Hemp Market Drives Hydroponics Growth

CannabisNewsWire Editorial Coverage: A surge in hemp production means big business for hydroponic suppliers.

Hemp production set to massively increase in the United States this year.
Increased production driving high demand for hydroponic supplies.
Hydroponics companies are responding with expansion and acquisitions.

Sugarmade Inc. (OTC: SGMD) (SGMD Profile) has strategically acquired several companies to meet demand and expand its foothold. Canadian-based Tilray Inc. (NASDAQ: TLRY) has expanded production in both Canada and Europe while Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is developing projects in the United States, and Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has received massive outside investment to fuel its growth. Companies such as Aphria (NYSE: APHA) (TSX: APHA) are enlarging their indoor grow operations as they too rush to meet demand.

To view an infographic of this editorial, click here.

Hemp Bonanza

The legalization of hemp in the United States has ignited further growth in a massive new industry. Already under development through state laws and federally approved test sites, this historically valuable cash crop is now legal for cultivation across the country. With demand for CBD soaring, growers are scrambling to capitalize on an unprecedented opportunity.

However, sudden growth means a sudden need for supplies, skills and experience, none of which can be conjured from thin air. Obtaining these creates challenges for growers and opportunities for suppliers, and the match between those two varies across the map. As the hemp rush unfolds, some are doing better than others at rising to the challenges of hemp farming.

Challenges for the Hemp Industry

December 2018 saw the passing of the 2018 U.S. Farm Bill and with it the legalization of hemp cultivation in the United States. While the crop had previously been cultivated on test sites and through state-level laws, this was the first time in a century that this once-important cash crop was officially allowed by the U.S. government again. The move has created a whole new playing field, thrusting Sugarmade Inc. (OTC: SGMD) into the spotlight.

Sugarmade is a hydroponics supply company catering to the hemp market. As such, it has seen an extraordinary few years of growth. Even before the Farm Bill, the hemp industry had been growing. CBD, an active ingredient extracted from hemp, has become an incredibly popular product in the last few years. The plant is used in foods, oils, vaping fluid, drinks and health treatments. Research indicating its potential to support health and well-being has fueled consumer interest. The existing producers of hemp have seen profits soar, and now that the floodgates have opened, other businesses are rushing to get in on the act.

This creates massive challenges both for the industry and for individual businesses. Though hemp is now legal, it is tightly controlled, and producers must be able to grow hemp in accordance with strict rules, as well as to validate that both their facilities and their products meet these standards. That means employing skilled staff and using high-quality equipment.

The challenge of obtaining that equipment is made all the greater by the sudden and widespread nature of the expansion. Scores of companies all looking for equipment at once puts pressure on suppliers. If they have the supplies and the reach to widely distribute those supplies, then there’s a huge opportunity for growth. If they don’t, they’ll struggle to meet customer demand.

The struggle to meet that demand is likely to create a situation of haves and have-nots, in which some growers are able to expand while others fail to fulfil their objectives. Who succeeds and who fails will be decided to a large extent by who can find a reliable hydroponic supplier.

Equipping Growers

Despite the romantic image of farmers turning over a patch of land to a new crop, most hemp farming occurs indoors using hydroponic systems. That’s why companies such as Sugarmade are such a critical link in the hemp-farming process.

The hydroponic equipment needed to grow consistent high-grade hemp is varied and complex. A broad range of lighting equipment is needed to control photosynthesis. Specialized nutrient mixes provide plants the food they need to grow. And measurement solutions and environmental controls are necessary for staff to measure, monitor and control the myriad of factors that determine the quality, strength and health of the plants.

Given the circumstances, companies with expertise in hydroponics are imperative to provide supplies, but due to the previously restricted market, they’ve been relatively small. All that is changing in the rush to meet the needs of the burgeoning hemp market. Larger companies are desperately needed, and Sugarmade appears set to become one of those companies.

Sugarmade’s strategic intent is growth on two fronts, organically by brand expansion and through acquisitions. The company has a few deals in the pipeline that are pending audit and funding.

“Sugarmade plans to integrate these businesses fully as soon as is possible, making us one of the larger suppliers to this growing marketplace,” said Jimmy Chan, CEO of Sugarmade. “Additionally, we are in the process of vetting other possible acquisitions to further enhance the portfolio of hydroponic and cultivation supply products. We are certainly excited about our prospects for the remaining part of this year and into next year.”

The Local Picture

Even with such bold moves, it’s not possible for a company to expand everywhere at once, and hydroponic suppliers must choose where to focus. A focus on states with a strong presence in hemp is a good way to ensure a large market for supplies.

One area that’s rich in potential is Kentucky. A state with a strong history of tobacco growing, Kentucky is facing the reality that people are moving away from smoking. Hemp offers an alternative cash crop that some of the state’s farmers have been quick to leap upon. Approximately 16,000 acres of hemp were planted in Kentucky last year, and this is expected to nearly triple to 42,000 acres in 2019. The state has already received five times more applications to grow hemp this year than last. Sugarmade is catering to this boom through a supply agreement with Kentucky-based Hempistry Inc., which will help Hempistry achieve the nearly tenfold increase in hemp growing it has planned this year.

Sugarmade is also developing strong distribution channels in California, one of the first states to change its laws and embrace the rise of hemp. California’s large population and positive attitude towards CBD and hemp makes it another prime target for expansion.

By becoming an integral link in hemp production in these high-production states, Sugarmade grows organically by brand expansion, locks in revenues and is positioned to capture an outsized market share across the United States.

Competition Heats Up

The rapid rise of hemp and hemp-related markets has meant that a growing number of companies are jockeying for position in the hemp and CBD sectors, and some of them are seeing serious expansion.

Tilray Inc. (NASDAQ: TLRY), a Canadian company, has been expanding through acquisitions. The company recently acquired Manitoba Harvest, the largest hemp foods company in the world, to give it a position in a strategically important portion of the hemp market. This comes alongside other initiatives such as a move into Europe. These strategic moves have won praise for Tilray’s leadership team.

Another Canadian company and one of the largest in the sector, Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is making strong moves to expand south in the wake of the Farm Bill. It has established a hemp-production facility in New York state and acquired hemp enterprise AgriNextUSA. This allows the company to make the most of America’s swing towards hemp and work to become a leading player as the market heats up across North America. Canopy Growth already has an extensive range of licenses and distribution deals north of the border, giving it a strong base from which to build its U.S. business.

The excitement around hemp has drawn interest from companies outside the sector. Altria, the tobacco giant behind the Marlboro brand, is looking to expand its opportunities as tobacco faces ongoing challenges. Like many Kentucky farmers, Altria is looking to hemp and related products for potential solutions. It recently closed a deal to invest C$2.4 billion in Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), providing Altria with a way into the hemp sector. The funds will give Cronos resources to expand during this critical phase of market growth in the States.

In testament to value, Aphria (NYSE: APHA) (TSX: APHA) is fending off a hostile takeover by Green Growth Brands. In addition, Aphria recently received a license amendment to expand its growing space, which makes it an appealing prospect for other companies looking to increase their capacity.

The hemp bonanza has just begun. Like every new market, shakeouts and consolidations are bound to happen. The strong will survive while the weak will fail. The same holds true for the hydroponic suppliers. Given the circumstances, it’s inconceivable that many small suppliers will survive. The victors will be those who can get to markets early and scale through agreements and acquisitions. Sugarmade is making all the right moves to not just survive but also thrive.

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

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CBD Surges into Mainstream with New Products, Celebrity Endorsements and Emerging Consensus about Benefits

CannabisNewsWire Editorial Coverage: Analysts at Brightfield Group see CBD (cannabidiol) gobbling up a sizeable chunk of a projected $100 billion nutraceuticals 2022 U.S. market.

Growing CBD market could eclipse broader cannabis market
Consensus about health benefits backed by clinical work, personal endorsements lead to heightened interest
CBD found in vast array of new products

As CBD moves into the mainstream, opportunities are likely to grow exponentially for a variety of companies, including plant-based health and wellness product developer Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile). Canadian company Tilray Inc. (NASDAQ: TLRY) is riding the wave by acquiring Manitoba Harvest, the world’s largest hemp foods company. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) recently announced it has closed a billion-dollar equity investment from an outside company. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) just received a cultivation license from Health Canada for its facility in New Brunswick. Aphria (NYSE: APHA) (TSX: APHA) also received additional licensing approval from Health Canada, permitting the company to commence production in an additional 800,000 square feet of facilities.

To view an infographic of this editorial, click here.

An Established Wellness Ingredient Goes Mainstream

The recent passage of the Hemp Farming Act in the 2018 U.S. farm bill made hemp an ordinary agricultural commodity, swinging open the door for hemp-derived CBD. The industry is seeing everyone from A-list celebs at the Oscars to noted medical professionals such as American neurosurgeon Dr. Sanjay Gupta extolling the therapeutic benefits of CBD.

Already incorporated into to a wide variety of functional foods and beverages, CBD has also started to show up in coffee and cocktails, with specialty CBD drinks joining the menus at bars and coffee shops across America. Many users swear by the efficacy of CBD to combat ailments such as anxiety, sleeplessness or physical pain.

With mounting therapeutic credence and a raft of celebrity endorsements, its little wonder that CBD has exploded into the mainstream. Product developers have been scrambling to incorporate cannabidiol into every kind of consumer product imaginable, from health and beauty items for the skin to tasty treats for the family pet. The accumulating evidence for CBD’s health benefits also owes a great deal to watershed achievements such as Epidiolex, a CBD-derived anti-seizure medication that has been through numerous clinical trials, becoming the first FDA approved cannabis-based drug utilized to treat severe forms of childhood epilepsy.

There’s an emerging consensus among consumers that CBD has broad ranging medicinal benefits with the ability to treat something as serious as epilepsy yet also safe enough to be used for daily aches and pains or address a myriad of anxieties and ailments. This awareness, combined with the rapid proliferation of CBD consumer products ranging from vape pens to functional foods, has led to a veritable grassroots market revolution.

Any lingering stigma or confusion between CBD and THC is rapidly eroding, particularly with the likes of homemaking legend Martha Stewart now providing her knowledge of consumer products to CBD developers. And household names such as Kim Kardashian, Olivia Wilde and Jennifer Aniston are also going on record as having enjoyed the health benefits associated with their personal consumption of CBD products.

Growing Consensus about Healing Power of Plants

Grabbing A-list celebrity attention, the Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) CBD+ Healing Stick was in each of the gift bags of the stars during Oscar weekend 2019. Packing 500mg of highly concentrated, full-spectrum CBD, Wildflower’s cooling and soothing stick is easy to apply for targeted pain relief and skin care, providing relief through a unique CBD blend that includes therapeutic ingredients such as arnica, wintergreen and other essential oils.

An established, respected brand, Wildflower Wellness’s overriding mission is to connect people to the healing power of plants via the company’s increasingly sophisticated line of CBD vaporizers, capsules, tinctures, soaps and topicals – formulating its extracts with essential amino acids and beneficial terpenes, the organic compounds that provide flavor and scent. A testament to the popularity of Wildflowers’ proprietary formulations can be found in a NY Magazine article “The Best CBD and Hemp Products for the Tasteful Non-Stoner” touting the company’s CBD Immunity Vaporizer, stating that, “Wildflower also made the perfect CBD starter kit…”

The company’s products are made in the United States at Wildflower’s GMP facilities, third-party lab tested and backed by a 100 percent satisfaction guarantee. Wildflower’s well-formulated, convenient and consumer conscious products such as its disposable ACHES CBD+ vaporizer are increasingly enjoying widespread acceptance, in part due to education of the consumers by cannabis and wellness influencers.

Flexing its branding and marketing muscle, Wildflower Wellness partnered with Bridges General to take that company’s reimagined convenience store concept to the next level. The partnership fuses together the immense popularity of the Bridges General design-centric retail space that delivers convenience for the on-the-go urban professional with an engaging opportunity to experience and learn about the benefits of CBD. The partnership is already serving some of the most powerful and influential people in the country at its Lower Manhattan store, as well its Madison Avenue Bridges General store. Further expanding reach, Wildflower has also engaged Retail Worx to establish shop-in-shop retail availability at more than 20 locations in the heart of New York City’s booming cannabis market.

Industry Seeing Retail Renaissance in Consumer Products

Wildflower continues to expand its impressive retail reach, with the Wildflower Wellness brand already enjoying distribution in key states, such as Washington at more than 200 retailers. The company’s California-based King Extracts brand is focused on cannabis technology and delivery systems. The company’s King Extracts product, the King Recharge, is a discreet but powerful little pocket vaporizer that comes in its own sleek charging and storage case, which has room for two 500mg cartridges and a backup battery.

King Recharge offers fractionally distilled CO2 extractions in exceptionally clean and sophisticated blends that utilize proprietary terpenes in order to deliver a full, robust flavor profile. Sativa, Indica and Hybrid, as well as two limited-edition Sativa flavors (watermelon and bubble gum), are currently available. Additionally, Wildflower’s growing national distribution arm includes over 80 other wellness and healthcare practitioners, bringing the company’s total to some 300-plus stores nationwide.

The company has even branched out into physical retail itself, harnessing the power of increasing brand recognition, a firm footing in the California market and tightly knit relationships with local hospital oncology departments and community programs. Wildflower has launched its own dispensary in Los Angeles and provides on-demand, legal and licensed cannabis delivery services to adults in the L.A. area. The second quarter of 2019 saw the 10th consecutive quarter of increased revenue for Wildflower, with $1.4 million in sales underscoring a burgeoning direct-to-consumer online channel that witnessed 300 percent growth last year alone.

Many analysts are saying that the CBD rush is just getting started. One recent estimate indicates that the CBD market alone could eclipse the entire remainder of the cannabis market combined. Wildflower is making all the right moves to capture an outsized share of the CBD bonanza.

A Rising Tide Lifts All Boats

Other companies are recognizing the potential profit CBD may provide. Canadian company Tilray Inc. (NASDAQ: TLRY) just finalized its acquisition of Manitoba Harvest, a move Tilray president and CEO called a milestone for the cannabis industry. “It builds on the strategic partnerships we have formed with consumer brand industry leaders and demonstrates our track record of disrupting the global pharmaceutical, alcohol, CPG, and functional food and beverage categories,” said Brendan Kennedy. The deal gives Tilray access to a broad portfolio of food products that are distributed in 16,000 stores across the United States and Canada, as well as the opportunity to expand beyond the food category, possibly including extracts.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) just closed a C$2.4 billion investment from Altria, the American company behind brands such as Marlboro and Benson & Hedges. The move is a sign of the huge interest the CBD market is generating from companies both in and outside the industry. Cronos operates two wholly owned, Canadian-licensed producers and has multiple international production and distribution platforms and partnerships across five continents. Cronos intends to continue to expand its global footprint as it focuses on building an international iconic brand portfolio and developing disruptive intellectual property. The company is committed to building industry-leading companies that transform the perception of cannabis and responsibly elevate the consumer experience.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) predicts the new facility in Fredericton, New Brunswick, will produce more than 5,000kg of cannabis annually, with first harvests expected to become available to the market within six months. In addition, the company expects to create more than 130 jobs at the plant. “New Brunswick has emerged as a leader in the legal cannabis sector, and the province is an excellent place to do business,” said co-CEO and Canopy Growth chairman Bruce Linton. “We will leverage our existing operational expertise to ensure we support the needs of our customers while making a meaningful contribution to the local economy primarily through new job creation.”

As part of its Part IV and Part V expansions, Aphria (NYSE: APHA) (TSX: APHA) is increasing production at its Aphria One location. The expansions brig industry-leading automation to the company. While critical phases such as initial cuttings, trimming and pruning mature plants will be performed by hand, the in-house designed technology will automate key steps, including transplanting cuttings, transplanting plans through harvesting, de-budding and rough trimming, drying and curing, and waste disposal.

With the 2018 Farm Bill thrusting hemp-derived CBD into the limelight, the broader industry likely stands to experience a rising tide that will lift all boats.

For more information on Wildflower Brands, visit Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF)

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Hydroponic Supplies Play Key Role in Hemp Market Growth

CannabisNewsWire Editorial Coverage: Surging hemp market growth has created huge demand for hydroponic supplies.

Demand for CBD is driving a rise in hemp cultivation, much of which is done indoors using hydroponic equipment.
This hydroponic approach allows greater quality control over the cultivation process and the hemp.
Acquisitions and expansion are needed for hydroponic companies to keep up with demand.

Hydroponic supplier Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) has been making swift moves to deal with this demand, acquiring other supply companies and outlets. Canadian company Tilray Inc. (NASDAQ: TLRY) has acquired the world’s largest hemp foods company, giving it a strong position in a customer-facing part of the sector. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has set up a new hemp-growing facility in New York state, using hydroponics to help it meet growing demand. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has received a large boost in investment thanks to interest in the surrounding sector, providing fuel for future growth. Aphria (NYSE: APHA) (TSX: APHA) is looking beyond North America, with the acquisition of a European distributor.

To view an infographic of this editorial, click here.

A Better Way to Grow Hemp

With the passing of the Farm Bill in December, the production of hemp for CBD, which was already on the rise, looks set to soar in the United States and beyond. Demand for CBD for health and wellness products keeps rising as more research focuses on its potential for relaxation, pain management and other benefits for living a healthy life. Farmers are grabbing the opportunity to invest in a new cash crop, one which has provided remarkable returns for some.

But all this attention on hemp and CBD brings challenges with it. This is a tightly regulated sector with demanding customers. High-quality crops are essential for success, and managing both quality and consistency can prove incredibly challenging. To do this, many growers are turning to hydroponics.

Hydroponics and Hemp

Hydroponic equipment offers an alternative approach from growing plants in soil. Instead, the hemp harvest is grown in solutions rich with sustaining minerals, with roots either suspended directly in the liquid or supported by a medium like gravel that the liquid can move through. Provided by specialist companies such as Sugarmade Inc. (OTCQB: SGMD), hydroponic systems give growers more control over how their plants grow.

This approach can help hemp growers in a number of ways. The most obvious benefits revolve around the fact that the plants are grown in clean, indoor environments. While this results in higher costs compared with growing in fields, it also results in a number of benefits. Plants are safe from changes in the weather that can be harmful to many crops, such as sudden frosts or unseasonal heat. They’re also protected from contaminants, both living and inanimate, and from infections that could kill the plants to chemicals carried in the atmosphere that could taint the eventual crop.

While any indoor growing situation can help with this, hydroponics brings greater advantages. By feeding plants with carefully balanced nutrient baths instead of soil and fertilizer, farmers gain more control over the crops they produce. This means higher CBD content, making their plants more valuable. Hydroponics also means that the hemp often more easily passes the stringent quality tests that are applied to plants in this sector, tests that are likely to become even firmer now that the federal government is officially allowing and regulating hemp production in the United States.

As a result, companies such as Sugarmade are on the brink of a potential new gold rush. With some companies moving into the CBD market and others rushing to expand their existing hemp production, demand for hydroponic supplies is on the rise.

Acquiring Influence

This has created a great opportunity for hydroponic suppliers, and some are moving to further strengthen their position. Those with an eye to the future, such as Sugarmade, were making preparations long before the Farm Bill passed into law. Now they’re reaping the benefits of that forward thinking.

As with hemp production, consistency is key to the supply of hydroponic equipment. Customers are reliant on these companies not only for setting up their growing spaces but for expanding them, maintaining and replacing equipment, and ensuring a steady supply of the minerals needed to feed the plants. A company that can’t provide consistent supplies will struggle to maintain relationships with its customers, whose crops rely on that supply line. With demand growing, it’s harder to ensure supplies, and for many, the answer is expansion.

This is the approach that Sugarmade is taking. The company has made an agreement to acquire Sky Unlimited LLC, a California-based distributor of cultivation supplies. This will allow Sugarmade to meet more demand than it has previously faced, and so cope with the increased needs of customers.

“This year, Sky Unlimited and its associated operations are expected to produce in excess of $40 million in revenues with profitability and positive cash flow,” Jimmy Chan, CEO of Sugarmade,said in late 2018. “This new revenue stream combined with our recently upwardly guided revenue forecast of $30 million for next year will make Sugarmade one of the largest publicly traded suppliers to the booming cannabis cultivation marketplace, with a combined revenue forecast for next year in excess of $70 million.”

There’s also an opportunity for expansion, given the huge market growth. Sugarmade has leapt upon this chance through its possible acquisition of a retail location from Washington State-based company Hydro4Less and options to purchase two more. The first location alone is expected to provide $5 million in revenue, as Sugarmade increases its foothold in the hydroponic market.

Hydroponics Beyond North America

While the current focus for hemp and CBD, as well as the associated part of the hydroponics market, is currently on the North America, there is also important potential for growth further afield. European countries are showing an increasing interest in CBD products, with customers keen to buy in, and some governments re-examining the legislation around these crops. For fast-moving companies, there’s a chance to get in on the ground floor of the next wave of hemp hydroponics.

Sugarmade is ahead of the game in this area. Last summer, the company made its first sales into Europe, establishing a place in the continent’s supply chain. European customers have been taking an increasing interest in the quality products and attractive prices provided by American hydroponic companies, and Sugarmade is making the most of it.

“The lack of available products within the European markets provides Sugarmade additional revenue growth opportunities,” Chan said. “We view this as a potential growth market for Sugarmade especially considering there are more than 740 million people in Europe compared to only about 360 million in the U.S. We believe even a few points of market share of this huge market will have a very positive effect on our growth rate.”

Companies Race for Hemp Dominance

Like Sugarmade, Canadian company Tilray Inc. (NASDAQ: TLRY) has been using acquisitions to strengthen its place in the hemp and adjacent markets. One of the most significant is the recent acquisition of Manitoba Harvest, the world’s largest hemp foods company. Food and drink are increasingly important parts of the hemp market, as customers look for hemp-based whole foods and tasty ways to consume CBD. With a range of products including oils, granola, and protein powder that are sold in more than 16,000 major retailers, Manitoba Harvest gives Tilray a powerful place in this sector.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is one of the largest companies working in hemp, thanks to its steady growth paired with billions of dollars in outside investment. The company is in the process of expanding from Canada into the United States, with the establishment of a hemp production facility in New York state. Growth into the States will allow Canopy Growth to benefit from this year’s CBD surge. The company is also working to raise the public profile and usefulness of CBD through research with the NHL on using CBD to treat concussions.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), one of the big companies making use of hydroponic equipment, has benefited hugely from outside interest in the market. Less than a month ago, it closed a C$2.4 billion investment from Altria, the American company behind brands such as Marlboro and Benson & Hedges. It’s a sign of the big money currently swirling around this part of the economy, a large part of which is invested in crops and the equipment to grow them.

Some of this big money was recently directed into an attempted hostile takeover of Aphria (NYSE: APHA) (TSX: APHA) by Green Growth Brands. It was a move that showed the high value placed on companies such as Aphria, even as the company’s board shot down the bid. Like Sugarmade, Aphria has been making moves beyond North America and into Europe, with the acquisition of a German distributor.

The hemp and CBD market keeps growing, more money keeps flooding in, and a large part of it will inevitably be funneled into hydroponics to create plants that meet the standards demanded by customers and regulators. For both CBD companies and hydroponic suppliers, that’s great news.

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

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Staggering Growth Predicted for CBD Industry as Impact of Farm Bill Seen

CannabisNewsWire Editorial Coverage: Following the passing of the 2018 Farm Bill, CBD sales have continued their massive growth in the United States and beyond.

Cannabidiol (CBD), a chemical found in cannabis, has seen a huge growth in sales over the past few years.
CBD can be derived from hemp, and the passing of a new farm bill in the States makes this form of cultivation legal at a federal level.
This forms part of wider growth in the cannabis market, as companies expand their operations in North America and even beyond.

Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile) is among the companies benefiting from this market, with an increase of more than 300 percent in online sales for its CBD products last year. Tilray Inc. (NASDAQ: TLRY) is expanding with its acquisition of hemp foods company Manitoba Harvest. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) announced revenue for its fiscal third quarter rose more than 280 percent compared to a year ago. In December, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) announced that tobacco company Altria would be taking a $1.8 billion stake in the company. And Aphria (NYSE: APHA) (TSX: APHA) has just completed expansion projects that allows it to substantially increase its output.

To view an infographic of this editorial, click here.

CBD Drives Growth for Hemp

Hemp, a plant that has long been out of the public eye, is returning to the spotlight in a big way. A nonintoxicating form of cannabis, hemp was primarily used for centuries as a natural source of fibers, which were used in cloth, rope and even building materials. Many ships in the great age of sailing relied on hemp for their riggings.

But in the sweeping anti-drug crusades of the 20th century, hemp became caught up in attacks on cannabis. Campaigners who were determined to save consumers from their own pleasures had cannabis outlawed at a time when there was little effective way of distinguishing between hemp and other forms of cannabis. No longer needed for cloth and rigging, hemp was made illegal.

Now all that has changed — nowhere more dramatically than in the United States of America.

The Farm Bill

Hemp is making a comeback thanks to the growing popularity of cannabidiol (CBD), an active ingredient found in many forms of cannabis. It’s an ingredient that companies such as Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN), a creator of plant-based health and wellness products, have been making extensive use of in recent years. Combined with other naturally occurring plant compounds, full-spectrum CBD is used in a range of Wildflower products, including capsules, topicals, soaps, tinctures and vaporizers.

Until recently, the production of CBD in the United States faced serious restrictions and uncertainties. Many states had legalized the production of cannabis in some form, either for medical or for recreational use. In addition, there were licensed trials of the cultivation of hemp, which can be rich in CBD. But all of these plants were illegal at a federal level, meaning that even with state-level approval, cultivators faced financial limitations and the threat of government action.

All that changed in December with the passage of the 2018 Farm Bill. One of a regular series of bills governing the U.S. agricultural sector, this bill removes hemp from the list of controlled substances, making it unambiguously legal for farmers to grow hemp. This changes the landscape for CBD products in the States. Companies such as Wildflower, which has already got its products into many outlets in the health and wellness sector, will be able to expand their reach even further.

States have the right to set their own rules around restricted substances, and some states have taken an unsympathetic attitude to CBD. The Farm Bill doesn’t force states to change this attitude, but there are already signs that public opinion on all levels are changing. The regulations in many states assume adherence to the federal guidelines, and some states, such as Alabama, have already softened their stance since the Farm Bill became law.

Under the Farm Bill, hemp production will be tightly regulated. Most states already have existing regulations in place, and the U.S. Department of Agriculture will be developing its own regulations as well. But for an established company such as Wildflower, which already works in California, Washington and New York, this shouldn’t be a problem.

Cannabis companies are accustomed to working in a tightly controlled environment and meeting the legal standards set by state legislators, as well as the product standards required by retail outlets. In that context, working within new federal regulations shouldn’t present a significant challenge, while the existence of consistent national standards will create opportunities for growth.

CBD Demand Grows

The Farm Bill has been driven in large part by the growing demand for CBD. An obscure and seldom discussed chemical a decade ago, CBD has emerged as an important consumer product. The gradual legalization of cannabis and research into its medical effects drew attention to the fact that those benefits were not all related to THC, the psychoactive chemical that gets cannabis users high. Identified as a chemical with great potential for health and wellness, CBD has started to be marketed in its own right and is used in products such as the Wildflower Wellness line.

Public interest in CBD has grown seemingly from nowhere. Tapping into interest in both cannabis and natural remedies, and offering treatments that may succeed where others have failed, CBD sales have soared. Hemp-derived CBD alone was a $390 million market in 2018 and is expected to reach $1.3 billion by 2022. And that doesn’t even include all the CBD products derived from other forms of cannabis.

The results for producers have been staggering. Wildflower saw its online sales grow by more than 300 percent in just nine months in 2018. In response, the company opened its first New York retail store, a sure sign of a product’s popularity in an age when so many companies are shedding their brick-and-mortar presence.

Looked at globally, CBD is in even better health. The Brightfield Group has estimated that CBD’s value will reach $5.7 billion this year and $22 billion by 2022. While research on the topic is still in its infancy, there is growing evidence that CBD could be used to treat a number of ailments, including certain extreme forms of childhood epilepsy. Even the United Kingdom, a country whose government remains staunchly opposed to the legalization of cannabis, has allowed the use of a CBD drug for this purpose.

Companies producing and selling CBD products are springing up across North America, Europe and beyond. Demand is growing, especially among millennials. That’s bolstering the impressive sales of companies such as Wildflower and putting pressure on politicians to further liberalize the laws around hemp.

Making the Most of a New Market

A lot of companies are now making the most of the growing popularity of cannabis, CBD and hemp. With its acquisition of Manitoba Forest, Tilray, Inc. (NASDAQ: TLRY) is tapping into an extensive U.S. distribution network and an upcoming line of CBD products. Manitoba Harvest sells hemp-based granola, protein powder, milk and other food products at more than 13,000 points of sale across the United States.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) impressive increase in sales was boosted by the company’s first sales of legal recreational marijuana in Canada, which accounted for more than 70 percent of gross revenue. Chairman and co-CEO Bruce Linton attributed the lift to the company’s decision to make early, “meaningful” investments that helped it corner a big part of the Canadian market when the law took effect. Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and softgel capsule forms.

Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), which became the first marijuana stock to uplist from the over-the-counter exchange to a major U.S. exchange, appears poised to benefit from its move with Altria. Altria now has a 45 percent stake in Cronos, with the ability to exercise warrants it also received to boost its stake up to 55 percent. Should those warrants be exercised, Cronos would receive an additional $1.05 billion. Cronos Group is a globally diversified and vertically integrated cannabis company with a presence across five continents. Cronos Group operates two wholly-owned Canadian licensed producers: Peace Naturals Project Inc., which was the first non-incumbent medical cannabis license granted by Health Canada, and Original BC Ltd., which is based in the Okanagan Valley, British Columbia.

Aphria (NYSE: APHA) (TSX: APHA) recently announced that Health Canada has granted the company its license amendment, permitting Aphria to commence production in an additional 800,000 square feet of facilities at its Aphria One location, as part of the company’s completed Part IV and Part V expansions. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the standard for the low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible.

Savvy companies, such as Wildflower Brands Inc., are making the most of legal moves in the United States and Canada that have created momentum and exciting opportunities for growth.

For more information on Wildflower Brands, visit Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF)

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Hemp Boom Leads to Cultivation Supply Shortages

CannabisNewsWire Editorial Coverage: The growth of the hemp sector is having a beneficial effect for both hemp companies and hydroponic suppliers.

The growth of hemp more than doubled in the United States last year
More companies are moving to produce hemp, causing a surge in demand for cultivation and hydroponic supplies
Shortages are particularly acute relative to the hemp micropropagation and hemp cloning supplies as the spring planting season looms

Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) via its pending acquisitions is poised to accelerate its growth rate as a result of this hemp cultivation boom, along with other leading companies. Tilray Inc. (NASDAQ: TLRY) has been expanding through the acquisition of other companies and a move into Europe, with a successful harvest in Portugal. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) is using outside investment to expand from Canada to New York and to develop CBD-infused drinks. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has also seen substantial outside investment thanks to growing faith in hemp. Aphria Inc. (NYSE: APHA) (TSX: APHA) has even faced a hostile takeover attempt as some companies look for ways to force their way into greater influence over a growing sector.

To view an infographic of this editorial, click here.

Hemp — The New Cash Crop

This year is set to be a record breaker for the hemp industry. The ongoing transformation of the plant’s legal status in North America is opening up possibilities for farmers, processors and retail outlets. The whole playing field is changing as the nationally legalized Canadian industry develops and the United States contemplates an agricultural future with now-legal hemp cultivation. This momentum appears to be drawing in big investors as well as industry pioneers that are intent on setting up new businesses.

The Farm Bill, which was signed into law in the United States in December, includes clauses making the farming of hemp legal on a nationwide level. Hemp doesn’t contain a significant quantity of the psychoactive chemical tetrahydrocannabinol (THC), which is present in other variations of the plant. Instead, hemp is valued for its nonpsychoactive chemical cannabidiol (CBD), which is used in a growing number of health, wellness and relaxation products. Hemp also is a source for fibers that can be used for anything from cloth to building materials. The bill therefore has made it far easier for farmers, many of whom are struggling to get by on current crop yields, to look for profits through the hemp sector.

Even before the Farm Bill’s passage, the expansion of hemp cultivation in 2018 had been staggering, growing from 25,713 to 78,176 acres spread across 23 states. Those states issued 3,546 hemp licenses in 2018, more than double the 1,456 issued in 2017. Since the law passed, states with existing hemp infrastructure have been overwhelmed with applications for licenses, and it’s clear that the growth should stay strong.

With Growth, Shortages Loom

Like any dramatic development in the economy, this emerging sector brings with it challenges and difficulties. One of these is providing the cultivation supplies that new and expanding hemp growers will need. Shortages of critical cultivation supplies, particularly relating to plant tissue micropropagation and cloning are being reported potentially threatening the plans of many farmers to get their hemp crops planted this spring. But one person’s challenge is another person’s opportunity, and in this case, the opportunity will go to companies that have prepared for the growing need for cultivation supplies.

This young hemp cultivation supplies industry is not dominated by established corporate giants, which leaves plenty of space for relative newcomers such as Sugarmade Inc. (OTCQB: SGMD), via its pending acquisitions.

Generating New Revenue Streams

Recently, Sugarmade announced its intention to acquire Sky Unlimited LLC, which is a major supplier to large commercial agricultural cultivation operations. The acquisition is anticipated to generate new revenue streams from not only large hemp growers but also from more traditional hydroponic oriented cultivators.

The acquisition of Sky Unlimited and its www.AthenaUnited.com marketing website has been almost perfectly timed to make the most of the boom hemp cultivation trend. The brands fit well with Sugarmade’s existing business, allowing the company to smoothly expand its hydroponic sales operations and better meet growing customer needs.

Profiting from Supply and Demand

Acquisitions have also been the order of the day for many hemp cultivators, allowing them to expand their operations into newly legalized spaces.

Canadian company Tilray Inc. (NASDAQ: TLRY) has been on an expansion spree, setting up Tilray Latin America SpA to reach Latin American markets, acquiring Canadian rival Natura Natural Holdings Inc., and recently adding the world’s largest hemp foods company, Manitoba Harvest, to its roster. While the Americas currently offer the largest markets for the plant, Tilray also has an eye on future markets. The company is rapidly expanding its operations in Europe.

The growth of the hemp sector has drawn interest from other industries — most notably in the form of a $4 billion investment in Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) by Constellation Brands. This sees the U.S. beverage manufacturer looking for fresh markets to profit from as the two companies collaborate on developing CBD-infused drinks. One of Canada’s largest hemp cultivators, Canopy Growth has used this influx of cash to support its own expansion plans. It is spreading across the border to set up a hemp production facility in New York State. It is also bolstering hemp’s status as a health drug through work with the National Hockey League on the potential use of CBD in treating concussions.

Another of the big Canadian players, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has also drawn interest and investment from south of the border. The company announced March 8 that it had closed a C$2.4 billion investment from Altria, the owner of such famous brands as Marlboro and Benson & Hedges. Like the Constellation Brands investment, this move shows the wider business world’s faith in the enduring power of hemp as a consumer product and the viability of the companies producing it.

The heated competition in the hemp market is reflected in the recent attempt by Green Growth Brands to achieve a hostile takeover of cannabis company Aphria (NYSE: APHA) (TSX: APHA). A company with interests in North American, Latin America and Europe, Aphria’s board has rejected the takeover and encouraged shareholders to do the same. This reflects the company’s faith in its own value and the profit potential of the coming year.

Like other companies in the cannabis sector, Sugarmade has announced a host of acquisitions over the past year, which it is currently working to close. With these, the company holds the potential to generate up to $90 million in annualized revenues, which could make Sugarmade one of the largest suppliers in this booming industries.

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

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Sector ETFs Provide Diversified Entry Point for Fast-Moving Industries

CannabisNewsWire Editorial Coverage: Individuals hoping to gain exposure to the movement of the markets have two primary options: spend a lot of time and effort researching public companies, or put faith into a fund. A solid investment strategy is key to keeping pace with inflation and reaching your financial goals, but the significant risk and volatility that can come with investing in a small group of companies is a real turn-off for most part-time investors.

Increasingly, novices and seasoned traders alike are turning to mutual funds for their stability and ease of use. According to data from the Investment Company Institute, mutual funds were the most common type of investment company owned in 2018, with 44.8 percent of U.S. households owning shares of mutual funds or similar U.S.-registered investment companies – including exchange-traded funds (ETFs), closed-end funds and unit investment trusts. As Matthew P. Fink notes in The Rise of Mutual Funds: An Insider’s View, “Today U.S. mutual funds are the largest financial industry in the world, with over 88 million shareholders and over $11 trillion in assets.”

Index vs Actively Managed Funds

Deciding on a mutual fund can be tricky. Data from Morningstar, published in 2018, indicates that the number of mutual funds and ETFs now stands at more than 10,000. You can begin to narrow this total down by exploring the differences between index funds and actively managed funds.

Index funds aim to track the performance of a specific market benchmark as closely as possible. The Vanguard 500 Index Fund is a prime example, with its holdings consisting of weighted positions in S&P 500 companies. Although investment firm Vanguard suggest that “only about 16 percent” of investments in domestic mutual funds are in index-based options, these funds have some noteworthy proponents.

In 2007, American business magnate Warren Buffett made a $1 million bet with Protégé Partners claiming that hedge funds wouldn’t outperform an S&P index fund, and he won. As reported by CNBC, Buffett’s choice investment, the Vanguard 500 Index Fund, “returned 7.1 percent compounded annually, while the basket of hedge funds his competitor chose returned an average of only 2.2 percent.”

Unlike index funds, actively managed funds rely on the skill and insight of their managers to not just match the performance of the larger markets, but beat them. History shows these funds to be considerably less consistent than their index-focused counterparts. According to Standard & Poor’s, roughly three-quarters of actively managed domestic stock funds underperformed the S&P 1500 Total Market Index in the decade ended June 30, 2015. Additionally, 40 percent of actively managed equity funds available to investors on June 30, 2005, were no longer in existence just 10 years later.

While exceptions do exist (Fidelity Blue Chip Growth has outperformed the S&P 500 by 2.8 percent over the past decade, for example), the upside and relative stability of index funds make them worthy of consideration for risk-averse investors.

Alternative Indexes

The upside of major indexes like the S&P 500 are apparent, but investing solely in the performance of the larger market can limit your exposure to faster-moving investment opportunities. Consider, for example, the cannabis industry. According to Marijuana Business Daily, legal cannabis sales in the U.S. alone were on pace to grow by nearly 50 percent in 2018 to $9.7 billion, with legal sales expected to rocket past $22 billion by 2022.

The Prime Alternative Harvest Index (“Prime”) gives fund-focused investors an opportunity to cash-in on the expanding repeal of cannabis prohibition without digging through the mountain of fly-by-night entries to the space. The Prime aims to take advantage of both event-driven news and long-term trends in the cannabis industry, as well as the industries likely to be influenced by the medicinal and recreational cannabis legalization initiatives that are taking shape in many forms around the globe. Utilizing a modified market cap weighting scheme, the index features some of the fledgling cannabis industry’s most recognizable names, including GW Pharmaceuticals (NASDAQ: GWPH), Cronos Group (NASDAQ: CRON) (TSX: CRON) and The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF), alongside a roster of established upstarts and ancillary companies defined by a set prospectus.

The Benefit of Exchange-Traded Funds

When investing in a fund based on a more fluid index like the Prime, the benefits of exchange-traded funds over more traditional mutual funds are particularly noteworthy. While traditional open-end mutual fund shares are only traded once per day, limiting your ability to capitalize on sudden market moves, ETFs are bought and sold during the day just like stocks, opening the door for short selling, futures and options.

ETFMG Alternative Harvest (ARCA: MJ) is an ETF that tracks the Prime in an effort to “measure the performance of companies within the cannabis ecosystem benefitting from global medicinal and recreational legalization initiatives.” To date, it is the first and only U.S. ETF to target the cannabis industry, providing direct exposure to the ongoing “green rush” taking place across North America and around the world.

The Alternative Harvest ETF turned its focus to the cannabis space in late 2017, shifting away from a prior basis of Latin American real estate to invest in both cannabis cultivation firms and a few outside operators that you may not expect to see in a cannabis-centric fund, such as Philip Morris International (NYSE: PM) and Scotts Miracle-Gro (NYSE: SMG).

Importantly, the ETF requires that all holdings have a minimum market cap of $200 million, giving investors a degree of insulation from the marijuana penny stocks and upstart companies that continue to flood the sector.

A Closer Look at the Alternative Harvest ETF

Since rebalancing its holdings to focus on the cannabis space, the Alternative Harvest ETF has established a strong position on the radars of investors eying the industry. In early January 2018, The Motley Fool issued a report stating that MJ was bought and sold more than the $145 billion iShares Core S&P 500 ETF, which the publication touted as a testament to “just how big [MJ] has become in marijuana stock circles.” In the year-plus since that report was issued, interest in the cannabis-focused ETF has remained strong, with current average trading volume exceeding 900,000.

Throughout the first two months of 2019, the sustained interest in MJ has been supported by its upward trajectory. Entering the year with a market price of $26.42, the fund’s YTD return clocks in north of 40 percent, with a market price of $37.43 during mid-day trading on March 5 that marked a new high for 2019.

This strong performance lines up nicely with the broader cannabis sector, which is supported by MJ’s current asset holdings. Canadian shares of The Green Organic Dutchman, for example, which currently represent 4.34 percent of MJ’s portfolio, are up more than 60 percent YTD. Similarly, U.S.-listed shares of Canopy Growth Corporation (TSX: WEED) (NYSE: CGC), which make up 7.16 percent of MJ’s current holdings, are up roughly 63 percent YTD. Canadian shares of OrganiGram Holdings Inc. (TSX.V: OGI) (OTCQX: OGRMF) make up 3.35 percent of MJ’s current holdings, and they’re up more than 60 percent YTD, as well.

The impressive YTD performance of MJ’s smaller holdings, including The Supreme Cannabis Company Inc. (TSX: FIRE) (OTCQX: SPRWF), Canopy Rivers Inc. (TSX.V: RIV) (OTC: CNPOF) and VIVO Cannabis Inc. (TSX.V: VIVO) (OTC: VVCIF), each of which makes up less than 1 percent of MJ’s current portfolio, continues to highlight the current opportunity presented by the North American cannabis industry. The Canadian shares of each of these companies are up more than 40 percent YTD.

After a turbulent 2018 for the cannabis industry, the first quarter of 2019 has shown incredible promise for established operators throughout the space. In early January, The Motley Fool forecast huge growth for a number of companies currently included on the Prime Alternative Harvest Index and held by MJ, including 407 percent sales growth for Aphria (NYSE: APHA) (TSX: APHA), 440 percent sales growth for The Supreme Cannabis Company, 891 percent sales growth for OrganiGram Holdings and 930 percent sales growth for cannabinoid drug maker GW Pharmaceuticals, whose shares currently represent 9.1 percent of MJ’s total holdings.

A Diversified Entry Point

It’s easy to be drawn to the cannabis sector for its promise of significant growth in the coming years, particularly as legalization measures continue to gain steam in the United States. However, choosing a winner in this nascent market has already proven to be both difficult and risky for investors of all skill levels. A proven way to avoid backing the wrong horse in this great green race is to diversify your investment, focusing more on the overall success of the industry than on that of any individual company or management team.

With more than 86 percent of its current holdings providing exposure to U.S. and Canadian markets and broad industry focuses spanning pharmaceuticals, tobacco and biotechnology, the Alternative Harvest ETF provides an intriguing and diversified entry point for investors seeking a foothold in the continued emergence of the legal cannabis industry.

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New Laws Set Up US Cannabis Industry for Explosive Growth

CannabisNewsWire Editorial Coverage: The 2018 U.S. Farm Bill changes the way that CBD-based products are legally classified. If the federal government permits the sale of cannabis-sourced products online, established companies in the space could reap huge rewards.

The legalization of cannabis in Canada and some U.S. States has demonstrated the latent demand for cannabis-based products.
CBD is used to make numerous products and its potential uses are growing.
Research suggests that the market for CBD products could grow to an estimated $22 billion over the next four years.

SinglePoint Inc. (OTCQB: SING) (SING Profile) is in a good position to take full advantage of the changes in how CBD products are regulated. Major producers such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), Aphria Inc. (NYSE: APHA) (TSX: APHA), Medical Marijuana Inc. (OTC: MJNA) and OrganiGram Holdings Inc. (OTCQX: OGRMF) (TSX.V: OGI) are also well-placed to expand into the CBD space, but they may have to compete with a new class of growers.

There are more than 80 kinds of psychoactive compounds found in the cannabis plant. While most people are familiar with THC, which is used recreationally, CBD has shown promise in treating everything from insomnia to serious neurological disorders. The 2018 Farm Bill leaves THC-based products under the jurisdiction of the Drug Enforcement Agency (DEA) but gives jurisdiction of CBD-based products to the individual states. Most industry experts predict that the popularity of these products will explode as they become easily available due to the new regulations.

To view an infographic of this editorial, click here.

A Waiting Market

Until now, CBD-based products were subject to federal regulations, which made them impossible to distribute nationally. They have been sold on a statewide basis in areas that allowed their use, but anyone who dealt with these products was shut out of the federal banking system because the crop — and its subsequent products — were categorized as illegal at a federal level.

With the signing of the new legislation, that appears likely to change. SinglePoint (OTCQB: SING) is an established distributor of CBD products and owns a decade-old web domain. Not only does the company have experience with marketing and distributing CBD-based products, it also has a background in payments processing.

CBD-based products are a new, largely unfamiliar area that may pose challenges for new companies entering the space. Universal standards for many CBD products have yet to be established or identified, so having a positive market image will likely be a significant benefit. Established companies with an existing client base and a positive reputation may be in a better position to leverage growth in the CBD sector. SinglePoint seems to fit this criteria well.

Wide-Open Potential

There is a big difference between cannabis grown for medicinal use and hemp that can now be used as a feedstock for CBD in the United States. Major cannabis producers have a much higher cost of production than hemp growers. With new changes that the 2018 Farm Bill creates for hemp farmers, the price of CBD may fall substantially.

Instead of being cultivated in near-laboratory conditions, industrial hemp is grown like any other commercial crop. Now that CBD can be refined out of commercially produced hemp, it will be difficult for anyone but U.S. hemp farmers to compete on price when it comes to CBD.

Additionally, the 2018 Farm Bill normalizes the CBD economy at a federal level. For the first time, hemp growers can use the banking system, insure their crops, and even sell their future hemp production via futures. Like any new market, it will take time for the infrastructure to be developed, but early movers in the space may have a significant advantage.

Big Changes for CBD

SinglePoint is in a unique position in the emerging CBD space. As both an online marketer and payments processor, the company looks to be in a strong position to help deliver CBD products to their target markets. The company has a strong strategy to grow its presence in the CBD space. Unlike many of the other publicly traded, cannabis-focused companies, SinglePoint has no connection with cannabis plants and cultivation, so the company should be able to take full advantage of the recently passed 2018 Farm Bill.

It appears that there is no shortage of potential CBD-based products. Currently, CBD is integrated into everything from lotions and edibles to beer and oil. With the legalization of CBD widely anticipated, research will almost certainly lead to additional discoveries into CBD properties and benefits, as well as the creation of new products targeting specific market segments.

The emerging CBD economy is also supported by the ability for hemp producers to raise funds publicly. Much like the Canadian cannabis producers that were able to expand quickly because of their publicly traded equities, U.S. hemp producers can now go public and leverage public interest in CBD to expand their operations.

Changing Production Profiles

The 2018 Farm Bill is a huge positive for U.S.-based hemp producers and CBD consumers.

One of the largest publicly traded cannabis producers available to U.S. investors, Cronos Group (NASDAQ: CRON) (TSX: CRON) owns two fully licensed cannabis producers in Canada and has other interests spread around the world. The company has maintained a multibillion-dollar valuation, despite some weakness in the publicly traded cannabis sector. In addition to producing cannabis in Canada, the company is involved in the distribution of cannabis products in many of the markets in which it operates. In the third quarter last year, the company reported increased revenues by 186 percent and sold 213 percent more kilos of cannabis than in the same time a year earlier.

Aphria (NYSE: APHA) (TSX: APHA) has grown its presence in the Canadian cannabis space via acquisitions and strategic investments and is one of the largest publicly traded cannabis producers. The company made two high-profile acquisitions last year, taking over Broken Coast Cannabis and buying Nuuvera, a Canadian cannabis company with already-existing strategic exposure to German and Italian markets. The vast majority of the company’s production capacity for cannabis is concentrated in a single facility, called Aphria One, which is located in Leamington, Ontario.

Medical Marijuana (OTC: MJNA) has been operating in the legal cannabis space for longer than most. The company owns numerous subsidiaries, including HempMeds, Kannalife and Kannaway. It also operates an international division, which has developed a substantial presence in Brazil, where it was the first company to introduce legal cannabis-based medicines to the Brazilian market. The company also has a direct marketing structure for cannabis products and appears to be well-placed to grow in the emerging CBD market.

OrganiGram Holdings (OTCQX: OGRMF) (TSX.V: OGI) is the parent company of Organigram Inc., one of the largest licensed producers of cannabis in Canada. The company delivers industry-leading yields from its growing facilities and is focused on expanding in the Canadian market for recreational and medicinal cannabis. Organigram developed a portfolio of brands for a variety of uses, including The Edison Cannabis Company, Ankr Organics, Trailer Blazer and Trailer Park Buds. In addition to growing cannabis, OrganiGram also distributes it.

With the passage of the 2018 Farm Bill changing the legal status of CBD, it is estimated that the CBD market will grow to be a $22 billion industry by 2022. SinglePoint has created a solid platform to be a part of that industry.

For more information on SinglePoint, visit SinglePoint Inc. (OTCQB: SING)

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California Cannabis Market Offers Growth for Cultivation Suppliers as Authorities Tackle Licensing Backlog

CannabisNewsWire Editorial Coverage: Growth in the Californian cannabis industry, currently restricted by licensing delays, is expected to accelerate over the coming months, bringing profits for suppliers of cultivation equipment.

California is one of the largest recreational cannabis markets in the world.
Recent delays in issuing cannabis licenses in California seem to be approaching an end.
Outside California, the growing global reach of the cannabis industry is drawing interest from significant international investors.

Sugarmade, Inc. (OTC: SGMD) (SGMD Profile) is one of the companies set to profit from this acceleration, thanks to its sales of hydroponic equipment to cannabis cultivators. Tilray, Inc. (NASDAQ: TLRY) is looking forward to a presence in Latin America after recently establishing a subsidiary in Chile. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has drawn billions of dollars in investment from a beverage giant, while Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) has benefited from a similar move from big tobacco as those industries’ big names look to get involved in cannabis. Meanwhile, Aphria (NYSE: APHA) (TSX: APHA) is expanding its reach beyond North America through an acquisition in Germany.

To view an infographic of this editorial, click here.

California’s Pot Power

When California passed the Adult Use of Marijuana Act in November 2016, the legislation sent waves through the American cannabis industry. The legalization of recreational cannabis in the most populous U.S. state offered the potential for a huge and lucrative market. The first U.S. state to legalize medical cannabis, California had been near the forefront of the cannabis industry for more than 20 years.

With an estimated population of nearly 40 million people and an electorate that had voted by a 57 percent majority in favor of legalization, California clearly has huge potential for the industry. Not only cannabis growers and retailers but also the companies supporting and supplying them are set to benefit from the change. Recreational cannabis sales became legal in January 2018, and businesses have moved to make the most of the new market. Licensing has caused delays for many companies, but if authorities can tackle the backlog, there’s potential for an enormously influential industry to spring up.

Cultivation Operations

The cannabis industry doesn’t operate in isolation. Companies such as Sugarmade, Inc. (OTC: SGMD), which has become established in other industries, are now moving into this field.

Sugarmade is a product and brand marketing company that invests in products and brands with disruptive potential. Building upon experience in food, restaurant supplies and packaging, it has recently made two big moves in the cannabis sector. These are natural moves for companies aiming to expand their customer base in consumable products, applying existing skills and experience to a relatively new market, and the approach appears to be working well for the company.

Sugarmade’s most recent move in hemp is the investment of $1 million in Hempistry Inc., a Nevada corporation catering to the growing demand for the pharmacologically active CBD component of hemp. The investment is a bold move that comes just as hemp cultivation is on the verge of federal legalization.

Hydroponic equipment is vital to the cannabis industry. It allows producers to cultivate plants in secure, tightly controlled indoor facilities where they can ensure the product is healthy and its potency is appropriate to their market. Without the hydroponics industry, there is no cannabis industry; thus, the rise of cannabis has been hydroponics’ gain.

As a large hydroponics company whose reach includes its ZenHydro brand, Sugarmade could become a leading supplier to California’s cannabis industry. As companies expand to serve the growing market and new companies emerge alongside them, they will depend on cultivation supplies, and Sugarmade is forecasting accelerating revenue growth as a result.

Licensing Issues

Currently, the biggest obstacle to this growth is the ability of California authorities to license cannabis cultivation applicants.

As with any drug requiring a doctor’s prescription, cannabis should be properly regulated. California’s laws include provisions for this, requiring commercial growers to apply for cultivation licenses to operate within the state. However, because federal law still prohibits the cannabis industry, it is difficult for cannabis companies to operate across state lines. Therefore, those aiming to sell cannabis in California will need to grow the crop within the geographic bounds of the market.

Companies applying to grow cannabis in California have encountered a fluid response over the past few months. Recreational legalization encouraged a rush of license applications as approved medical cannabis companies sought the ability to supply the new market and entrepreneurs sought to seize their own piece of the pie. This inevitably put a strain on the system, as happens after any big change. Applications started piling up. According to state licensing agency CalCannabis, an estimated 2,547 cultivation licenses were under review by the beginning of November, with little sign that the backlog was moving.

This slow movement has delayed expansion for the whole industry, including hydroponics suppliers such as Sugarmade. Without a license, the equipment to grow cannabis is of no use to a dedicated cultivator. A lack of licenses deters investment in the associated hardware and supplies. Until the industry is fully up and running, the consumer market won’t have time to fully expand.

Light at the End of the Tunnel

Fortunately, the problems appear to be nearing an end, spurred on by a crisis point.

Around 6,000 licenses have been issued on a temporary basis, with 1,054 of them about to expire. Given the further disruption to the industry that problem could cause, authorities seem to be speeding up their efforts to tackle the backlog. The licensing agency has started issuing annual permits, and industry insiders expect this process to accelerate over the next few weeks. More licenses will mean more companies cultivating cannabis, which will mean more purchases from cultivation suppliers such as Sugarmade.

Jimmy Chan, the CEO of Sugarmade, said: “Our customers, especially those in Santa Barbara, Monterey and Humbolt counties, the three most prolific cultivation areas in California, are indicating to us they too are expecting the permitting process to break free shortly, and they are thus informing us of their plans to accelerate purchasing. We believe this will add to our already strong expected growth rate. We are seeing the cultivation market increasingly shift to the larger commercial growers and we view these operators as our prime markets. We believe, especially considering the recently announced acquisition of Sky Unlimited, LLC, which focuses primarily on these large cultivation operators, we are optimally positioned to meet this expected wave of purchasing of cultivation supplies.”

The Bigger Cannabis Picture

California’s huge potential and brief licensing crisis are only small details in the much bigger picture of the global cannabis industry.

Tilray, Inc. (NASDAQ: TLRY) is a pioneer in the cultivation, production and distribution of cannabis and cannabis-derived chemicals, as well as in research to improve understanding of them. Through affiliates in Canada, Australia, New Zealand, Germany and Portugal, Tilray operates across multiple continents, engaging with researchers, doctors and consumers. It recently made a move into Latin America through its new subsidiary Tilray Latin America SpA. Licensed by the Chilean government to produce medical cannabis, Tilray is using Chile as a base to prepare for sales into other Latin American markets, as local laws allow.

One of the most important trends in the cannabis industry is the increasing interest outside companies exhibit in getting involved. Alcohol and tobacco companies have been sniffing around the big players of cannabis, which are relative small fry by comparison and therefore can easily be given a proportionately significant boost. The best-known example is Constellation Brands’ investment of $4 billion in Canopy Growth Corp. (NYSE: CGC) (TSX: WEED), showing Constellation’s interest in the future of the cannabis market. The involvement of big alcohol and tobacco companies, with their experience in lobbying and public relations for recreational drugs, will put more momentum behind the global move towards legalization.

Like Tilray, Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) is making the most of the growing global market for cannabis, doing business in North America, Latin America, Europe, Australia and Israel. The company has recently secured C$2.4 billion in investment from Altria Group, the owners of Phillip Morris USA. A move in line with Constellation’s investment in Canopy Growth, this will see a strengthening of ties between big tobacco and cannabis. As tobacco companies see their profits hit by anti-smoking campaigns, cannabis offers a promising alternative, and their presence provides a promising source of finance for cannabis.

Aphria (NYSE: APHA) (TSX: APHA), another North American company with investments in Latin America, has recently announced a move to strengthen its presence in Europe through the acquisition of CC Pharma. CC Pharma is a leading distributor of pharmaceuticals to Germany pharmacies that will provide Aphria with a useful channel to get its products onto German shelves.

The cannabis market is becoming a truly global one, with sales on nearly every continent and investment from huge multinationals. Even so, some regions remain particularly crucial, and an accelerated pace of licensing in California will bring huge benefits to the industry.

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

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Political Breakthrough Heralds the End of the Prohibition on Hemp

CannabisNewsWire Editorial Coverage: With federal legalization of hemp expected in the United States by Christmas, the farming and cannabidiol product industries are anticipating great changes in their future.

Hemp farming, which has been illegal in the United States since 1970, is about to be made legal under the newest Farm Bill legislation.
Pilot projects and work in Canada have allowed companies to prepare for U.S. hemp farming by developing their techniques, science and crop strains.
With legalization promising great growth, companies are seeking paths to investment opportunities.

Marijuana Company of America, Inc. (OTC: MCOA) (MCOA Profile) is among the innovating companies carrying out cultivation, research and development projects on sites in the United States and Canada. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has been expanding its operations through partnerships with other companies, covering investment, supply and research. Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) has expanded its cultivation and markets while negotiating for fresh investment. Aphria, Inc. (NYSE: APHA) (TSX: APHA) has partnered with a company specializing in branding to develop new consumer-driven brands and products for the cannabis market. Aurora Cannabis, Inc. (NYSE: ACB) (TSX: ACB) is putting out new products in the United States and looking to export those products abroad, following the successful export of medical cannabis into Europe.

To view an infographic of this editorial, click here.

The End of an Era?

For decades, hemp has been locked out of agricultural development in the United States. Once a vital crop used to produce the rope and canvas on which the American naval and merchant shipping forces relied, it was made illegal in 1970 under legislation designed to reduce drug addiction. For nearly half a century, farmers have been unable to cultivate this crop despite growing evidence of its usefulness.

Now that is set to change. After months of haggling, politicians in Washington have finally brokered a deal to pass the legislation that will make hemp legal. For the past four years, a small band of farmers and university researchers have been involved in pilot projects, testing the potential of the hemp market. The profitable outlook, together with growing demand for health and wellness products derived from hemp, have led politicians to change their stance.

Could 2019 be the year that hemp’s cannabidiol (CBD) derivatives become household commodities?

Legalization Legislation

The past decade has produced considerable growth for companies working in the hemp sector, such as Marijuana Company of America, Inc. (OTC: MCOA). Hemp is a form of the cannabis plant with very low levels of tetrahydrocannabinol (THC), the psychoactive ingredient in the marijuana strains of cannabis. Despite hemp’s essentially innocuous nature, it was made illegal under sweeping federal regulations that classified all forms of cannabis as Schedule I substances, among the most dangerous and least medicinally helpful of drugs.

Since 1996, the legal landscape has been changing as states have introduced pro-cannabis legislation in defiance of federal drug policy. This allowed companies such as MCOA to emerge and start looking at the potential of industrial hemp. However, these companies were caught in a no-man’s-land industry sector between conflicting state and federal legislation. Under those circumstances, building a commercial hemp industry had limited practicality.

A change at the federal level began four years ago, when the 2014 Farm Bill made it legal for companies to carry out pilot projects to grow hemp. Companies moved quickly to make the most of the opportunity, setting up facilities such as the farm MCOA established in Oregon. From 9,650 acres in 15 states in 2015, hemp production grew to 77,000 acres under 3,500 licenses in 23 states in 2018.

During the course of that change, the hemp industry has gained widespread acceptance in Washington and throughout the country, leading to cross-party support for hemp’s inclusion in the new Farm Bill as an agricultural commodity. But conflict over other aspects of the bill held the legislation up until late November. Then, in the waning days of a lame-duck Republican House, an agreement in principle was finally reached.

Once the farm legislation is passed as expected, growing hemp could become fully legal in the United States as early as January. That would be huge news for farmers and a great start to the new year for the fast-growing industry.

Farming Hemp

The anticipated legislative changes may lead to a new agricultural phenomenon for United States farmers, but it will be far from the first hemp crop in North America. Aside from the pilot projects in the United States, more liberal legislation in Canada has allowed farmers to get a head start on hemp production. For MCOA, this has meant pursuing profitable crops and supporting farmers on both sides of the border.

In Canada, MCOA’s efforts have taken the form of an innovative joint venture in New Brunswick. There, MCOA teamed up with Global Hemp Group, Inc. and four local farmers to experiment with techniques for hemp farming. This has led to practical developments, such as the use of a bean harvester to strip leaves and inflorescence from plants, improving the efficiency of the harvest. It has also led to more academic results, including research on plant nutrition with Dr. Ron Smith at the University of New Brunswick.

The company’s U.S. project at Scio, Ore., is earlier in its development and proportionally smaller. The Oregon cultivation benefited from good weather in 2018, extending growing time and leading to an improved harvest. Here, MCOA is already growing hemp with a higher CBD content — 6 to 12 percent. Large greenhouses were used to dry out these plants, with staff continuing to learn and refine their drying techniques with each batch.

On both sides of the border, partnering with other companies is helping MCOA maintain a high pace of innovation and expansion. The company is currently looking for opportunities to work with a cannabinoid extraction player in the United States to make the most of its crops.

Preparing for a Boom Market

With legalization around the corner, hemp companies are moving to strengthen their positions for market expansion.

For MCOA, this has meant a move into mainstream advertising. The company’s hempSMART™ subsidiary has partnered with asseenontv.pro to launch a television advertising campaign for its Full Spectrum Pet Drops, a pet well-being product using CBD.

CEO Donald Steinberg said, “As our hempSMART brand continues to grow, MCOA will continue to search for and utilize new partnerships that will uniquely market our incredible collection of all-natural CBD product formulations. We feel that our strategic partnership with ASONTV is an important milestone for the Company that will help promote our hempSMART Pet Drops to consumers across the country.”

The company has also filed an application to uplist its shares from OTC Pink to the OTCQB tier on the OTC markets. This strategic move should provide better access to institutional investors to raise funds targeted to help the company grow along with the wider industry. A new CFO and independent director were appointed over the summer to ensure strong leadership during this period of huge potential.

Like MCOA, Canadian cannabis company Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has been partnering with other companies to support its growth. This includes an investment and supply deal with 48North Cannabis Corp., a strategic supply agreement with MediPharm Labs Corp. and a research and development collaboration with Battelle. One of the factors fueling Canopy Growth’s expansion has been an investment from Constellation Brands, which pumped billions into Canopy Growth earlier this year. This financial move should give the American drinks giant a way into the cannabis and hemp markets, including the production and sale of CBD-infused drinks.

Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) has also been pursuing growth, with expansion into Latin America, an increase in the scale of cultivation and a collaboration with Ginkgo Bioworks to develop innovative products for the cannabis market. This has drawn the attention of outside investors, and the company is now in talks with Altria Group, Inc. about potential investments that could provide additional funds at a strategic turning point for the market.

Aphria, Inc. (NYSE: APHA) (TSX: APHA) aims to carve out a distinct space in the market through innovative consumer products. Aphria recently announced the creation of a joint venture with Perennial, Inc. to develop original consumer-driven brands and products for the cannabis market. This will join Perennial’s experience in brand development with Aphria’s expertise in cannabis to explore edibles, beverages and other new lines of products.

Aurora Cannabis, Inc. (NYSE: ACB) (TSX: ACB) is already busy putting new products out. The company has recently announced the release of cannabis softgel capsules for the Canadian market and expects to export them to international markets next year. The company already works on an international scale, having announced its first shipment of medical cannabis to the Czech Republic in November.

Pending hemp legalization in the United States is only the latest in a series of shifts in the wider cannabis sector, shifts that appear to have opened the way for a wave of expansion and innovation.

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

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Hemp Industry Sees Profitable Harvest as Farm Bill Approaches Finale

CannabisNewsWire Editorial Coverage: With the end in sight for the 2018 U.S. Farm Bill, which contains provisions likely to grant hemp full agricultural legalization, and revenues from existing hemp products rising, hemp farmers are seeing reasons for excitement this fall.

The Farm Bill is set to finally pass through Congress in the near future.
Predicted hemp revenues for the next few years are soaring.
Hemp is doing particularly well in states with supportive politicians, such as Kentucky.

Sugarmade, Inc. (OTC: SGMD) (SGMD Profile) has made the most of this opportunity through investment in Hempistry, a hemp cultivator with big plans for expansion. The popularity of cannabidiol (CBD) products means that hemp may soon surpass the value of other cannabis products, which is providing strong profits for companies such as Tilray, Inc. (NASDAQ: TLRY). This popularity will likely to lead to growth in the food and beverage industry, one reason why Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has received substantial investment from that sector. HEXO Corp. (OTC: HYYDF) (TSX: HEXO) plans to increase its 310,000 square feet of cannabis cultivation space to almost 1 million square feet by the end of the year. Meanwhile, Aphria (NYSE: APHA) (TSX: APHA) is developing new products to tap into Canada’s lucrative market.

To view an infographic of this editorial, click here.

Hemp Rides High on Wave of Change

Four years ago, it would have been virtually impossible to talk about a hemp industry in the United States. As a variety of the cannabis plant, hemp had been made illegal under legislation decades ago despite not containing significant quantities of the active drug compound that gets marijuana users high from other distinct forms of cannabis. State level reforms had done nothing to protect hemp on a federal level, and the plant was struggling to make its mark.

All that changed with the 2014 Farm Bill, which allowed for the cultivation of hemp at trial and research sites. Together with the emergence of laws in more cannabis-friendly states, this has allowed the industry to take off in a big way. Hemp is being put forward as a potential cash crop to be used in producing fibers, medicines and health foods. Farmers are starting to see big profits from hemp crops. And with fresh legislation on the verge of passing in Washington, the industry appears set for a surge in growth.

Fighting over the Farm Bill

For companies invested in hemp, such as Sugarmade, Inc. (OTC: SGMD), one piece of legislation has dominated the political landscape over the past year — the 2018 Farm Bill.

Farm bills are pieces of legislation passed by Congress every few years as the previous iterations expire. They set out government policies on issues of agriculture and food supply. As complicated pieces of law covering multiple topics, these bills are much haggled over by both houses, and the 2018 bill has been no exception. Divisions over food stamp rules and immigration policy has held up its passage for months.

This year’s farm bill has Sugarmade’s attention because of a section that will remove quality hemp production from drug enforcement restrictions nationwide. Backed by Senate Majority Leader Mitch McConnell, this has been one of the less controversial parts of the bill despite hemp’s illicit history. The possibility of offering struggling farmers a valuable cash crop is one that both parties can get behind.

Unfortunately, this important change for hemp was left in limbo thanks to the other battles over the bill. But now discussions in committee are finally moving towards a finished bill that unifies the House and Senate versions, as the lame duck Republican house majority tries to pass a law it can stomach before control of a dominant voting bloc passes to the Democrats.

Bottom line: the legalization of hemp cultivation could be just days away.

Hemp Heads into the Mainstream

This political change has been facilitated by shifting public attitudes towards hemp. The plant is increasingly popular in food and body care products and has been singled out as one of the top trends for next year by Whole Food Market. That’s good news for Sugarmade, which recently launched its own industrial hemp initiative, as it means there’s not just a consumer market for hemp-derived products but also the political will to make production easier.

These shifts in attitudes are reflected in the varying fortunes of states as well, with some receiving far stronger support for their hemp industry than others. For example, Kentucky’s hemp industry is bolstered by advocacy from the state’s politicians. Congressman James Comer has been outspoken in supporting the state’s industry and in pushing to get the Farm Bill approved.

Sugarmade is among the companies benefiting from Kentucky’s positive attitude towards hemp. The business has invested $1 million in Kentucky hemp company Hempistry to support its high-grade hemp operation for the U.S. market. Harvest of this year’s crop has recently started, following a test harvest of samples by the Kentucky Department of Agriculture (KDA), and the company is inviting interested parties to place bids on the crop. With demand for hemp rising, Hempistry’s legally grown, CBD-rich crop is likely to be in high demand.

Rising Hemp Revenues

One of the reasons behind Sugarmade’s investment in Hempistry is the dramatic rise in revenues from hemp crops. A few years ago, no one could have predicted the popularity hemp would achieve by 2018. The crop was mostly a side note, a reminder of the days when its fibers were used to make ropes and sales. When interest in CBD started to expand, producers realized that it could be extracted from industrial hemp. By turning this interest into a separate industry, businesses could sell CBD without becoming entangled in a mass of legal and social uncertainties.

Companies that have made strong investments in hemp cultivation, such as Sugarmade, will gain considerably from hemp’s ascendancy, to the benefit of managers and common share investors. Jimmy Chan, CEO of Sugarmade, commented, “Demand for industrial hemp and products derived from hemp is soaring with no let up in sight. We expect our direct investment into Hempistry to be accretive to common shareholders, and our supply agreement to be lucrative. All of us at Sugarmade see a tremendous opportunity to become a supplier to this fast-growing sector.”

Expanding the Hemp Harvest

With the hemp market growing so fast and the Farm Bill promising to make hemp farming easier, many companies are looking to expand their operations. Having just harvested 100 acres of CBD-rich hemp, Hempistry is focusing on achieving a 10-fold increase in its acreage next year, which would make it one of the largest hemp cultivators in North America.

This expansion is happening alongside that of companies in the related cannabis sector. In Canada, recreational legalization has been big news for companies such as Tilray, Inc. (NASDAQ: TLRY), one of the largest cultivation companies in the country. A leader in research, production and distribution, Tilray has seen staggering financial growth over the past year, with an 85 percent rise in revenue during the third quarter and a 78.9 percent rise for the year to date. Legal and social changes have created the space for a substantial new industry to flourish across North America and beyond, bringing in big bucks for the companies that pioneered the sector.

Growth into the beverage and whole food markets is a likely next step for many hemp and cannabis companies, and big players on the inside of those industries have started to take note. Constellation Brands, a leading American beverage manufacturer, has invested billions of dollars in Canopy Growth Corp. (NYSE: CGC) (TSX: WEED), one of the largest cannabis growers in Canada. Canopy Growth is relatively small fry compared to the power of Constellation Brands, but the funds such a corporate giant can spare make a big difference in an emerging industry. The result is likely to be the development and marketing of CBD-infused foods and drinks, pushing the industry into places it hasn’t previously reached.

HEXO Corp. (OTC: HYYDF) (TSX: HEXO) produces cannabis through its Hydropothecary brand and recently announced plans to develop nonalcoholic, cannabis-infused beverages with Molson Coors Canada. This joint venture with one of the world’s biggest beer makers is a significant move to position HEXO in the burgeoning cannabis-infused drinks market. The company also announced that it has closed on the acquisition of its first major facility outside of Quebec.

Aphria (NYSE: APHA) (TSX: APHA) has also seen rising revenues and profits since 2016, thanks to the growth of this innovation-led market. It recently announced a collaboration with Perennial, Inc., to develop products for the Canadian market, a critical region for any company looking to expand beyond the United States.

With hemp revenues on the rise and politicians about to ease the way for hemp farmers, this is a sector that’s likely to keep growing in strength for years to come.

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

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