Canada Leads International Cannabis Boom — and It’s Not About Smoking

CannabisNewsWire Editorial Coverage: Legal changes in Canada are creating an ideal base for cannabis companies, which are shifting their focus away from smoking.

As the first G20 nation to make recreational cannabis legal, Canada is creating an opportunity for its cannabis companies to become global leaders.
Analysis shows that the global cannabis market is larger than expected — and set to keep growing.
Many new consumers prefer not to smoke their cannabis, leading to a shift towards cannabis-derived food and drinks.

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) (LXRP Profile) has developed patented technology that helps make cannabis available to nonsmokers; the company’s innovative development methods make cannabis’ active chemicals more palatable and more effective in food and drink. Companies such as Tilray, Inc. (NASDAQ: TLRY) are expanding their production to cater to this growing market, resulting in rising share values. GW Pharmaceuticals Plc (NASDAQ: GWPH) has leveraged its position in the market to raise extra financing through a $345 million public offering. Aurora Cannabis, Inc. (OTC: ACBFF) (TSX: ACB) has been focusing on ensuring access to a broad market, setting up supply agreements across Canada. Meanwhile, other companies are evaluating international growth opportunities, with Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) having established subsidiaries on five continents.

The Canada-led Revolution

This month marks one of the most dramatic changes ever in the cannabis market, a moment set to transform the industry and the way that it’s viewed. As of Oct. 17, consumers across Canada are able to buy cannabis for recreational consumption for the first time. Canada is the first G20 nation to make such a change, and the precedent could be critical. Other countries are watching what happens in Canada, as voters around the world push their governments toward similar legalization; there are already more than 30 countries around the world where cannabis is legal in some form for medical use.

The Canadian example comes just as analysis shows that the cannabis market is larger than previously realized and set for continued growth. This puts Canadian companies in a powerful position, able to make the most of being based in a country that’s friendly to the cannabis industry. By using the freedom and opportunities this presents, these companies could easily become global leaders in a fast-growing sector.

Canada Legalizes Cannabis

For Canadian companies working in the cannabis sector, such as Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP), huge changes are coming.

After much political maneuvering, recreational cannabis is now legal in Canada in keeping with a promise made by Justin Trudeau when he was elected prime minister in 2015. The wait has been frustrating for some, but it has given companies such as Lexaria time to establish their leadership position.

Canada already has a thriving medical cannabis industry, in which tight regulation provides control over the use of drugs. The new regulations extend this careful approach to the recreational market. Using a model similar to liquor licensing, retailers will have to be licensed to sell cannabis and follow clear rules. Those who try to sell outside the system will be quickly shut down.

In setting up its system, the Canadian government and provincial authorities have learned from the example of legalization in certain U.S. states. They worked with cannabis companies to ensure that the licensing system for both production and retail was ready for the Oct. 17 deadline While there will undoubtedly be hitches, including the likelihood that demand will initially outstrip supply, this appears likely to be a smooth launch.

Companies have also been making adjustments. For example, Lexaria recently announced a new subsidiary, Lexaria CanPharm Corp., which is focused purely on applying the company’s technology to the cannabis industry. Because Lexaria sells technology, if is already earning revenue in several locations both within and outside of Canada without touching the plant. Lexaria has a Canadian base but international reach.

Cannabis Market Larger Than Expected

Judging the potential size of the legal cannabis market is a tricky business. The drug’s widespread illegality around the world means that data is almost entirely drawn from surveys, in which respondents may be wary of admitting their consumption. Legalization will likely lead to changes in consumption patterns; easier access will almost certainly increase both medical and recreational demand.

Despite the limitations on judging the market, observers have been keen to estimate what the market could represent. A survey from before legalization indicated that 4.2 million Canadians consume cannabis on a regular or occasional basis. Based on this data, companies and commentators have predicted an industry worth billions of dollars, which could quickly surpass the whiskey industry.

But leading cannabis commentators are now suggesting that previous estimates may have undervalued cannabis’ potential. The only specialist cannabis analyst for a major Wall Street trading firm believes that the impact of legalizing a previously illegal market has been underestimated. Legalization could lead not just to large-scale sales of cannabis but also to its use as an ingredient in other products. Because Fortune 500-type companies are now interested in the space, the market could eventually be worth hundreds of billions of dollars.

If that analysis is accurate, then many cannabis companies are being massively undervalued. That’s good news for the future prospects of businesses such as Lexaria.

Consuming Cannabis without Smoking

This growth is likely to be coupled with changes in the way cannabis is consumed — changes of huge relevance for Lexaria.

A recent survey of U.S. consumers showed that many would like to try cannabis if it became legal. They also said that they would be more likely to do so if they could consume the plant through food. Putting cannabis into drinks and snack foods will make it easier for people to enjoy in a social setting with friends, in a similar way that they currently consume alcohol. That would make it a more popular and accepted part of everyday life.

Lexaria’s patented technology could be invaluable for companies catering to this desire. Its lipophilic enhancement technology is designed to improve the biological conductivity of active compounds, including those found in cannabis. It increases their potential for absorption by the body, meaning that consumers get better value for their cannabis. It also improves the taste, which will be important in making cannabis food and drinks popular. Recent tests have shown good results for applying this technique to active ingredients derived from cannabis.

Lexaria plans on licensing this technology to third-party partners and was recently awarded its 9th and 10th granted patents applicable for cannabis beverages. With cannabis-infused food and drink set to hit the Canadian market next year, and with large companies eyeing its potential, plenty of companies are sure to be interested in such technology that takes advantage of Lexaria’s leadership position.

Growing with the Market

The legalization of recreational cannabis is good for companies already working in the Canadian medical market such as Tilray, Inc. (NASDAQ: TLRY). A company with a strong pedigree in research and development, Tilray is expanding its sales potential in preparation for the recreational market. Its High Park Farms subsidiary recently received a license to sell cannabis in Canada and has already carried out several harvests to get stocks ready for sale. Such moves have led to positive views of the company’s future, with Wall Street commentators predicting a huge rise in the value of its shares over the next year.

The expectation of huge growth in the cannabis industry is helping companies raise extra finance to tap into that market. GW Pharmaceuticals Plc (NASDAQ: GWPH) has just raised over $345 million through a public offering. A medical cannabis company, GW isn’t currently involved in the recreational sector but is still profiting from the growth it brings.

One of the big players in Canada’s medical cannabis market, Aurora Cannabis, Inc. (OTCQX: ACBFF) (TSX: ACB), has been laying the groundwork to make the most of recreational sales. The company has supply agreements with provinces across Canada, giving it the opportunity to reach a broad customer base. As well as providing quick profits, this will help to establish brand recognition early on for greater influence as the market grows.

While attention is currently focused on Canada, that is just one part of the cannabis market. As with other industries, global reach will eventually decide the biggest players, and Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) is already working on such expansion. With subsidiaries in North and South America, Europe, Australia and Israel, the company is tapping into growing cannabis markets around the world. Lessons from Canada will help in developing these other markets and in positioning Cronos to make the most of them.

The legalization of cannabis in Canada is a critical part in an international puzzle, one whose pieces include unexpected growth, global connections and transformations in consumer habits. Put together, these pieces offer the hope of a profitable future for cannabis companies.

For more information on Lexaria Bioscience Corp., visit Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP)

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Hemp and CBD Set to Eclipse the THC Marijuana Market

CannabisNewsWire Editorial Coverage: As the cannabis market continues to grow, hemp and cannabidiol (CBD) are occupying an increasingly large share of the escalating industry.

Hemp, the form of cannabis without psychoactive tetrahydrocannabinol (THC), is an important part of the cannabis market.
Hemp is common in many health and wellness products.
Total sales of hemp-derived products are expected to exceed $1 billion this year.
Some industry experts expect hemp products to soon exceed marijuana for their share of the cannabis industry.

Sugarmade, Inc. (OTCQB: SGMD) (SGMD Profile) is taking advantage of this shift by making a heavy investment in hemp production. Medical marijuana company Tilray, Inc. (NASDAQ: TLRY) bridges the gap between product types through its production of CBD oils. One of the largest cannabis growers in Canada, Canopy Growth Corp. (NYSE: CGC) provides plants used in a wide range of products. GW Pharmaceuticals Plc (NASDAQ: GWPH) has created the first cannabis-derived prescription drug approved by the U.S. Food and Drug Administration. Meanwhile, public acceptance and more positive perception of the cannabis sector are shifting, thanks at least in part to publicity efforts by shifted by cannabis companies such as Aurora Cannabis, Inc. (OTCQX: ACBFF) (TSX: ACB).

To view an infographic of this editorial, click here.

The Two Sides of the Cannabis Market

It’s all too easy to view the cannabis sector as a single market providing variations on the same product. In reality, it’s an increasingly complex and varied industry. Its primary plants and products can be divided into two groups: marijuana (and THC) in one category, and hemp (and CBD) in the other.

The marijuana piece of the cannabis market is the one more traditionally recognized. In this space, plants grown, cultivated and used contain THC, the psychoactive ingredient that gets drug users high. THC is the reason for cannabis’ ongoing popularity as a recreational drug worth hundreds of millions of dollars in both legal and illegal markets.

The other side of the market is centered around hemp. Hemp does not contain THC; rather it contains CBD, an active ingredient found in other cannabis plants. CBD has fueled the development of medical marijuana applications, but alternative products that utilize the substance are increasingly popular in the health and wellness markets, where they can be bought more widely than medical marijuana. As a result, some industry experts note that hemp may soon make up the larger part of the cannabis industry.

The Growth of the CBD Market

Though less well-known outside of specialist markets, CBD is becoming a more accessible way to benefit from cannabis. This has led to investment from companies across the cannabis sector, including Sugarmade, Inc. (OTCQB: SGMD).

Sales of hemp-based products in the United States reached $820 million last year, of which $190 million, or 23 percent of sales, consisted of CBD-derived products, according to Hemp Business Journal. That total for hemp is expected to pass a billion dollars this year.

Predictions for the future are even more promising. The same Hemp Business Journal article estimates that the hemp market will reach $1.9 billion in the United State by 2022, with $646 million of that coming from CBD and its derivatives. The Brightfield Group is even more optimistic in its assessment. The group’s industry specialists believe that CBD could outstrip the rest of the cannabis sector in size in the next few years.

For companies such as Sugarmade, whose business is closely tied to CBD, these developments create opportunities for expansion and innovation.

CBD Enters the Mainstream

A wide variety of end-use product potential is helping hemp gain mainstream use and acceptance. This market includes supplements, personal care products, textiles, and food and industrial applications, as well as CBD and the support services provided Sugarmade and other similar companies.

The hemp market has grown 15 percent per year over the past few years. Unlike marijuana sales, this growth isn’t driven by the medical and recreational sectors. Instead, body products and supplements have been key factors. Much of the hemp for these products has been imported from Canada and China, with imports totaling $78.2 million in 2015, not counting textiles, paper products or construction materials.

The hemp market is expected to be strengthened by the2018 Farm Bill currently making its way through the U.S. Senate. Legislation included in the act, supported by the Senate majority leader, would remove industrial hemp from the Controlled Substances Act, making it easier for farmers to grow hemp for CBD and other agricultural purposes. Since the last farm bill was passed four years ago, some farmers have been able to legally set up test production of hemp for CBD, but widespread cultivation has not been permitted.

The extent of the change permitted by the expected agricultural law remains uncertain. Other issues unrelated to cannabis are currently holding up the Farm Bill, despite widespread bipartisan support for the hemp provisions. Once the bill passes, the impact for CBD will also depend upon decisions made by state authorities and the FDA. But the bill will certainly ease the way for potential hemp growers in states that support the CBD industry. Until now, national law only allowed the growing of hemp and harvest of CBD in state pilot programs and for academic research; in the 2018 Farm Bill, those limitations are eliminated.

Clearly, The legalization of hemp and CBD on the federal level will only benefit companies such as Sugarmade. Previously, access to financial and support services could be difficult for companies working in the cannabis sector. Marijuana retailers had to resort to cash payments or newly developed electronic systems because banks feared doing business with companies defying federal law. Making hemp legal will allow a wide variety of support systems to evolve.

Innovating with CBD

The success of companies such as Sugarmade that are working in the CBD space comes in large part through innovation. These companies recognize the need to research, offer, and implement new products, services and investments to drive growth.

New products will take CBD into new commercial categories. Hemp-derived beverages and pet foods are both on the horizon. Medicines are being tested. Paper, cloth and construction are also industries that stand to benefit from additional hemp offerings.

Sugarmade’s success comes through expansion in hydroponics, the company’s entry into the cannabis space. Hydroponic equipment is key to cultivating cannabis and, as a result, hydroponic companies have seen substantial growth over the past few years. Sugarmade is building upon its existing growth by acquiring two other hydroponics companies, a move that turned the company into one of the leading players in hydroponics. This move is also expected to raise Sugarmade’s revenues next year from $30 million to $75 million as the market for hemp and its support services grows.

Sugarmade has also reinforced its position in the market through more direct investment in CBD. The company recently committed to investing a million dollars in Hempistry, Inc. The investment is targeted to support Hempistry’s work on an ultra-high CBD-content hemp strain being grown in Kentucky. It also positions Sugarmade to profit directly from the staggering growth in CBD.

The impact of the hemp industry extends beyond the United States. Sugarmade has made moves into Europe as well, selling hydroponics in the United Kingdom. While the current hemp market in Europe is small, savvy companies are evaluating opportunities to get in now. Where America leads, Europe is likely to follow, which means the road towards legalized cannabis and a thriving CBD market may be imminent.

Cannabis Competitors

A number of companies are competing for a share of the CBD market.

For medical marijuana company Tilray, Inc. (NASDAQ: TLRY), CBD is a natural extension of its other work. The company has developed CBD oil for medical use and is one of the first to sell such a product into the United Kingdom after top politicians intervened to make CBD available for treating rare childhood forms of epilepsy. A strong program of research and development has led to growth for the company, which is now making initial public offerings in the United States and Canada to finance further work.

Canopy Growth Corporation (NYSE: CGC) is one of the largest cannabis companies in Canada, a leading market for cannabis and CBD. With 5.6 million square feet of growing space spread across its facilities and subsidiaries, three-quarters of it licensed by Canadian authorities to grow cannabis, Canopy Growth has become a powerhouse within the industry and is breaking new ground for cannabis companies, having completed the first legal transfer of cannabis from Canada to the United States using a DEA-issued permit. This transfer, for medical research purposes, seems to reflect a softening of DEA attitudes as the agency adjusts to the changing status quo.

Medical cannabis research is also important to GW Pharmaceuticals Plc (NASDAQ: GWPH). The company created the first cannabis-based prescription medicine to gain FDA approval and continues to innovate through its research and product divisions. Like Tilray, the company is committed to growth, having recently announced new shares to raise $300 million of finance.

Aurora Cannabis, Inc. (OTCQX: ACBFF) (TSX: ACB) isn’t just selling its own CBD-rich health and wellness products — it’s also working to raise the public profile of the cannabis industry. It has partnered with Elevate, the annual citywide Toronto festival, to create tracks discussing cannabis and health issues. These events will encourage discussion about the health potential of CBD and marijuana, as both sides of the industry continue to gain in size and public recognition.

The cannabis industry has seen huge growth over the past decade, and now it’s going through big changes. Commercial CBD and hemp, until recently existing in the shadow of medical cannabis and recreational marijuana, could soon be the leading products in a growing global market.

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

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Fresh Acquisitions Help Companies Profit from Growth in the Cannabis Sector

CannabisNewsWire Editorial Coverage: A wave of acquisitions is sweeping the cannabis sector, as increasing legalization draws the attention of big business.

Large and mid-tier cannabis companies are absorbing their smaller competitors.
Tobacco and alcohol companies are moving in as a natural extension of their current ranges.
This is supported by growth not just among cannabis growers but also for businesses supporting them.

Cultivation supplies company Sugarmade, Inc. (OTC: SGMD) (SGMD Profile) has recently announced the acquisition of hydroponic product companies that could more than double its revenue. Tilray, Inc. (NASDAQ: TLRY) is fueling expansion through an initial public offering as it begins its first sales of CBD oil products in the United Kingdom. Drinks giant Constellation Brands now owns a large chunk of Canopy Growth Corp. (NYSE: CGC), one of Canada’s largest cannabis companies. GW Pharmaceuticals Plc (NASDAQ: GWPH) is releasing fresh shares to fund its R&D-driven growth. Meanwhile, Aurora Cannabis, Inc. (OTCQX: ACBFF) is making acquisitions across the Atlantic, buying out a pair of European hemp companies.

To view an infographic of this editorial, click here.

Acquisitions Grow in Cannabis Sector

Twenty years ago, it would have sounded like a science fiction fever dream, but today the cannabis industry is one of the fastest-growing sectors in the North American economy. The nine U.S. states where recreational cannabis is legal are about to be joined by the entire country of Canada, while another 20 states have legal markets for medical marijuana. Businesses catering to these markets are going from strength to strength, whether selling cannabis, manufacturing products derived from it or providing the tools and support that growers need.

This has led to a flurry of mergers and acquisitions in the cannabis sector. At the top end, large companies from other sectors have started buying into cannabis. Beverage manufacturer Constellation Brands owns more than a third of the shares in Canopy Growth, Molson is working with Hydropothecary, and Phillip Morris has been talking about moving into the sector. Seeing another legal drug coming into play, tobacco and alcohol companies want to buy their part of the future.

And there’s also been a lot of movement within the industry.

Cannabis Companies Buy Up Competitors

Among existing cannabis companies, consolidation is the name of the game. A wide scatter of small companies — startups created within a new and uncertain industry — are combining into larger operations.

One example is a recent series of acquisitions by Sugarmade, Inc. (OTC: SGMD). A Los Angeles company with warehouses in southern California, Sugarmade isn’t a purely cannabis-oriented business, but its work in restaurant supplies and packaging is increasingly taking a back seat. Its higher profile work is in the cannabis sector, where it provides cultivation supplies.

Sugarmade isn’t one of the big players in cannabis, but it has made bold moves for a mid-tier company. Following an SEC filing earlier this year, the company has recently made formal proposals for the acquisition of two hydroponic supply companies catering to the cannabis sector. These acquisitions would more than double Sugarmade’s expected revenue for next year, from $30 million to $75 million.

Even within the cannabis industry, this is an unusual move. Most of the mergers and acquisitions are being led by big companies, who can obtain external investment to drive their expansion. It’s a familiar case of success breeding success, as the largest companies are most able to grow. But Sugarmade is bucking that trend in a move that could see it join the big players, disrupting the status quo of the cannabis industry.

“These acquisitions will not only very significantly boost our top line revenue growth, but will also expand our distribution across the most important sectors of the fast-growing cannabis marketplace,” said Sugarmade CEO Jimmy Chan. “In addition to the revenue growth opportunities, we will also be afforded very meaningful cost savings across many operational functions. In particular, we believe there are strong cost synergies relative to manufacturing, purchasing, international transport, warehousing and shipment to customers. Perhaps most exciting, however, is that these acquisitions will place us among the largest public companies in the booming cannabis sector.”

It’s a strategy that brings a lot of obvious advantages. Greater integration smooths out supply chains and increases efficiency, reducing overheads to improve profits. It increases a company’s ability to bring specialist expertise in house. It increases a company’s influence in negotiating with suppliers and customers, as well as in lobbying authorities.

But in a sector where mergers are likely to continue, it also has another effect. As the big players in tobacco and alcohol look for cannabis businesses to buy, Sugarmade’s growing strength improves its bargaining position. Whether the company aims to be bought up or to hold onto its independence, it will be better able to negotiate from a place of strength.

Supporting Services

Talk about the cannabis industry usually focuses on the cultivators and distributors, those directly dealing with cannabis. But over the past decade, the industry has grown far more diverse. Support companies such as Sugarmade play an increasingly important role.

The most obvious support services are those supplying cultivation equipment. This is where Sugarmade’s main business lies, selling growers the tools they need to produce their crops.

Hydroponics, the growth of plants in water-based nutrients instead of soil, is an important part of this. Used to grow high-quality plants in indoor facilities, this method is central to the cultivation of controlled, high-quality cannabis crops in secure conditions. Hydroponic sales have allowed Sugarmade to expand beyond North America and into the European market, where cannabis is still largely illegal but its cultivation tools have other uses. The companies Sugarmade is buying also work in hydroponics and their acquisition could make the company a major player within that market.

Support services for cannabis are increasingly diverse. Equipment for waste disposal, lighting and growing beds are all important. Some of this is provided by hydroponics companies, while other components are created by specialist firms. Seeds are nurtured and sold, new plant strains grown, and growing and harvesting techniques developed. Research and financial services specifically geared toward cannabis add to a complex and multifaceted industry.

The Potential for Growth

Much as its opponents might disagree, the cannabis industry isn’t going away. In the United States, where Sugarmade is based, the industry shows every sign of continuing its rapid growth.

The biggest driver for growth is still legal change. The legalization of both medical and recreational cannabis has been spreading state by state, as increasingly liberal attitudes are reflected in the law. Though cannabis remains illegal at the federal level, the government has done nothing to clamp down on these efforts by states. If anything, the government’s attitude is softening, with this year’s Farm Bill set to legalize industrial hemp, a nonpsychoactive form of cannabis.

Industrial hemp is already being grown in test projects in the United States, creating impressive profits for the farmers involved. While its cultivation often operates differently from that of medical and recreational cannabis, it relies on much of the same knowledge and many of the same tools. For companies such as Sugarmade, which provide cultivation supplies, industrial hemp will mean significant opportunities for growth.

On top of this, there’s the long-term growth expected from cannabis companies within the states that have legalized their products. As the legal consumer market settles in, the habits of cannabis consumers will change. They’ll move away from buying from criminals, undermining illegal networks and giving more business to the legal companies. As these companies expand production facilities, the need for additional equipment and supplies will increase – supplies that can be provided by Sugarmade and the companies that it’s absorbing.

Many North American cannabis companies are seeing substantial growth. Tilray, Inc. (NASDAQ: TLRY) is looking to finance its ongoing expansion through initial public offerings in the United States and in Canadian provinces. A leading medical marijuana company, Tilray has sold its products to customers on five continents and is one of the first companies to sell CBD oil, a cannabis derivative, in the United Kingdom. Its expansion is driven not by acquisitions but by a strong research and development program.

Canopy Growth Corporation (NYSE: CGC) is one of the largest cannabis companies in Canada. Drinks manufacturer Constellation Brands has pumped over $4 billion into Canopy Growth, and the American giant now owns more than a third of Canopy Growth’s shares. It’s a move that will help the companies to collaborate in producing cannabis-infused drinks, which will become legal in Canada next year. More than this, it’s a move by a drinks manufacturer to get a foothold in cannabis and so expand from alcohol into another legal drug.

GW Pharmaceuticals Plc (NASDAQ: GWPH) has been growing through new products and research, with the creation of the first FDA-approved prescription medicine derived from cannabis plants. It has just announced the release of new shares, which are expected to raise $300 million in support of the company’s ongoing growth.

Aurora Cannabis, Inc. (OTCQX: ACBFF) is going international with its latest acquisition. In September, the company acquired Europe’s largest producer of organic hemp, Agropro UAB, and hemp processor and distributor Borela UAB. This will increase the company’s production of hemp-derived health and wellness products around the world.

With the cannabis industry expanding, mergers and acquisitions are helping to drive a round of growth, creating companies with the power to compete on the global stage.

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

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Intangible Assets Power Growth, Acquisitions in the Pharmaceuticals Sector

CannabisNewsWire Editorial Coverage: Intangible assets such as patents increasingly dominate the global business landscape, especially in the pharmaceutical sector.

Intangible assets are estimated to be worth trillions of dollars in the United States alone.
These assets drive deals as companies acquire smaller patent holders.
In growing sectors such as cannabis, smaller companies are rushing to establish intangible assets ready for expected market growth.

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) (LXRP Profile) is one of the leaders in the world of cannabis, with applications made for more than 50 different patents and more to come. Tilray Inc. (NASDAQ: TLRY) is also focusing on building its intellectual property (IP) portfolio, including exclusive rights to at least 22 issued or pending patents. In wake of receiving FDA approval of its Epidiolex® (cannabidiol) oral solution for the treatment of seizures associated with two rare and severe forms of epilepsy, GW Pharmaceuticals Plc (NASDAQ: GWPH) has applied for five new Epidiolex patents. Recently Canopy Growth Corporation (NYSE: CGC) announced that it has, alone or with its subsidiary or joint-venture partners, filed eight provisional U.S. patents pertaining to the delivery and application of cannabis and cannabinoid-based therapeutics. And through its ownership of CanniMed, Aurora Cannabis, Inc. (OTCQX: ACBFF) has obtained six patents related to cannabinoid delivery for pain management.

To view an infographic of this editorial, click here.

The Power of Intellectual Property

Intellectual property is now one of the most important parts of the global economy. Copyrights, trademarks and patents are a vital weapon in the arsenal of many businesses. For some companies, this is a secondary consideration, a way to strengthen and protect their positions within their fields. For others, it’s their entire focus — a way to dominate a sector or provide valuable returns.

The power of IP means that no part of the economy goes untouched. New industries often arise off the back of new IP. Even when that’s not the case, the development of new techniques and technologies frequently lead to the creation of patents, as companies work to innovate and control techniques that give them an edge over their competitors. For relatively new sectors, such as the cannabis market, this means the sudden flourishing of IP and a race by companies to stake their claim on these valuable assets. As a sector matures, so will its IP market.

The Value of Intangible Assets

Patents are a big part of business for companies such as Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP), for whom developing and protecting new technology is fundamental to success. Whether it’s underlying technology such as DehydraTECH, the company’s system for increasing the body’s absorption of chemical compounds, or specific products derived from DehydraTECH, such as TurboCBD, Lexaria’s success is founded on its distinctive IP.

IP is part of a wider sector of the economy — intangible assets. This is the wealth provided not by physical assets and the processes that directly transform them but by less visible, more abstract resources. It includes IP, whose value is often examined and measured, as well as harder-to-pin-down elements such as business processes and reputation.

These factors have always played a part in business, but their growing recognition and analysis has led to the growth of companies whose main focus is on intangible assets, from investment research firms and reinsurers to patent licensing and enforcement companies.

Representing around a third of the U.S. economy, intangible assets are now consciously analyzed and developed by virtually every business, even if they don’t recognize the “intangible asset” label. Companies with a solid focus on these areas can place themselves in positions of great strength.

Patents in a New Sector

The speed at which intangible assets can develop is well illustrated by movements in the cannabis sector, where many of Lexaria’s patents apply.

The legal global cannabis market started to emerge only recently, thanks to a handful of countries allowing medical marijuana. The market has started to mature through a small but growing number of territories with legal markets for recreational cannabis, as well as the separate management and licensing of industrial hemp. Legal cannabis is now a multibillion-dollar business. Although Lexaria’s technology has other profound drug delivery applications, cannabis is where it looks set to have the most immediate impact.

This has led to a rush to control intangible assets around cannabis. It’s noteworthy that Chinese companies own more than half of the cannabis-related patents registered with the World Intellectual Property Organization, even though the cannabis trade remains illegal in China. China has a good eye for long-term developments and is setting itself up to control a growing global trade.

Outside of China, Lexaria is one of the world’s biggest holders of cannabis patents with eight patents already granted. The company currently holds four patents in the United States and four in Australia, covering aspects of its work to make beneficial drugs more palatable and effective. In addition, the company has further patent applications in process in more than 40 countries as part of a concerted strategy to expand its patent portfolio. This is made possible by the focused, tangible research and development being carried out by the company and is ultimately driven by the need to develop and control intangible assets.

Lexaria has disclosed it expects four more patents to be granted in 2018, bringing its total to twelve. Of note, all twelve of these are within a single patent family — and Lexaria expects patent success across all nine families of its current applications. Indeed the company recently revealed that it has seven more patent families in the works. Lexaria’s goal is to have some 200 patents pending or granted which, if achieved, could turn the organization into an IP behemoth in the global cannabis industry.

The Value of Patents

The commercial value of patents, even those still pending approval, can be extraordinary, reaching billions of dollars. In 2011, Nortel sold 6,000 patents and patent applications for $4.5 billion. The following year, AOL sold 925 patents to Microsoft for more than a billion dollars. While some companies develop patents purely to protect their work, others develop them specifically to be sold.

This focus on intangible assets drives many mergers and acquisitions. The Craftsy digital network developed online shows such as “Man about Cake” with a focus on audience rather than immediate profit, leading to the company’s acquisition by NBC Universal. The intangible assets of the company’s identity, reputation and audience had become highly valuable in themselves.

Similar priorities can be seen on a far larger scale in SoftBank’s $31.4 billion acquisition of chip designer ARM Holdings, or roughly $7 million per patent or patent application. ARM’s revenues were only $1.5 billion per year, but its 4,500 patents cover technology of potentially incredible value. In just three years, the desire to control patented drugs and processes in the healthcare sector overall resulted in 58 mergers and acquisitions with values of a billion dollars or more.

In Lexaria’s field of pharmaceuticals, patents are crucial, representing both the outcome of years of R&D and also potential market share and control in the emerging global cannabis business. Lexaria is attempting to own enough IP in the global cannabis industry that patent royalty revenues begin to flow worldwide.

Because patents are among the most valuable assets a company can own, a small investment in research now may pay off in a huge way in years to come. In a sector with such huge growth potential as cannabis, Lexaria’s IP portfolio may generate cash flows regardless of whether other companies intend to license the technology or not; by owning core IP, other companies may be forced to pay royalties. If Lexaria’s goal of owning hundreds of issued patents becomes a reality, the company’s patent portfolio could have huge ramifications on its valuation.

Powered by Intellectual Property

Lexaria isn’t alone in its commitment to strengthen its IP collateral. Tilray Inc. (NASDAQ: TLRY) is also focusing on building its IP portfolio including exclusive rights to at least 22 issued or pending patents. Tilray CEO Brendan Kennedy has observed that if cannabis companies are going to move forward, they’ll need to develop IP in both the medicinal and recreation aspects of the cannabis spectrum.

GW Pharmaceuticals Plc (NASDAQ: GWPH) has established a leading position in the development of plant-derived cannabinoid therapeutics through its intellectual property portfolio, proven drug discovery and development processes, and regulatory and manufacturing expertise. The company successfully developed the world’s first prescription medicine derived from the cannabis plant.

In addition to the eight provisional patents it has filed, Canopy Growth Corporation (NYSE: CGC) has updated applications relating to earlier insomnia patent applications, bringing its total number of U.S. provisional patent filings to 39. The filings are part of a concerted plan by Canopy Growth to deliver to patients and healthcare providers innovative medicines and health products targeting disease areas with substantial medical needs.

Aurora Cannabis, Inc.’s (OTCQX: ACBFF) pain-management patents are only part of the company’s commitment to creating a stronghold in the cannabis market. Aurora has become one of the fastest-growing cannabis companies, as evidenced by Aurora Sky, the company’s 800,000-square-foot flagship facility; by launching the world’s only mobile app for ordering medically prescribed cannabis; and by being the only LP to service two metropolitan areas with same-day delivery.

With so much value placed on intangible assets, patents are fueling growth and acquisitions worth billions of dollars. In the pharmaceutical sector and beyond, patents definitely appear to be where the big money is.

For more information on Lexaria Bioscience Corp., visit Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP)

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Hydroponic Hardware Key to Tapping Long-Term Profits of Burgeoning Cannabis Market

CannabisNewsWire Editorial Coverage: The North American cannabis market continues to accelerate as Canada rockets towards the October 17 deadline for the nationwide legalization of recreational marijuana.

Hydroponic market trying to keep up with booming cannabis market set to exceed $25 billion by 2021.
Continued expansion of cannabis cultivation and demand for controllable production parameters are a boon to hydroponics industry.
Healthcare sector increasing demand for CBD from sources such as industrial hemp.
Regulatory reform throughout North America and Europe driving change in overall space.

The milestone legislation appears set to open the door wider for companies pursuing a position in the promising sector, including those consolidating vectors within the still highly fragmented hydroponics supply sector. The global hydroponic market alone was worth nearly $3.5 billion last year and is set to break $10 billion by 2023, maintaining a healthy 18.2 percent CAGR. Recently projected revenue growth to more than $30 million next year illustrates the lofty aspirations of hydroponics supplier Sugarmade, Inc. (OTC: SGMD) (SGMD Profile), a company that recently reported a sequential revenue increase of some 215 percent and a year-over-year revenue increase of approximately 228 percent for revenues of just under $3 million in the most recent quarter. Scotts Miracle-Gro Company (NYSE: SMG) is another one to watch in this space, with an already well-established presence and the recent announcement that the company will acquire general hydroponics equipment supplier Sunlight Supply, Inc., for $450 million. An acquisition may also benefit Aurora Cannabis, Inc. (OTC: ACBFF), which recently announced its procurement of MedReleaf. The huge announcement of an additional $4 billion investment in researcher, cultivator and seller of extracts/flowers Tilray, Inc. (NASDAQ: TLRY), by beer giant Constellation Brands, Inc., has been unmistakable “handwriting on the wall” to many investors that the cannabis industry is here to stay. And Canopy Growth Corporation (NYSE: CGC) has also been bitten by the sector consolidation bug, as evidenced by the company’s recent snapping up of premium cannabis lifestyle brand Hiku Brands Company Ltd.

To view an infographic of this editorial, click here.

Hydroponic Picks and Shovels

With the North American Marijuana Index up 33 percent over the last month and up nearly 550 percent over the last three years, it appears that this could be the front end of an ongoing boom that may have yet to even see its true heyday — something that could be triggered by the adoption of more widespread legislative reforms across several U.S. states, occurring in ways similar to California’s cannabis reforms.

It is a well-known investing adage that those who developed long-term success during California’s gold rush made their money not from mining claims but from selling the necessary accoutrements miners needed, such as picks and shovels. The same phenomenology holds true today during the ongoing green rush, with hardware manufacturers and suppliers of grow systems poised to reap the rich, long-term rewards of an industry that is still just getting off the ground in many respects. Leading cannabis sector analysts at ArcView recently detailed how the North American market saw sales growth of 33 percent last year and projected that the market will reach $25 billion a year by 2021, maintaining a CAGR of 28 percent.

Cannabis prohibition will most likely come to an end in the United States, just as it has in Canada, echoing what previously occurred with the end of alcohol prohibition. To many analysts in the sector today, the legalization question is not if but when. Savvy investors seem to understand the naked reality that humans have been consuming cannabis for likely well over ten thousand years, stretching back to the apparently widespread consumption of seeds and oils in China, where the first recorded medical uses of the plant occurred almost five thousand years ago. Little wonder that the cannabidiol (CBD) market is growing by leaps and bounds, as the infusion of CBD into healthcare products becomes more prevalent. The Brightfield Group recently projected faster-than-anticipated growth for the CBD market, with sales projected to reach $22 billion or more by 2022.

A Rollup Strategy in Hydro Hardware

Product and brand marketing outfit Sugarmade, Inc. (OTC: SGMD), whose brands include ZenHydro.com, CarryOutSupplies.com and BudLife Cannabis Storage Solutions, is currently focused on increasing revenues by repeating the success of the company’s past strategic moves, such as last year’s master market agreement with BizRight Hydroponics, a highly successful and rapidly growing manufacturer and distributor of intelligently designed hardware geared specifically for the needs of the cannabis cultivation sector. The company recently revealed that, as part of a growing emphasis on exploiting a “picks and shovels” rollup approach to the burgeoning cannabis sector, Sugarmade is in acquisition talks with multiple hydroponic supply companies having parallel competencies.

Sugarmade CEO Jimmy Chan explained in a recent shareholder Q&A that targeting home growers as well as smaller, profitable companies in the sector — companies that already have exceptional hardware offerings for professional cannabis processors and cultivators — is something that looks to be highly accretive. The strategy is quite simple, because while there is an explosion of new cannabis ventures in the market, few of these pioneering entrepreneurs of profitable operations possess access to public markets or equity-financed capital.

Branching Out into CBD and Industrial Hemp

Sugarmade’s revenue generation plan isn’t limited to relying on expanding North American markets either. The company was obviously happy to announce expansion into the European hydroponics supply market recently, through a sizeable order via Amazon UK. This announcement comes amid an ongoing shift for the company from a majority of hydroponic-related revenue growth occurring in California and other West Coast markets to more geographically dispersed growth throughout other U.S. states that are also seeing regulatory easing.

In addition, Sugarmade announced in late August that the company has committed to investing $1 million over the next 12 months in Hempistry, Inc., the privately held cultivator of an ultra-high CBD strain of industrial hemp (less than 0.3 percent THC), which has reserved 23,000 acres of prime Kentucky farmland for the task. Moreover, Chan has been made an advisor of Hempistry, and the company’s investment will be in the form of common shares, positioning SGMD shareholders quite well should a Hempistry IPO ever come to the fore. A cultivation supply agreement signed between the two companies is the icing on the cake and demonstrates to investors how such a rollup strategy also represents additive revenue growth that will magnify Sugarmade’s already robust top-line growth rate.

Sugarmade is already in formal acquisition negotiations with at least two companies in online and retail hydroponics, as well as other agricultural cultivation supplies, and the company has made a special filing with the SEC to formally address these acquisitive ambitions. Together with the industrial hemp and CBD initiative engaged in via the Hempistry investment, SGMD’s management team feels that shareholders are now well-positioned for considerable upside, as the company skillfully manages its aggressively planned growth rate and hones its focus more toward cultivation-related revenue sources.

Cannabis-Related Hydroponics — A Tricky Market

The retail market for hydroponics, generated by cannabis growers who are often highly knowledgeable about different types of grow equipment, is expected to become an increasingly contested arena in the coming years. For a disruption-minded brand marketing company such as Sugarmade, which is now one of the biggest publicly traded companies in cannabis-related hydroponics, the need to speak directly to consumers in a language they understand is readily apparent. The BizRight deal speaks volumes, given that BizRight has developed an impressive rapport with customers and partners over the last seven years, becoming one of the most trusted names today in world-class hydroponics.

Scotts Miracle-Gro Company (NYSE: SMG) had a strong quarter recently, with consumer purchases up 5.4 percent amid continued strength of the company’s core consumer lawn and garden products. The aforementioned acquisition of Sunlight Supply will reportedly bring the company’s Hawthorne Gardening segment up to an estimated $600 million a year in total sales, giving the company an impressive footprint across the general hydroponics supply market.

Aurora Cannabis, Inc. (OTC: ACBFF) is one of the biggest and fastest growing cannabis companies in the game today, with a currently funded capacity of nearly 950,000 pounds of product per year and an annual production target over 1.256 million pounds post-acquisition of Ontario-based MedReleaf. With a production footprint spanning nine Canadian and two European production facilities, Aurora is one of the most enviably positioned cultivators in the industry and has the scale necessary to ensure low production costs as well as consistently high yields. The MedReleaf acquisition brings even more high-yield cultivation technology firepower to the table.

Tilray, Inc. (NASDAQ: TLRY), which is focused on research, cultivation, production and distribution of medical cannabis and cannabinoids, has seen some impressive share price appreciation since the company’s IPO in July. The announcement in September that the company was granted DEA approval to import a cannabinoid study drug to the United States from Canada for use in a neurological movement disorder (essential tremor) study has really attracted a lot of investors to the company’s unique offerings and global reach. Tilray’s sophisticated array of full-spectrum and highly purified extracts deserves a second look from investors who may just be caught up in the hype and do not fully appreciate the company’s portfolio and value proposition.

Canopy Growth Corporation (NYSE: CGC) is riding high on a huge capital injection from Constellation Brands, which controls approximately 38 percent of the company post-expansion of this important strategic partnership, which has also served as something of a watershed moment for the cannabis industry. Canopy is wasting no time when it comes to exploiting this new muscle, recently announcing a multiyear supply and service agreement with Centric Health Corp. Canopy also recently announced that its Tweed Farms subsidiary received license amendments approving all remaining greenhouse space at its primary site, expanding Canopy’s total licensed grow footprint to an impressive 3.2 million square feet.

Lean, Mean, Green Machine

Sugarmade has put together a straightforward revenue growth strategy that has been tried and tested in other markets. Successfully executing a rollup strategy in the highly fragmented hydroponics space will come down to the company’s ability to continue picking superb targets that will be genuinely accretive to shareholder value over the longer term and directly additive to the company’s already impressive top-line growth. The Hempistry investment, as well as further expansion into hydroponics supply, is a win-win for both target companies and investors alike.

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

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Canadian Cannabis Legalization Set to Transform the Industrial Hemp Industry

CannabisNewsWire Editorial Coverage: The legalization of cannabis in Canada is about to bring big changes not just for medical cannabis companies but for hemp growers as well.

The law legalizing recreational cannabis in Canada will come into force on October 17.
This will create new opportunities for hemp growers to produce the plant for CBD extraction.
Hemp growers will now be able to profit from all parts of the plant.
Cannabis companies are experimenting with growing techniques, expanding their businesses, and seeking supply agreements in preparation for the change.

Marijuana Company of America Inc. (OTC: MCOA) (MCOA Profile), which grows industrial hemp in Canada, will now be able to sell leaves and flowers as well as other parts of its plants, and is preserving this year’s crop in preparation for the change. In the United States, Isodiol International, Inc. (OTC: ISOLF) is raising the profile of the industry through a celebrity partnership and the expansion of its retail chain. Aurora Cannabis, Inc. (OTC: ACBFF) has been acquiring financing to fund a program of expansions and takeovers, preparing the way to dominate the American market. Organigram Holdings, Inc. (OTC: OGRMF) and Emerald Health Therapeutics (OTC: EMHTF) have both set up a string of supply agreements, giving them quick access to the Canadian recreational market come October.

To view an infographic of this editorial, click here.

Transforming Canada’s Cannabis Industry

On October 17, cannabis will become legal in Canada. Under the provisions of the Cannabis Act, Canadians will be able to buy and consume cannabis for recreational as well as medical purposes. Careful licensing, together with clear rules around cultivation and processing, will ensure that a previously illegal industry becomes a well-regulated part of the legal economy. As Prime Minister Trudeau said when the law was passed, “It’s been too easy for our kids to get marijuana — and for criminals to reap the profits. Today, we change that.”

The Cannabis Act promises to be a great boon to the Canadian economy. Since 2014, the Canadian medical cannabis industry has grown to include over 100 licensed companies, many of which will be able to expand their sales and research under the new rules. In a year’s time, further rules will come into force that allow the sale of concentrates and edible cannabis products, creating a cannabis food and drink industry. But one of the biggest changes will take place within the industrial hemp industry.

Cannabis without the High

While the term “cannabis” is most often used to refer to plants with psychoactive effects, it actually covers a broader range of crops. One of the most historically prevalent varieties of cannabis is industrial hemp, a form of cannabis grown by companies such as the Marijuana Company of America (OTC: MCOA).

Industrial hemp is distinct from more controversial forms of cannabis — marijuana — in that it does not contain tetrahydrocannabinol (THC), the active ingredient that gets users high, but rather it contains cannabidiol (CBD), which has recently grown in popularity due to its variety of medicinal benefits. Hemp was used for hundreds of years to produce fibers for cloth and rope and was widely grown in North America. But for most of the past century, it has been out of production thanks to broad-ranging anti-cannabis legislation.

The past few years have seen a resurgence for industrial hemp. Legislation created for the cultivation of medical marijuana has created the opportunity for companies such as MCOA to grow hemp in Canada. In the United States, the 2014 Farm Bill created legal space for trial crops of hemp. That bill’s 2018 successor appears set to make it entirely legal in the United States, allowing farmers to grow a highly profitable new crop.

The passing of the Cannabis Act will further improve the potential of hemp in Canada, as it will allow producers to extract cannabidiol (CBD). Cannabidiol is an active ingredient that’s commonly found in high concentrations in certain varieties of industrial hemp. It doesn’t have the psychoactive properties of THC but has been shown to have beneficial effects on health. As a result, it’s used in a growing variety of health and wellness products, including MCOA’s brand hempSMART.

Using the Whole Plant

Up until now, Canadian hemp producers have been limited in what they can do with the plant. The seeds could be extracted and used; fibers could be turned into textiles; and leftover elements known as hurds could be turned into either animal feed or construction materials. The use of leaves and flowers was specifically prohibited.

The Cannabis Act allows for a broader range of uses. Health Canada has proposed the introduction of new industrial hemp licenses to make this a reality. Under the proposed system, industrial hemp producers will be able to sell the whole plant or any of its parts to other licensed operators within the hemp industry. They could even process it themselves, extracting CBD oil as well as seeds, fibers and hurds.

It’s a change that will create a more efficient and profitable industry, as parts of the plant will no longer go to waste. And growing interest in CBD as a wellness ingredient could lead to a significant rise in income for hemp farmers. Companies such as MCOA, whose operations cover the whole industrial chain from hemp production to the sale of CBD products, will be able to build solid, sustainable supply chains that maximize profits at every step.

This is all before taking into account the possibility of agricultural subsidies. There is currently disagreement within Canada over whether cannabis growers will be eligible for subsidies under existing rules, but with the arrival of cannabis-based foods and beverages next year, lines will become increasingly blurry. MCOA and its joint venture partner, Global Hemp Group Inc., have received financial support from Canadian government agencies to research hemp cultivation. As the commercial landscape changes, hemp producers may soon find themselves eligible for even more government help.

Sowing the Seeds for a Growing Industry

MCOA’s growth in the Canadian hemp sector comes through its establishment of a high-yielding CBD hemp cultivation project in New Brunswick (NB). This collaboration with Global Hemp Group has revived hemp cultivation in the region 20 years after a previous effort failed.

The joint venture partners are in process of completion of the first phase of what is known as the Hemp Agro-Industrial Zone, or HAIZ. The aim of the HAIZ is to provide a steady supply of hemp by building a local industrial cluster, guaranteeing a market for farmers and leading to year-round jobs for others in the region. Through trial crops and careful measurement of the results, the project is providing valuable data on important issues such as pests, fertilizers and growth rates.

Recent developments at the site include the installation of drying equipment in preparation for processing. In the short term, this will allow the company to effectively store its current harvest until it can be sold and processed under the rules coming in October. In the longer term, it will increase its options for growing, processing and selling hemp. The joint venture partners are currently in the process of negotiating off-take agreements with extraction companies to sell the biomass produced during the October harvest in New Brunswick.

MCOA and its partners in New Brunswick have been finding ingenious ways to improve techniques impeded by decades outside the law. This year, the team in NB experimented with a modified bean harvester to strip leaves and flowers from the plants without picking up much straw. Based on the results, this technique is being extended to the entire 125-acre project.

Cannabis Cultivation Creates New Industry

In less than two decades, a whole new industry has grown up around the cultivation of hemp and other forms of cannabis. Even with restrictions still tight in much of the world, companies are finding ways to legally profit from these crops.

Isodiol International, Inc. (OTC: ISOLF) has become an important and active voice for the industry, employing former NFL player Marvin Washington as a director and spokesperson. The company has developed a variety of cannabis and CBD-derived products, tapping into the medical and vaping markets. Its KURE Corp subsidiary provides a strong retail front and has recently set its sights on further expansion through new and acquired shops.

A prominent player within the industry, Aurora Cannabis, Inc. (OTC: ACBFF) is making the most of a young market to rapidly expand its business. A $150 million loan from the Bank of Montreal is giving it a short-term financial boost to get ahead of the long-term game. It’s this sort of long-term thinking that has led the company to acquisitions such as the takeover of MedReleaf, increasing Aurora’s market share. Some commentators have compared this strategy with that of Amazon, focusing on market dominance as the route to profit.

Organigram Holdings, Inc. (OTC: OGRMF), a medical cannabis company, is preparing to expand into Canada’s recreational market in October. The company has established a number of agreements with other companies, most recently the Nova Scotia Liquor Corporation, to supply its products to stores. These agreements will ensure that the legal recreational market quickly grows from a principle to a reality.

Emerald Health Therapeutics (OTC: EMHTF) is also setting up supplier agreements to give it a place in the recreational starting lineup. Its partners include the Newfoundland Labrador Liquor Corporation and Ontario Cannabis Retail Corporation.

The Canadian cannabis industry is set to experience a transformation on October 17, one that will prepare companies to expand as laws change elsewhere in the world. From medical cannabis companies to hemp growers, many business enterprises are likely to profit from this change.

For more information on Marijuana Company of America, visit Marijuana Company of America, Inc. (OTC: MCOA)

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Latest Farm Bill Developments Hold Out Hope for Hemp Farmers

CannabisNewsWire Editorial Coverage: After years of wrangling, the U.S. Congress stands on the verge of legalizing the cultivation of industrial hemp.

Hemp is a variety of the cannabis sativa plant that doesn’t generate a psychoactive effect.
Traditionally used to produce cloth and rope, hemp can also now be used in wellness products and food.
Competing legislations by the House and Senate are being aligned with an anticipated September 30 deadline.
The legalization of hemp has cross-party support and appears likely to pass.

The expected change in U.S. law will be beneficial for companies such as Marijuana Company of America, Inc. (OTC: MCOA) (MCOA Profile), which is already invested in industrial hemp and support for hemp growers. Across the border, Canopy Growth Corp. (NYSE: CGC) has established acres of Canadian hemp cultivation and gained financial backing that would support huge growth. Aurora Cannabis, Inc. (OTCQX: ACBFF) has also received substantial funding in the past few months, which will help its ongoing expansion effort. Hemp cultivation will provide plentiful CBD to be used by companies such as CV Sciences, Inc. (OTC: CVSI) as an ingredient in a wide and growing range of health and wellness products. All this growth is aided by support companies such as Terra Tech Corp. (OTC: TRTC), which provides equipment for cannabis cultivators.

To view an infographic of this editorial, click here.

Hemp: Caught Between Politics and Business

Industrial hemp is a crop with a strange history in the United States. For centuries, it was used to produce products such as ropes and sails, playing an integral part in the economy. This ended in the twentieth century when hemp was caught up in a broad ban on the cannabis family of plants, despite the fact that hemp itself is not usable as a recreational drug. Now its tentative return depends upon the outcome of a far broader agricultural bill.

Because it doesn’t share the psychoactive properties of marijuana, hemp has potential to be regulated and grown separately. Early tests in restoring this industry have produced significant profits for farmers. If the political will can be found to change its status, it could create great opportunities for businesses and their suppliers.

Hemp Cultivation Project in the United States

Several companies, including Marijuana Company of America (OTC: MCOA), are already growing hemp in the United States with their Scio, Oregon Cultivation Project, in conjunction with their joint venture partner Global Hemp Group Inc. (CSE: GHG) (OTC: GBHPF) (FRANKFURT: GHG).

Under their high-yielding CBD hemp cultivation projects, the two joint venture partners have formed Covered Bridge Acres, LTD. The key to the project was the acquisition of a 109-acre agricultural property in Scio, Oregon, with a history of hemp cultivation over the past few years. In July 2018, 40,000 hemp clones were planted on the property for Cannabidiol (CBD) propagation on approximately 33 acres of the property.

MCOA and GHG are now in the process of evaluating different harvesting, drying, storage and processing strategies in preparation of an early October harvest. The joint venture partners are also in negotiations with guaranteed offtake agreement offers and are considering strategies involved with selling the attained biomass from harvest in bulk.

When Is a Drug Not a Drug?

Hemp is one of a range of different cannabis plants. Unlike the versions smoked by recreational users, it doesn’t contain significant quantities of tetrahydrocannabinol (THC), the chemical that gets smokers high. It does contain the active ingredient cannabidiol (CBD), which has been widely reported to have medicinal value — reports that now have been substantiated by the U.S. Food and Drug Administration. Importantly, hemp also contains fibers that can be used for a wide range of purposes.

In the twentieth century, cannabis plants were banned as the U.S. government and others worldwide cracked down on drug use. Though hemp doesn’t get drug users high, the governments apparently banned the cannabis plant because of the difficulty of distinguishing between the plant varieties. The decision to include hemp in a list of banned drugs was based on political expediency rather than science.

Fast forward to the twenty-first century and the rules surrounding hemp have started to change, allowing the creation of companies such as MCOA. Hemp has a huge number of potential uses, including the manufacture of cloth and paper and the processing of food. Under licenses designed to cater to research and the medical market, farmers have begun growing industrial hemp with expectations of earning up to 150 times as much money per acre of land as they would growing alfalfa.

The Great Agricultural Debate

Farm bills are an important part of how the U.S. government establishes policy around food and agricultural production and how that policy is enshrined in law. Roughly every five years, Congress creates a bill covering a wide range of agricultural topics. With its huge financial implications and many different political angles, passing the bill can be a messy business.

Following a pilot research program for hemp growers created in the 2014 Farm Bill, the current Farm Bill includes the legalization of industrial hemp. There’s a lot at stake for hemp growers as well as those hoping to enter and establish a foothold in the industry. The U.S. Hemp Roundtable has gone so far as to hire attorney Daniel Cameron, an experienced Washington legal counsel, to lead its advocacy on the bill.

The House and Senate have both passed versions of the 2018 Farm Bill that support the legalization of the hemp industry without drug enforcement oversight. On Sept. 5, the first bicameral conference committee on this Farm Bill began meeting in an attempt to resolve competing elements between the two bills, with a deadline to present the president with an agreed-on final version of the bill by the end of the month.

The good news for companies such as MCOA is that the hemp element of the Farm Bill has cross-party support. Hemp’s potential to revive the fortunes of American farmers makes it a potential vote-winner for rural politicians nervously eyeing up the polls. The bad news is that in a bill affecting everything from agricultural subsidies to environmental conservation to food stamps, there’s plenty for politicians to disagree over.

Hemp Products

Sail cloth and rigging were enough to make hemp profitable in the eighteenth century, but the world has changed since then. So what sort of products can the world expect to see from a resurgent hemp market?

Many products will undoubtedly be targeted towards the health and wellness market, using CBD as an active ingredient. A leading example of these types of products is MCOA’s hempSMART line, including hempSMART Brain, which is developed to help with alertness and concentration; hempSMART Pain Capsules and Pain Cream, formulated to be an effective product combination for the temporary relief of minor pain associated with physical activity; hempSMART Full Spectrum Drops; and hempSMART Face, a nourishing facial moisturizer infused with Ayurvedic herbs and botancials.

A Growing Industry

Many companies already engaged in the cannabis market are exploring ways they may be able to benefit from the growing popularity of hemp. Canopy Growth Corp. (NYSE: CGC), one of Canada’s foremost cannabis companies, has a hemp division with expertise in this area and acres of hemp production already under way. The company also recently received a $4 billion investment from Constellation Brands, a leading beverage company, to help it expand within the fast-growing cannabis market. With such levels of investment, Canopy Growth will be in a strong position to increase production as the market for hemp products grows.

The medical use of CBD is a major area of interest for Aurora Cannabis, Inc. (OTCQX: ACBFF), which is developing different strains of cannabis to benefit from their different medical properties. Like Canopy Growth, Aurora has an eye to expansion while the market is still young. Its recent takeover of MedReleaf appears to be just one step in a far bigger plan. The company has just taken out a $150 million loan with the Bank of Montreal, betting on the power of a short-term financial boost to make it a market leader, more than capable of repaying the debt when the time comes.

Another company exploring the medical potential of CBD is CV Sciences, Inc. (OTC: CVSI). CV Sciences has a strong focus on research, with a division devoted to developing new drugs that use CBD as an active ingredient. Its consumer products division works through health care providers, health food shops and online sales to market CBD-based wellness products.

The increasing number of growers is good news for supporting companies such as Terra Tech Corp. (OTC: TRTC). Terra Tech produces growing systems — including moving tables and hydroponics — for cannabis farmers. These products are designed to increase the productivity of indoor cannabis cultivation, which is where a lot of CBD and marijuana plants are grown. The company’s environmentally friendly systems can reduce waste and thereby cut costs while also increasing productivity.

The anticipated changes in the U.S. laws governing hemp cultivation signal implications for a large number of companies in the wider cannabis sector as well. If the Farm Bill gets through Congress as expected this month, it could open up a sea change in agricultural production and U.S. wellness industry products.

For more information on Marijuana Company of America, visit Marijuana Company of America, Inc. (OTC: MCOA)

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Proposed Legal Changes Offer a Boost for Cannabidiol Companies in the United States

CannabisNewsWire Editorial Coverage: Recent growth in the market for cannabidiol (CBD) products has been strong and appears poised to continue.

CBD is an active ingredient derived from industrial hemp that does not contain the psychoactive or “high” effect of marijuana.
CBD is used in a wide range of products, from cosmetics to pet supplements.
The recent acceptance of a CBD-based medicine by U.S. authorities creates potential for legal change that could make the sale of CBD easier.
Attention in the mainstream press has created a measure of gravitas for CBD.

Marijuana Company of America Inc. (OTC: MCOA) (MCOA Profile) has produced a diverse range of CBD products to promote well-being. Cannabis company Canopy Growth Corp. (NYSE: CGC) has created a range of CBD oils for its customers while expanding its global reach. Aurora Cannabis, Inc. (OTCQX: ACBFF) provides pain relief through a range of cannabis strains and is set to expand its R&D potential through a takeover. Terra Tech Corp. (OTC: TRTC) provides equipment to cultivate cannabis and would benefit from a change in the legal landscape alongside its customers. PotNetwork Holding, Inc. (OTC: POTN) holds several subsidiary companies benefiting from cannabis and CBD products, thanks to the diversity of the sector.

U.S. Authorities Consider Legal Changes

For decades, federal rules have held back cannabinoid-derived medicines in the United States. Though the majority of states now allow medical marijuana and associated cannabinoid-derived products, national legislation is still grounded in the war on drugs. The cannabis and hemp plants are classified as a Schedule I drug, meaning that it is legally seen as both dangerous and without medical benefits. Even treatments using cannabidiol (CBD), an active ingredient found in hemp and cannabis that is nonpsychoactive, currently fall under this classification.

That may be about to change. Following the Food and Drug Administration’s (FDA) ground-breaking acceptance of prescription drug Epidiolex, the future of CBD products for medicinal use appears to be up in the air. Meanwhile, legislation from both sides of America’s political divide offers the possibility of bigger changes.

Tackling the Law

Progress on the legal status of CBD is being eagerly watched by companies such as Marijuana Company of America, Inc. (OTC: MCOA). With a focus on industrial hemp and hemp-derived cannabidiol products, MCOA doesn’t produce and sell medical or recreational marijuana. But because hemp products are derived from the same family of plants, they fall under the same stigmas associated with the plant.

Increasingly liberal legislation at the state level has allowed companies such as MCOA to thrive in the United States. But that evidence-based liberalization is in conflict with the federal government’s decades-long prohibition, which some within the current conservative government are looking to reinforce rather than relax.

Despite this, the FDA approved CBD-based Epidiolex in June. Epidiolex has been developed to counter the seizures brought on by two rare ailments. Its approval for sale as a prescription medicine doesn’t mean that similar medications will automatically be approved, but it does open the possibility. In light of the approval, repeated calls have been made for the FDA to look again at the scheduling of certain cannabinoids and the broader picture of cannabis-derived medicines.

At the same time, several pieces of legislation that could change CBD’s status are being considered by Congress. Some of those are actually being proposed by Republicans, making it appear less likely that they will be blocked by America’s more conservative party. It looks increasingly likely that rescheduling or other legislative changes may soon make it easier for companies to cultivate industrial hemp as well as produce and market CBD products.

When such change comes, companies with a wide array of products are likely to be the ones that will benefit most. With a range that already runs from pain treatment to therapies for pet care and memory enhancement, MCOA’s line of products is representative of how versatile the use of CBD can be. A loosening of restrictions would make it easier to both broaden this selection and make it available to a wider market.

CBD Goes Mainstream

The growth of companies such as MCOA is helped by increasing mainstream attention on CBD. Forbes has reported on research into the product by the World Health Organization. Esquire has profiled the rise and diverse uses of this ingredient. The Washington Post has explored the growing popularity of CBD among celebrities, consumers and wellness professionals.

Because CBD doesn’t get a user high, it might seem strange that the marijuana derivative is becoming one of the most popular hemp-derived products. But the wellness market is big business in America as consumers clamor for ways to improve their energy levels and reduce the low-key aches and pains of everyday life. CBD’s reputation for improving health is making it popular among people who want the reported medical benefits without having to deal with the high.

The result is a fast-growing market. Consumer sales of CBD amounted to $262.2 million in the United States in 2016, more than double what they had been only two years before. Based on the market’s ongoing growth, analysts have predicted that the market will hit the billion-dollar mark by 2021.

More than half of CBD consumers take the products every day with anxiety, anti-inflammation and joint pain being the top symptoms the products are designed to impact. Successful treatment of these conditions would likely create a large base of long-term consumers.

The Varied Uses of CBD

This large and growing consumer base is looking to CBD for potential impact on a wide range of wellness concerns. The ability of companies such as MCOA to provide a range of products aimed at these symptoms would allow those companies to tap into a broad share of the market. MCOA’s hempSMART™ products are a great example of how many uses a single company can find for CBD.

HempSMART Brain is a patent-pending nootropic product designed to support natural brain function, which fits with what many consumers expect from CBD because the product is focused on the mind. These innovative capsules can be taken to support alertness and concentration.

HempSMART Pain is designed to provide relief from pain associated with physical activity by combining CBD with botanical supplements. Their hempSMART Pain Cream is designed to provide temporary relief from and soothe sore, aching muscles and joints.

The company most recently launched a new cosmetic product, hempSMART Face, a CBD facial moisturizer that has been designed to refresh, replenish and restore skin cells on the face. And perhaps most surprising is the company’s offering of sublingual CBD tinctures, including hempSMART Full-Spectrum Drops and hempSMART Pet Drops, a bacon-flavored supplement formulated to provide cats and dogs with renewed energy as well as a tasty treat.

Such a diverse range of products could help a company such as MCOA attract the attention of CBD consumers. It might also allow consumers to use CBD in more areas of their lives, expanding the CBD market.

Companies Set to Benefit

It’s not just the variety of CBD products that bodes well for the industry — it’s also the range of companies. If the legal status of cannabis and cannabis-derived products changes, an entire sector is set to benefit.

Canopy Growth Corp. (NYSE: CGC), a leading player in retail cannabis, is using its research in the area to create CBD oils. By balancing the ratio of CBD and THC within its oils, Canopy Growth caters to differing wellness needs. Already a trusted player within the Canadian market, the company has acquired a subsidiary in the Kingdom of Lesotho and established another in Latin America. By looking to the wider world, the company is further expanding the global market for cannabis and CBD products.

One of the leading areas of interest for CBD is in pain relief. Aurora Cannabis, Inc. (OTCQX: ACBFF), one of the largest cannabis companies in the world, has established a strong position in this sector. The company has developed a large range of different strains of medical cannabis that can be used in developing new products as well as in retail. The Canadian Competition Bureau recently approved a takeover of MedReleaf Corp. (TSX: LEAF), a research-oriented company, by Aurora, leaving the company in a stronger position to make the most of the coming changes.

Rescheduling cannabis would benefit not just the companies selling cannabis and CBD products but also those supporting them. Terra Tech Corp. (OTC: TRTC) is a producer of environmentally friendly growing systems for cannabis growers. Its hydroponic systems use moving tables and recycled waste water to increase yields and reduce costs. As it becomes easier to grow and market cannabis, more growers may turn to Terra Tech for the equipment they need.

The maturity of the CBD and cannabis sector has also led to the emergence of several holding companies, including PotNetwork Holding, Inc. (OTC: POTN). This company’s subsidiaries include Diamond CBD, First Capital Venture and PotNetwork. Through these entities, PotNetwork benefits from growth across different parts of the industry, as well as supporting other companies in their expansion.

The market for CBD and other cannabis-derived products is already strong. With the prospect of legal rescheduling increasingly likely, these companies seem poised to benefit from changing attitudes in the United States and beyond.

For more information on Marijuana Company of America, visit Marijuana Company of America, Inc. (OTC: MCOA)

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Hemp CBD Products Offer a Natural Alternative to Synthetic-Derived Medicines

CannabisNewsWire Editorial Coverage: The opioid crisis in North America has drawn attention to the urgent need for alternative medicines, and hemp CBD products offer a viable plant-based option.

An active ingredient in industrial hemp, Cannabidiol (CBD) can be extracted to be used in a number of different products such as topicals, tinctures, and capsules.
The World Health Organization (WHO) has found CBD to be nonpsychoactive, nonaddictive, and to have a positive effect on patients’ health.
Scientific studies have shown CBD to be effective in pain relief and, therefore, it may be a healthier alternative to addictive opioids.

Marijuana Company of America Inc. (OTC: MCOA) (MCOA Profile) is actively engaged in producing all-natural products containing CBD, including a recently released pain cream that can be applied topically to relieve discomfort. Cronos Group, Inc. (NASDAQ: CRON) has recently received a boost in funds and a license to produce cannabis products in Australia, allowing the company to grow its operations. Canopy Growth Corporation (NYSE: CGC), which produces oils containing CBD, is expanding into Lesotho and Colombia, exploring a global pain-relief market. Aurora Cannabis, Inc. (OTCQX: ACBFF), which already produces a wide range of medical marijuana strains, is in the process of acquiring an R&D company to strengthen its offerings. And Organigram Holdings, Inc. (OTCQB: OGRMF) produces medical strains that include a CBD option for patients and care providers eager to benefit from this ingredient.

The Opioid Epidemic

The United States is facing one of its greatest medical crises in decades — the opioid epidemic. During 2016 alone, 42,249 people died of opioid overdoses, 115 deaths every day. Despite the attention being turned onto this problem, most states are seeing further increases rather than declines in opioid abuse and its consequences. As the problem grows, physicians, emergency rooms and other healthcare providers are feeling pressure to find effective treatments for pain management, one of the largest causes of the growing problem.

Though illegal drugs such as heroin play their part, this crisis is fuelled by prescription drugs. The prescription painkiller problem began in the 1990s, when pharmaceutical companies persuaded healthcare providers that they could prescribe opioid painkillers without risk of addiction. This proved to be untrue, as large numbers of patients began misusing the drugs. Today, an estimated 21–29 percent of patients prescribed opioids misuse them, with 8–12 percent developing a disorder. And while misuse of legal drugs is a huge problem in its own right, it is also the gateway to illegal opioids. However, by the time the problem was recognized, the medical sector had become reliant on opioids. Pain relief is a critical part of modern medicine, which helps patients manage chronic conditions as well as cope with recovery from shorter-term illnesses, accidents and operations. Simply abandoning opioids was not an option.

An Alternative to Opioids

One option gaining increased attention may be the use of all-natural cannabidiol (CBD) products, as a plant-derived option to the use of synthetic prescription painkillers. These products do not contain THC, the ingredient that gets cannabis users high, and so can be used to provide relief without impairing a user’s normal mental activities. Products containing CBD, which have recently been developed by companies such as Marijuana Company of America (MCOA Profile), may offer a viable alternative to synthetic medicines.

CBD applications and uses have benefitted from changes surrounding that industry. Licenses to grow industrial hemp have allowed companies to combine agriculture, R&D and product development with those seeking medical uses for hemp. MCOA’s recently established cultivation in Oregon is a prime example of this work, with researchers developing better growing techniques and improved plant strains that will allow them to extract higher yields of CBD oil.

A Healthier Option?

Scientific research into the effectiveness of CBD supports its potential in pain relief. A review of recent studies found that it was generally effective in helping patients manage their pain. Not only can it provide a viable alternative to opioid painkillers.

The advantage of CBD over opioids appear to be that it may provide a safer, healthier treatment option. CBD appears to be far less physically and mentally addictive than many prescribed pain medications. Patients can use it without experiencing the high risks of addiction that accompany many prescription painkillers.

The World Health Organization released a scientific research report conducted on CBD, which found the compound to be nonpsychoactive and nonaddictive; the report also noted that it has multiple health benefits. CBD oils provide patients with access to the relief that medical marijuana would bring but without many of the side effects.

Applied Medicine

By providing alternatives for relief, companies working with CBD are providing a pathway out of the opioid epidemic. One example of a CBD pain-management product is MCOA’s recently released hempSMART Pain Cream.

HempSMART Pain Cream is a topical treatment developed to reduce discomfort, support joint mobility, and relax muscles. Each bottle contains 300mg of full-spectrum CBD derived from industrial hemp, combined with other natural plant-based extracts. The cream contains the company’s own formulation of Ayurvedic herbs along with menthol, cayenne pepper extract, rosemary oil, aloe gel, white willow bark, arnica, wintergreen extract and tea tree oil. Together, these ingredients appear to provide an immediate cooling and soothing sensation, while the CBD helps to ease discomfort.

“We will continue to expand our health and wellness lines in 2018 to include more products,” said MCOA CEO Donald Steinberg. “Pain Cream has been enthusiastically received by our affiliates and customers.”

Pain Cream is just one of many hempSMART products already developed by MCOA. As more is learned about the potential uses of CBD in wellness products, the company will likely develop new products and treatments. From hempSMART Brain, a brain-enhancing formulation, to hempSMART Face, a CBD-infused cosmetic, the company is finding new ways to deliver the benefits of this chemical compound.

Cannabis Companies Explore Potential of CBD

Meanwhile, patients looking for pain relief have the chance to move away from prescription drugs and into treatments without the same risks of addiction. A number of other companies are also exploring the potential of CBD treatments.

One of the most prominent is Cronos Group, Inc. (NASDAQ: CRON), the first Nasdaq-traded company purely focused on cannabis. Though based in North America, the company has recently started branching out, obtaining a manufacturing license to produce products based on medical cannabis in Australia. Boosted by funds raised through a recent public offering, the company is set to become a global player in the field of cannabis-derived treatments, including pain medication.

Canopy Growth Corporation (NYSE: CGC) is also looking to bring cannabis and CBD treatments to a wider market. Having previously acquired a cannabis company in Lesotho, giving it access to the African market, the company is now expanding into Latin America through the acquisition of a Colombian company. Canopy Growth produces oils with varying levels of CBD to meet the varying needs of customers.

One of the world’s largest cannabis companies, Aurora Cannabis, Inc. (OTCQX: ACBFF) is heavily involved in pain relief through its wide selection of medical cannabis strains. The company recently took a step toward improving its research into cannabis-derived medicine, thanks to the Canadian Competition Bureau’s approval of a proposed takeover of MedReleaf. By acquiring another R&D-driven cannabis company, Aurora hopes to expand its own research into CBD-based medicines.

Medical cannabis company Organigram Holdings, Inc. (OTCQB: OGRMF) has produced a range of different strains, including CBD-rich options. It has recently been licensed to expand its production facilities, allowing the company to better meet the needs of a growing market.

With companies developing hemp-derived, CBD-based wellness products, a new alternative to synthetic opioid-based medications is emerging. CBD-based options may also provide access to the benefits of medical cannabis without that product’s mind-altering properties and other worrisome side effects.

For more information on Marijuana Company of America, visit Marijuana Company of America, Inc. (OTC: MCOA)

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Government Interest in Hemp Diversity Signals Strong Future for American Cannabis Industry

CannabisNewsWire Editorial Coverage: Recent U.S. government interest in ensuring industrial hemp supply signals a period of growth for the cannabinoid industry. Marijuana Company of America Inc. (OTC: MCOA) (MCOA Profile) is contributing to this growth through new hemp cultivation projects in both Canada and the U.S., to support its hempSMART subsidiary. Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) is benefiting from a cross-border venture that gives it access to new scientific advances and has seen its shares reach top exchanges. Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) has secured government licensing needed to become one of Canada’s leading retailers, while acquiring a subsidiary company in Lesotho to cater to an international market. Aurora Cannabis Inc. (TSX: ACB) (OTCQX: ACBFF) has announced a new range of products that provide medical cannabis with a high concentration of active ingredients. OrganiGram Holdings Inc. (TSX-V: OGI) (OTCQB: OGRMF) has struck a deal for access to advanced extraction technology, while also gaining a license to export its products to Australia.

Senate Signals Support for Cannabis Seedbank

The United States government has a complicated relationship with cannabis. Since the mid-20^th Century, it has clamped down on the use of the plant for any purpose, particularly during the “war on drugs” from the 1980s onward. Over the past decade, some states have legalized the farming and sale of the cannabis sativa plant either as medicine, as a recreational drug, or in the form of industrial hemp. But the federal government has remained reticent about shifting its stance.

It seems that perceptions are now changing. The Senate Appropriations Committee, one of the most powerful bodies in government, has acknowledged the growing importance of industrial hemp for American farmers and called for the creation of a hemp seed back. Half a million dollars will be spent ensuring that America has a genetically strong stock of high quality hemp seeds, to support both farmers and researchers.

Building Better Strains

While the committee’s plan to build up seed stocks is intended to support the national interest, some companies are already working on improving industrial hemp growth for reasons of self-interest. Developing a diverse range of strains, each tailored to different purposes, is important for these companies. Industrial hemp is often valued for the quality of its fibres and the medicinal cannabinoids that can be extracted from the plant and implementing better growing techniques can lead to improved crops yields.

Among the companies looking to create more efficient hemp yields is the Marijuana Company of America (MCOA Profile). A company with a diverse portfolio of investments and joint ventures in the cannabis and industrial hemp sectors, MCOA is involved in several projects intended to improve the plants available to producers and consumers.

Together with the Global Hemp Group, MCOA has launched a project to encourage industrial hemp cultivation in New Brunswick. Previous attempts to develop the industry in the region failed twenty years ago, but now the market for the product has grown. The aim is to develop an industrial cluster around the hemp crop, ensuring a market for farmers, consistent job opportunities, and to implement the proper structure to develop Hemp Agro-Industrial Zones, or HAIZ, projects in other areas.

Scientific testing to improve the growing process is an important part of HAIZ. This has been made possible through cooperation with the Canadian government’s Department of Aquaculture Agriculture and Fisheries (DAAF). The department will be contributing fertilizers to the project and carrying out fertility trials on reserved plots of land. Together with soil testing and crop rotation, this will help to develop more fertile organic growing conditions for the hemp.

With legalization of the extraction of cannabinoids from industrial hemp on the horizon, Canada is an important market for cannabinoid-based companies. Recreational use alone is expected to contribute $900 million to the industry, which already serves medical users in Canada. The work in New Brunswick gives MCOA an important foothold in this market.

More Facilities for a Growing Market

The collaboration with GHG is now taking place on both sides of the border, thanks to the establishment of a new industrial hemp project in Scio, Oregon. Once again, the companies are collaborating to create a facility that will push forward techniques in hemp cultivation while providing a steady profit.

The heart of this operation is a 109-acre property in the Willamette Valley, a fertile area with a recent history of successful cannabis cultivation. The site has soil rich in organic matter and established irrigation infrastructure, meaning that it is well set to support a new agricultural project. The use of high yield hemp clones will help to maximise the output of the project.

Multiple approaches to cultivation will feed into the Scio facility’s output. Traditional outdoor cultivation will take place alongside five greenhouses, which will provide over 19,000 square feet of indoor growing space. This will ensure a year-round supply of hemp.

As in New Brunswick, data collection and analysis will play an important part at the farm in Oregon. By checking on the performance of the growing techniques and the quality of the plants, the companies aim to support strains which are rich in cannabidiol (CBD), an active ingredient important in derivative products designed to support well-being.

A Growing Global Industry

The new project comes at a perfect time for MCOA. Demand for CBD is high thanks to the growing global market for cannabinoid-based products. A facility that can provide the companies with a steady supply of high-quality CBD plants will make it easier to take a substantial place in this expanding sector.

One of MCOA’s most important subsidiaries is hempSMART. This company develops and markets hemp-based wellness products that make use of cannabinoids, the active compounds that can be extracted from the hemp plant. HempSMART also aims to educate consumers on the possibilities offered by hemp, possibilities that the U.S. senate has started to acknowledge through its establishment of the new seed bank. Educators and health professionals are among the experts hempSMART has brought into its team, to make it more than just a source of wellness products.

With investments in everything from payment systems to cultivation facility rentals, Marijuana Company of America has built a broad base of innovative cannabis-related products.

More Companies Signal Strong Future

It’s a sign of the health of cannabis industry that MCOA faces competition from a number of companies, both in hemp production and in the wider cannabis market.

Cronos Group, Inc. (TSX: CRON) (NASDAQ: CRON) is one of the highest profile companies in this sector. In February 2018, it became the first pure play cannabis company traded on the Nasdaq, a sign of the interest in cannabis by mainstream investors. A recent upgrade of its shares on the Toronto Stock Exchange reflects the way that cannabis companies are solidifying their position, proving that they are here to stay. A recently announced cross-border venture with MedMen means that Cronos will benefit from scientific advances being made by the Los Angeles company, which prides itself on its research work.

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) is becoming a leader in the cannabis retail field. Within Canada, it has established itself as a trusted company, being granted one of the first retail licenses in the province of Manitoba. This gives Canopy a strong starting point to sell to customers when recreational cannabis becomes legal in Canada later this year. Further afield, it recently acquired a cannabis company in the Kingdom of Lesotho. This will provide access to an African market largely ignored by western cannabis companies. It will also let the company grow medical cannabis in ideal conditions, with 300 days of sunshine a year, excellent humidity, and great growing conditions for greenhouse grown cannabis.

One of the largest cannabis companies, Aurora Cannabis Inc. (TSX: ACB) (OTCQX: ACBFF) has recently expanded its activities to cover both the recreational and medical sectors. The company leans heavily on research to improve its sales, with the announcement in late May of a new range of high-THC content cannabis products. It has also made moves to expand its market reach over recent months, with the largest corporate acquisition in the history of the cannabis industry in the form of the purchase of CanniMed, as well as a supplier agreement with Shoppers Drug Mart.

OrganiGram Holdings Inc. (TSX-V: OGI) (OTCQB: OGRMF) is looking beyond the American market. The company has recently been granted a license to export cannabis to Australia. This will introduce OrganiGram’s product to a new territory through a deal with a licensed Australian medical cannabis dealer. Organigram’s success will be further bolstered by a recent deal with TGS Colorado, a company with expertise in extract technology. This will provide Organigram with access to best-in-class technologies, products, and designs with which to make the most of its expanding cultivation base.

Increasing government backing, combined with advances in cultivation and technology, ensures that there’s a healthy future for all varieties of cannabis, from medical marijuana to industrial hemp.

For more information about Marijuana Company of America, please visit Marijuana Company of America (MCOA).

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