brought American companies such as Sugarmade into the hemp space is one of the breakaway commercial phenomena of the past decade — CBD. A natural chemical found in hemp and related plants, CBD has recently been the subject of much research and development. Claims have been made for its effectiveness in relaxation, pain management and countering anxiety. The component has become a popular ingredient in health and well-being products, including supplements, foods and toiletries.

With a bumper harvest of hemp expected this fall, companies throughout the value chain are asking how raw hemp can most effectively be processed to provide for the massive demand for CBD.

Scaling Up

The industry is clearly going to have to scale up to meet the challenge of hemp processing. This burgeoning increase is creating unprecedented levels of demand for processing machinery.

“Our staff has done extensive research into the fast-growing hemp industry,” said Sugarmade CEO Jimmy Chan. “We continue to see an imbalance between cultivation outputs and extraction capacities within the industry. This leads us to believe the market for extraction services and the equipment required by these extraction companies will continue to accelerate.”

The company has responded by entering the market for hemp extraction technologies and equipment. As a supplier of cultivation supplies, Sugarmade has already benefited from the green rush surrounding the Farm Bill and the growing interest in hemp that preceded it. Moving from cultivation equipment to extraction equipment is a natural next step for a company whose business model is built around supporting cultivators.

In addition to increasing the number of machines available, many companies are looking into providing bigger machines that can process ever bigger volumes of biomass. But the drawback of this “bigger is better” philosophy is cost. The larger machines being installed in many extraction facilities are expensive, not just for the machines themselves but also the associated costs. Expenses such as real-estate square footage and ethanol storage have to be factored in, and once those costs are included, a modern hemp-extraction facility can easily cost tens of millions of dollars, a cost passed on to cultivators through processing fees.

While the industry’s processing capacity clearly needs to increase, the best solution may not be the most obvious. Sugarmade is looking at a different approach.

New Technology

Rather than focus on larger versions of current machines, Sugarmade is exploring the next generation of hemp-processing technology.

Most CBD extraction in the United States currently uses ethanol to chemically separate the CBD from the rest of the plant and make it available for use. But other options are available and are becoming more sophisticated. New technology using water-based sonication extraction, microwaves and other techniques may transform the way extraction is carried out — and significantly impact costs as well. These machines, which Sugarmade plans to make available to its customers, could reduce the cost of extraction and so help cultivators increase their output without exorbitant increases in cost.

These technologies may also help with other steps in the processing of hemp. New machines could perform additional functions that currently require auxiliary equipment, such as THC remediation and removing heavy metals. Skipping steps in processing would only add to the efficiency of operations, reducing costs and increasing speed of processing.

To bring this new technology into the American market, Sugarmade is working with Chinese manufacturers. The Chinese market is advanced in its approach to extraction, thanks to its reliance on essential oils for herbal medicines. For more than a thousand years, Chinese farmers have been cultivating and extracting essential oils from hemp. This expertise has led to an in-depth understanding of the process and the equipment needed to complete the task. Working with Chinese manufacturers could allow Sugarmade to provide its customer with more advanced and efficient technology.

Hemp processing needs to scale up. But just because eventual outputs need to be bigger doesn’t mean that bigger is necessarily better where machinery is concerned. In many cases, bigger may be just more expensive, whereas improved technology could bring real benefits.

Companies in Need of Processing

The pressure on processing capacity for hemp and related plants comes in part from the emergence of large companies in the sector. Among these is Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), a leading player that has benefited from investment from other industries. The company has been steadily growing, including through the acquisition of a company making hemp skin-care products, creating demand for more CBD from within the company. To help meet this demand, it has been preparing another acquisition of Acreage Holdings Inc.

Another of the large Canadian companies with an interest in hemp and CBD, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) is exploring new ways in which these products can be of use. The company recently announced a partnership with mixed martial arts company UFC. As part of this arrangement, Aurora will explore ways in which its research and products might help athletes, whether in pain relief, dealing with the strains put on muscles, or helping with rest and relaxation. The partnership could help raise the company’s profile by association with an exciting sport and some of the world’s most impressive athletes.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) is also looking for new approaches to CBD, with the creation of a recent R&D facility. While R&D work may only consume relatively small amounts of plants, its results include new products that could expand the market and increase demand for processing facilities. The company’s CEO, Mike Groenstein, has also been raising the profile of this work through a series of conference appearances, as the sector becomes better connected and interdependent.

The law around CBD and related products continues to evolve, and with it the products that can be sold. Aphria (NYSE: APHA) (TSX: APHA) is developing vaporization products in anticipation of changes in Canadian law later this year. As more states and countries bring in ever more liberal laws, product ranges should continue expanding, and with that growth will come the sector’s rising demand for equipment.

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

About CannabisNewsWire

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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DISCLAIMER: CannabisNewsWire (CNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. The commentary, views and opinions expressed in this release by CNW are solely those of CNW. Readers of this Article and content agree that they cannot and will not seek to hold liable CNW for any investment decisions by their readers or subscribers. CNW is a news dissemination and financial marketing solutions provider and is NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

CNW HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Demand for CBD Places Power in Hands of Extraction Providers

CannabisNewsWire Editorial Coverage: Extraction technology plays a crucial part in the production of cannabidiol (CBD) from hemp.

Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile), a company already established in the hydroponic equipment business, is making plans to add extraction technology to its repertoire. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has been researching new medical applications for CBD and related chemicals — medicines for which extraction will be critical. KushCo Holdings Inc. (OTCQX: KSHB) has moved from providing support services to CBD-related companies to running its own store and has recently bolstered its leadership team for further growth. Harvest Health & Recreation Inc. (CSE: HARV) (OTCQX: HRVSF) has expanded swiftly over the past six years, growing from a single operation to a presence in five U.S. states. And in a boost to CBD’s public profile, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) has teamed up with UFC to research the application of CBD and related treatments for mixed martial artists.

  • Extraction technology is not normally owned by the cultivators growing the crops.
  • The technology uses a range of different methods, utilizing substances such as ethanol and carbon dioxide.
  • The need to extract CBD oils allows extractors to take a substantial portion of hemp harvest profits.
  • Soaring demand for CBD has added to the profits for those providing extraction equipment.

To view an infographic of this editorial, click here.

Turning Hemp Into CBD

In the modern market, CBD is money, a sure seller that can be easily turned into cash by companies with even halfway capable supply chains and marketing. The incredible popularity of this hemp-derived substance has led to its use in medicines, foods, vaping oils, cosmetics and anything else manufacturers can think of.

But just as money doesn’t grow on trees, CBD doesn’t grow in the form of a pure oil that cultivators can just pick and put in a packet. The valuable commodity has to be extracted from hemp plants, a sophisticated process that involves expensive equipment and technical expertise. The need for that extraction work is fueling an important subsector of the hemp industry.

Extraction Efforts

The CBD industry is a complex one, with a range of companies providing different services at different places in the process. Key players include farmers and cultivators, who get most of the press attention; product developers and brand managers, who draw commercial attention onto products; and of course behind-the-scene companies such as Sugarmade Inc. (OTCQB: SGMD), which provides cultivation supplies. Perhaps the most overlooked element of the process — extraction — may be one of the most important in adding value.

All CBD extraction is achieved using a type of solvent. This chemical is mixed with the prepared hemp plants in carefully controlled conditions within specialist machines. The solvent attaches to the CBD and draws it out of the plant. The machinery then separates the solvent-CBD mix from the rest of the hemp remains, and then extracts the CBD from the solvent. The aim is to complete this extraction process as quickly, efficiently and affordably as possible. The ideal extraction system draws all of the CBD from the plant, though it is seldom possible to get 100%; even high-grade ethanol extraction equipment works at 98.5%.

A number of different solvents are used. Carbon dioxide, butane and ice water are among the options. The one favored by many companies, including Sugarmade, is ethanol extraction, in which alcohol detaches CBD from hemp as easily as it extracts common sense from a student on a Saturday night.

Because CBD is essentially useless until it has been extracted, a delicate balance exists in the relationship between farmers and extractors. Growing a crop of hemp takes months, during which the plants are carefully fed, watered and monitored to ensure the best possible harvest. The valuable crop is then taken to the extraction company, which might process the entire crop in a matter of days. Right now, extraction technology is in short supply and high demand, so the extraction companies can take up to 60% of the CBD or its value as a processing fee — a highly profitable outcome for the minority of the work.

This imbalance appears certain to change. While the number of hemp growers has risen dramatically recently, the number of extraction operations has not. Clearly, the time has come for extraction operations to catch up, both in the number available and in the scope of their processing. This obvious need is what Sugarmade is working on as the savvy company makes a move into the market.

As with its previous work in cultivation, Sugarmade isn’t going into extraction itself — at least not yet. Instead, the company is preparing to provide state-of-the-art extraction equipment. Move is designed to allow more companies to get involved in this lucrative piece of the CBD trade. As more companies get involved and existing operations grow larger, supply should push down prices, meaning a better deal for cultivators.

A change looks to be imminent in the CBD industry. But how did this extraction bottleneck arise?

The CBD Rush

The answer lies in the extraordinary growth of the CBD industry. Barely even a novelty talking point a decade ago, CBD has seen its profile soar in recent years. In the health and well-being sector in particular, CBD has become the new wonder ingredient, the elixir that customers want and retailers are eager to provide. The key component is used to tackle problems such as pain, insomnia and anxiety, and is also used in relaxing vaping oils and edibles.

CBD was given a boost in December when the U.S. government legalized its production on the federal level. Previously produced under state-level licenses, CBD was grown in an uncomfortable legal area, with federal constraints making business complicated. With the change in the legal status of this crop, cultivators are making the most of a CBD rush.

But despite the best efforts of companies such as Sugarmade, supply of CBD isn’t keeping up with demand. It’s been less than a year since laws making production easier were introduced in both the United States and Canada, and the industry is working feverishly to catch up. In many areas, companies can’t obtain enough CBD to keep up with what their customers want.

This supply-vs.-demand problem is exacerbating the power imbalance between cultivators and extractors. Working to meet the mounting demand — a demand that appears certain to only continue its upward trend—cultivators are eager to obtain CBD as quickly as possible and move it on to market. This forces them to accept the rates offered by extractors. But fortunately, as is often the case, the trend is forcing change.

The same legal changes that have created greater demand and greater cultivation make it easier for companies to move into or expand their extraction business. Supply chains are becoming better established both for CBD and for the equipment involved in its processing. The provision of more extraction equipment, regardless of the solvent used, will remove the bottleneck and allow the CBD to flow free.

CBD Spreads

The growth of the CBD market has both encouraged and been driven by the success of companies working in the field.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is one of the largest companies working with CBD, in part thanks to a multibillion-dollar investment from drinks manufacturer Constellation Brands. Already a leading player in the market before the Constellation deal, Canopy Growth has seen its profile and business go from strength to strength. But while that deal drew attention to the recreational side of the company’s work, and it has recently made a move in skin care through acquisition of This Works, Canopy Growth’s core focus is still on medicine. The company’s research division recently provided an update on its work, which includes the development of a whole range of medicines that include CBD.

Like Sugarmade, KushCo Holdings Inc. (OTCQX: KSHB) first moved into the CBD space as a support company, providing packaging solutions. The company has since moved to a more central position, with an online store for CBD and related products. And to ensure continued high-quality leadership, the company recently bolstered its leadership team.

Founded by a former lawyer in 2013, Harvest Health & Recreation Inc. (CSE: HARV) (OTCQX: HRVSF) provides CBD-related products in the United States. The company has shown an eagerness to expand, already spreading from a single location to five states in the space of six years. Harvest also has a focus on education and information that reflects the community-minded approach of many businesses within the sector.

One of the companies that has seen the greatest growth is Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), which has profited from Canada’s liberal drug laws. Aurora has become heavily involved in research, looking at new treatments that can be produced with CBD. The company has even partnered with mixed martial arts company UFC to explore how its products and discoveries can help consumers.

All of these companies rely on extraction technology to create products that use CBD. Growth in the extraction industry and better provision of its technology will provide a boost for many of them as the CBD market grows.

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

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