Full-Spectrum Seed-to-Sale Model, Quality Branding Key to Cannabis Success

CannabisNewsWire Editorial Coverage: Last year was a year of maturation for the cannabis market.

California’s growing pains are a recipe for success for handful of savvy operators
Brands, consistency and scalability likely deciding factors for many companies
Projected global market size an open-and-shut case for scaling up NA sector

The market growth resulted from retailers in nine legal adult-use states being pushed beyond the sector’s historically core demographics, targeting fast-growing new segments such as women, with an emphasis on elements such as wellness and clearly labeled/low-dose alternatives. That trend was reinforced with CBD breaking out into the mainstream, as industrial hemp became legal throughout the United States, and cannabis companies looked for ways to stand out from the crowd. Some companies were more successful at this than others, with TransCanna Holdings Inc. (CSE: TCAN) (XETR: TH8) (TCAN Profile) making huge strides recently to expand the upper-end procurement part of the business, as well as flesh-out its footprint of branded offerings. Other moves have been made by comparable sector players such as Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), DionyMed Brands Inc. (OTCQB: DYMEF) (CSE: DYME), Cresco Labs Inc. (OTCQX: CRLBF) (CSE: CL) and CannaRoyalty Corp. (OTCQX: ORHOF) (CSE: OH), which are pursuing similarly comprehensive approaches to the sector that run the gamut from raw inputs to changing branding, marketing and distribution methods.

To view an infographic of this editorial, click here.

Diverse Markets Hold Big Potential

California’s administrative and tax regime may have cost the state half a billion dollars or more in potential cannabis market tax revenues through over regulation, with the state being the first market in the world since transitioning in 2016 from medical to recreational that has actually witnessed a subsequent decline in the size of the legal retail market. This is in stark contrast to Massachusetts and Nevada, which both dramatically outperformed expectations. And while the California legal retail market may have come in around half a billion shy of projected targets, the illicit market is doing just fine, with an estimated value of $3.7 billion last year, accounting for as much as 80% of all sales. This is a clear indicator that the potential exists to have hit analyst-projected targets for the legal market, had California regulators not handicapped a growing industry just as things were really getting started.

In fact, with thousands of cultivation and manufacturing licenses set to expire in the next few months and only Senate Bill 67 on the horizon to address the problem, some analysts are predicting that California may see supply shortages in the near future. At any rate, the national and international markets are shaping up quite nicely, with the most recent worldwide consumer spending estimates from Arcview Market Research and BDS Analytics showing a 39.1% year-over-year jump to $17 billion in 2019 and beyond. This is a market which is on track to run at an estimated 26% CAGR through 2022, hitting upwards of $31.6 billion, making it an extremely lucrative export market for sophisticated North American cannabis brands.

Self-Contained Ecosystem and Closed-Loop Brands

Founded in 2017 with the goal of genuine seed-to-sale capability and rapidly acquiring a bevy of premium cannabis brands, Vancouver-based TransCanna Holdings Inc. (CSE: TCAN) (XETR: TH8) is pursuing a true “self-contained ecosystem” approach to the sector via its California-based, wholly owned subsidiaries. TransCanna is intent on ensuring maximum brand consistency by handling every aspect of the production process — from procurement and branding and design through to distribution, transportation, marketing and sales.

The company’s latest acquisition announcement will see TransCanna picking up such well-performing Goodfellas Group LLC brands as Daily Cannabis Goods, which saw more than 2,100 units shipped during its first month in August of last year before breaking the 10,000 mark just four months later. TransCanna anticipates adding at least three more items to the Daily Cannabis Goods product mix and also managed to pick up the proprietary, in‐house Simple brand of user-friendly Simple Kit™ products in the Goodfellas Group deal, which are specially crafted to give new users a positive first cannabis experience.

Forged in the Crucible of a Nascent Industry

The company cut its teeth amid the growing pains of California’s burgeoning — but still very young — recreational market. Today TransCanna appears well poised to successfully deliver on a closed-loop cannabis model that can cost effectively bring goods to market while still dealing with prevailing regulations.

CEO TransCanna Jim Pakulis spoke in mid-April of the company’s tremendous efforts to complete the acquisition of what is arguably the largest vertically-integrated cannabis focused facility in California. The $15 million acquisition consists of a 196,000-square-foot, turnkey manufacturing facility on a 5.5-acre piece of land in Modesto, estimated to be able to support expansion of the site with an additional 400,000 to 600,000 square feet of facilities for cultivation.

Total revenues from the acquisition, including manufacturing, extraction, distribution and cannabis sales, are currently projected to be from $220 million to $363 million a year. A recent independent third‐party business valuation firm’s conclusion put the enterprise value of the proposed business, at around $50 to $75 million. That estimate includes things such as the value of the recently renovated manufacturing facility’s institutional-grade packaging and extraction equipment. This appears to be a sweetheart deal, placing the company in a solid position to take advantage of a potential supply shortfall in California. Similarly, the move sets up TransCanna for success on the rapidly developing national and international stages.

Growth Financing Gone Well

In addition, the company originally announced a CD$10 million broker-syndicated private placement but within short order was oversubscribed to CD$16 million. The funds were used to assist in the aforementioned acquisition and has already executed a sublease agreement for an additional 10,000 square feet of multipurpose floorspace in Adelanto, California.

This satellite facility is the first of five anticipated satellite distribution network facilities that will be strategically located throughout the state to support TransCanna’s goal of quickly having 15 reliable, consistent, branded products on offer at the scale necessary to keep the business growing alongside demand. The completely fenced Adelanto complex is reportedly of superior quality and already has existing round-the-clock armed security, making it a solid deal at a negotiated price of $2 per square foot per month for four years, which is roughly 30% below current market rates.

Furthermore, TransCanna recently applied for a permanent manufacturing, distribution and transportation license for Adelanto, proving that the company’s immediate focus is on ensuring city and state licenses are in hand as soon as possible. The company anticipates applying for licenses with the local regulatory body in Modesto by the first of June. The company anticipates being able to prepare and package the Daily Cannabis Brand half gram pre-rolls at the facility, then transport them straight to dispensaries without the need to involve a third party or incur any additional expenses.

Cannabis Companies Making Big Moves

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), one of the largest players in the space, has made big moves lately to expand its footprint in both North American and Europe. In April, Canopy announced a definitive agreement to acquire leading multistate operator Acreage Holdings Inc. outright in a deal valued at around $3.4 billion. This massive deal could make Canopy a real juggernaut, with a leading position in every major international market for legal cannabis. The move will give the company a sizeable presence in the United States as Canopy rolls out its U.S. hemp operations in parallel, which will span cultivation, extraction, processing, and packaging.

DionyMed Brands Inc. (OTCQB: DYMEF) (CSE: DYME), while still a relatively small company compared to others in this area, has nevertheless put together a compelling model. The company’s approach spans multistate cannabis brands as well as a distribution and direct-to-consumer delivery platform. The company recently managed to secure a roughly $7.34 million agreement with a syndicate of agents co-led by Canaccord Genuity Corp. and leading Canadian independent investment dealer Cormark Securities.

Cresco Labs Inc. (OTCQX: CRLBF) (CSE: CL) has also been making big moves in the sector, recently prequalifying for a cultivation and processing license in Michigan and signing a letter to acquire VidaCann, one of the biggest and most advanced medical cannabis providers in Florida. The VidaCann deal would put Cresco in operation in six of the country’s most populous states, granting access to some 140 million potential customers (roughly 65 percent of the total addressable U.S. cannabis market).

Cresco also signed a definitive agreement in April to acquire California-based CannaRoyalty Corp. (OTCQX: ORHOF) (CSE: OH), which does business under the well-known Origin House moniker as a leading cannabis products distributor, as well as a provider of brand support services. CannaRoyalty has built a serious operation with more than 50 brands under the Origin House name. The Cresco Labs acquisition would harness the branded product development and distribution expertise of two of the industry’s top players.

TransCanna is banking on the future of intelligently executed cannabis brand offerings, not just in California and North America but around the world as well. With longer-term projections of $57 billion by 2027 for the global market, the company could be setting the cornerstones today of a self-contained ecosystem weed empire that may one day see its premium brands in dispensaries all over the globe. Investors may want to keep tabs on TransCanna as the company’s growing brand portfolio and physical presence in California begin to bear fruits.

For more information on TransCanna Holdings, visit TransCanna Holdings Inc. (CSE: TCAN) (XETR: TH8)

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Next Stage Cannabis Stocks in the Spotlight

CannabisNewsWire Editorial Coverage: Projections for the cannabis markets are staggering, yet there’s evidence that the lofty estimates may be understated.

Cannabis projections often fall far short of actual sales growth.
Cannabis-infused beverages looks to be next area of explosive upside.
Beverage and cannabis companies striking deals to gain market access.
New technologies could snag significant market share.

Once viewed as wild conjecture for the future of cannabis markets, forecasts in 2015 fell severely short of actuality. At that time, consensus was that Canada could reach CA$2.8 billion in legal sales by 2020. Sage prognosticators now say that the market may exceed CA$7 billion in 2019. Catering to the tastes of market demographics, intense interest is now focused on the cannabis-infused beverages market. Not even legal in Canada until this fall, the infused beverage market is already pegged to reach a mind-boggling CA$4.4 billion within five years.

Joining the ranks of the majors to meet this titanic demand, Sproutly Canada Inc. (OTCQB: SRUTF) (CSE: SPR) (SRUTF Profile) announced a joint venture with Moosehead Breweries, the largest and oldest independent beer company in Canada. Cannabis colossus Tilray Inc. (NASDAQ: TLRY) announced a research partnership into infused beverages and is bringing in executives with backgrounds in the beverage industry. The maker of Corona and Modelo beer increased its stake in Canopy Growth Corp. (TSX: WEED) (NYSE: CGC) to 38%, spurring speculation of cannabis-infused beverages to come. HEXO Corp. (NYSE American: HEXO) (TSX: HEXO) entered a joint venture with Molson Coors Canada to produce CBD-infused beverages. And New Age Beverages Corp. (NASDAQ: NBEV) is anticipated to begin roll out of Marley+CBD-infused drinks in four targeted U.S. states.

To view an infographic of this editorial, click here.

Untapped Market

Soothsayers seem to consistently underestimate the warp-speed of public acceptance and the velocity of uptake of cannabis products. As marijuana muscles into the mainstream, usage among all age groups is on the upswing. However, among the most coveted 18-34 demographic, there’s an explosion of acceptance as these users mature in a world where cannabis is common. Millennials are about three times and Gen Z about four times more likely to use cannabis than aging Boomers. Forward-leaning cannabis companies are full throttle in product and brand development to corral this coveted demographic and capture market share, now and for decades to come.

According to a United Nations report, cannabis is the most widely consumed drug on the planet. Even so, only about 4% of the world’s adult population has used it. North America, the leader in cannabis growth, is only the fourth largest cannabis consumer market on the globe, ranking behind Asia, Africa and Europe in sheer size of its cannabis consumer market. As public perceptions change and legalization expands, the number of users is certain to skyrocket in a nearly untapped market. A global transition is underway and presenting a once-in-a-generation opportunity.

The Deal

Of particular interest is the cannabis-infused beverages market. Poised to capture an outsized share of the infused beverage boom, Sproutly Canada Inc. (OTCQB: SRUTF) (CSE: SPR) and Moosehead announced a joint venture that marries Moosehead’s vast adult-beverage experience with Sproutly’s innovative cannabis technology. The result? A fast-onset, fast-offset option that some have called the industry’s holy grail of beverages.

Leveraging Sproutly’s transformational technology to create the world’s first and only truly natural water-soluble cannabinoids, the partners will develop, produce and market beverages that will solve the major issues that limit the consumer appeal of cannabis-infused beverages in the market today: 1) a beverage that actually tastes good and 2) that can provide the cannabis experience with an immediate onset and controllable experience of up to 90 minutes. Sproutly and Moosehead intend to be ready to put recreational infused beverages on the shelves by the time of legalization.

Utilizing Sproutly’s acquired patent-pending process, validated by 13 years of scientific R&D, the partners will form a new company to launch a full line of infused products. Moosehead is an iconic Canadian brand, selling more than 140 million bottles of beer annually across Canada, the U.S. and 15 countries around the world. The company’s 152 years of beverage experience and formulation prowess has led to over a dozen popular brands, including licensed and supporting partner brands such as Angry Orchard, Twisted Tea and Samuel Adams beer, proving the ability to manufacture and market leading adult beverages. In addition, the Oland family who owns 100% of Moosehead also owned the beer brand Alexander Keith’s prior to its sale to Labatt Brewery Company which is currently owned by Anheuser-Busch InBev.

Unlike other lopsided joint venture forays into cannabis beverages, the Sproutly-Moosehead agreement is a 50-50 equity partnership structured to maximize the alignment of interests. Even the board of directors will have an equal number of board members from each company, with Sproutly appointing the chairman. The joint venture includes a five-year exclusive agreement for Sproutly to deliver its breakthrough water-soluble cannabis solution, and Moosehead will license all its brands and related intellectual property to the new company formed by the agreement. Moosehead will provide marketing, distribution, logistics, admin and other resources while Sproutly will deliver formulation, R&D, marketing and other resources.

Underscoring the significance of the agreement, Matthew Oland, a Moosehead executive and scion of the founders, will leave Moosehead to become CEO of the newly formed company. Moosehead and Sproutly combined appear to be going all in on this enterprise.

Paradigm Shift

Perplexing problems plague the creation of ingestible cannabinoids. Cannabinoids and terpenes are completely insoluble in water resulting in serious difficulties with absorption, dosing, efficacy and onset/offset times. For years laboratory-formulated cannabinoids have been engineered to become water compatible and sort of mimic water solubility. These techniques have been in use by pharmaceutical and beverage companies for decades, but production challenges and insolubility issues remain for cannabinoids. Relying on the same outdated, costly and ineffective techniques, these encapsulation and emulsion technologies are what’s currently being employed by the suitors to the cannabis-infused beverage bonanza.

Establishing a paradigm shift in how cannabis is effectively and efficiently processed, delivered and consumed, Sproutly is transcending the industry’s current antiquated regimens. Already a licensed premium cannabis producer with 1,400 kg annual production capacity, Sproutly also owns the rights to the world’s first and only naturally water-soluble cannabis technology for Canada, Australia, Jamaica, Israel and the entire European Union.

Sproutly’s partner who licensed the technology, Infusion Biosciences, discovered that the cannabis plant naturally produces water-soluble forms of phytochemicals. Infusion Biosciences then created a patent-pending Aqueous Phytorecovery Process (APP) for the recovery of naturally water-soluble phytochemicals (Infuz₂O). Unlike encapsulation or emulsion, Infuz₂O is a truly water-soluble cannabis solution that fully dissolves in water and can be easily and economically added directly into beverage formulations.

Infuz₂O has the unique ability to deliver precise doses and measurable amounts of cannabis and is predictable, with less than five minutes onset and less than ninety minutes offset times, the same as smoking or vaping cannabis. Sproutly’s APP Technology also recovers valuable natural oil-based cannabinoids in addition to the water-soluble phytochemicals destined for beverages. Sproutly’s transformational technology produces the world’s only naturally water-soluble bioactive molecules that deliver the full experience of cannabis that is strain specific. Product and production advantages such as these could lead to a lion’s share of a market set to quickly balloon to billions of dollars.

Creating Value

Highly scalable, Sproutly’s pioneering technology is also an extremely cost-effective process to extract both water-soluble and naturally derived oil-based cannabinoids. Using its APP technology, Sproutly should be able to produce better quality products faster and cheaper than the competition. Little wonder Moosehead is so committed. Current methods require at least four complex processes to extract cannabis oil from biomass and three more to obtain water-compatible products.

In just two steps, using APP technology, Sproutly produces both water-soluble and oil-based cannabinoids without using any alcohol or solvents. And that’s not all. Using current CO₂ extraction methods, THC recovery rate is about 60%. Sproutly’s APP Technology delivers a total of 90% THC recovery rate. The economic ramifications seem obvious. This isn’t an idea or concept; the technology is in place. In fact, the APP Technology is already proven in real-world applications and is ready for full operational deployment.

Shortly after acquiring Infusion Biosciences Canada and the rights to use the APP technology, Sproutly entered an exclusive technology license agreement with Micronutrient Technologies to produce nutritional minerals in water solutions in a low-cost, scalable process. The agreement provides Sproutly the unique ability to add healthy, water-soluble minerals such as calcium, magnesium, iron and zinc, and in different combinations, directly into various cannabis beverages without artificial chemical additives. Sproutly now has the unequaled ability to create beverages that not only cater to cannabis consumers but also cross over to the large, functional beverage market. Sproutly’s seemingly unparalleled versatility in beverage formulation crosses multiple sectors with limitless end-user applications.

The joint venture with Moosehead not only validates Sproutly’s technology but also positions the venture to reap enormous rewards in the nascent cannabis-infused market. And this may only be the beginning for Sproutly.

In the Hunt

Tilray Inc. (NASDAQ: TLRY) is one of the established cannabis companies in the hunt for the infused-beverage market. In December, the company announced a research partnership with Anheuser-Busch. Tilray also recently announced that it was bringing executives into its leadership team who have strong backgrounds working for big beverage companies.

Focused on healthy beverages, New Age Beverages Corp. (NASDAQ: NBEV) is banking on the popularity of Bob Marley to help grow its products. The company’s Marley+CBD products will first begin roll out in four U.S. states, although a date hasn’t been established for when that will happen.

Last August, Constellation Brands, the maker of Corona and Modelo beer, increased its stake in Canopy Growth Corp. (TSX: WEED) (NYSE: CGC) to 38%, spurring speculation of cannabis-infused beverages to come. Canopy’s forays into the U.S. hemp markets suggest CBD beverages may be on the horizon.

HEXO Corp. (NYSE American: HEXO) (TSX: HEXO) entered a joint venture with Molson Coors Canada (MCC) last summer to produce CBD-infused beverages in which the brewing giant took 57.5% ownership. The new company will be led by a former Molson Coors executive. As part of the deal, HEXO issued 11,500,000 warrants to MCC.

There’s little argument where the cannabis markets are headed, and all indications point to infused beverages becoming the next big surge. Perhaps the lofty forecasts for the cannabis-infused beverages market in Canada will imitate past cannabis projections and vastly exceed expectations again.

For more information on Sproutly Canada, visit Sproutly Canada Inc. (OTCQB: SRUTF) (CSE: SPR) (FRA: 38G)

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

The Cannabis Bonanza Has Just Begun

CannabisNewsWire Editorial Coverage: The cannabis industry presents a rare opportunity to profit from spectacular growth in a virtually untapped market.

Legal marijuana market projected to reach $146.4 billion.
United States and Canada current epicenter of cannabis growth.
Brand recognition and retail reach imperative for market share.

Capturing market share and creating long-term success in this explosive market will require brand recognition and retail reach. Shortly after posting its tenth consecutive quarter of increased revenues, Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile) announced intentions to further expand its footprint with the acquisition of premier licensed cannabis retailer, City Cannabis Corp. A finalized accretive acquisition will add significant revenues to Wildflower, providing access to several valuable cannabis licenses in lucrative premium locations. Other companies in the sector are looking to grow in the market through other promising ways. Tilray Inc. (NASDAQ: TLRY) recently acquired Natura Naturals Holdings, boosting capacity to supply cannabis products across Canada. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) bought hemp company AgriNextUSA to accelerate entry into key American jurisdictions. Medmen Enterprises Inc. (OTCQX: MMNFF) (CSE: MMEN) announced the purchase of two vertically integrated operations, which include retail locations and 25,000 square feet of cultivation and production capacity. And only two weeks ago, Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) completed the acquisition of Eureka to provide access to California’s wholesale market through a large greenhouse facility.

To view an infographic of this editorial, click here.

Market Frenzy

The sweeping growth of the cannabis industry is rooted at least in part from a groundswell of public support that has turned into a tidal wave of acceptance. Fifteen years ago, only a third of Americans supported federal legalization of marijuana. About two-thirds of Americans now support legalization, up from only 54% two years ago. Among adults under age 35, a whopping 85% favor federal legalization. The movement gained so much momentum so fast that the industry is scrambling to keep up. As the cannabis industry and markets mature, acquisition and consolidation deals appear to be all but certain.

The global legal marijuana market, valued at $9.3 billion in 2016, is expected to reach $146.4 billion by the end of 2025, an incredible 16-fold increase over nine years. Legal cannabis markets are still a relatively new phenomenon, and the market is nowhere near its total sales potential. An estimated 272 million global consumers use cannabis, equivalent to only about 4% of the world’s population. Growth trajectory is virtually vertical. Perhaps nowhere is this hyper-growth more spectacular than North America. Wall Street’s top cannabis analyst forecasts the U.S. market to grow to $80 billion by 2030 assuming national availability.

B.C. Center of Boom

Cannabis demand is even greater north of the border. The industry has been struggling with cannabis supply shortages ever since recreational cannabis was legalized across Canada. The country’s westernmost province, British Columbia, is no exception. The B.C. market registered a little over CA$19 million in legal cannabis sales in 2018, but that number is expected to explode to CA$722 million in annual sales by 2024 — a mind-boggling 37-fold increase over six years.

Pegged to soar nearly 3,700% in the next six years, British Columbia is ground zero for cannabis growth. Headquartered at the epicenter of this upsurge, Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) has already staked out an enviable market position and is further expanding its retail footprint and product distribution in the province. The company recently announced that it intends to acquire City Cannabis Corp. in an all-stock deal.

Holding two of the three City of Vancouver licenses to sell cannabis, City Cannabis is a premier cannabis retailer and the only company with multiple licenses in British Columbia. The Letter of Intent looks to solidify Wildflower’s position as a high-profile retail outlet of premium brands generating millions in revenues right in the heart of the B.C. cannabis boom.

“City Cannabis and Wildflower are the perfect combination of premier products and a premier consumer retail experience,” said Wildflower CEO William MacLean. “City Cannabis’ retail consumer data and insight will help shape development of Wildflower’s product line-up while the retail expertise of City Cannabis will aid Wildflower in its retail expansion. The combination of Wildflower and City Cannabis will form a truly global cannabis company.”

Born in British Columbia, Wildflower now has a retail reach that extends from Vancouver to Los Angeles and New York. Established in 2012, Wildflower Brands is constantly expanding development, design, marketing and retail distribution of its branded products in the cannabis sector. The company launched into Washington State in 2016 and has been on a tear ever since.

Creating a Global Brand

Today Wildflower now markets its distinctive CBD+ products to more than 300 retailers in the health and wellness space and operates in regulated cannabis markets throughout North America in accordance with jurisdictional regulations for THC and CBD+ products. Wildflower’s unique and holistic products are developed and manufactured at the company’s U.S.-based GMP facilities, tested by a third-party lab and backed by a 100%-satisfaction guarantee.

Each Wildflower product is synergistically formulated to create a unified global wellness brand. For example, Wildflower’s highly recognized Wildflower Wellness brand offers a broad array of hemp-based, full-spectrum, CBD-infused products from vaporizers and capsules to tinctures, soaps and topicals.

The company’s King Recharge is on the cutting edge of cannabis technology and delivery systems with its King Extracts, a sleek, rechargeable vaporizer offering five popular CBD strains and a unique pocket-sized charging and storage case.

Closely associated with select hospital oncology departments, Exclusive is Wildflower’s Los Angeles-based dispensary of premium cannabis products. Wildflower already owns 14 cannabis licenses in California for recreational and medical cannabis cultivation, manufacturing, distribution, retail and delivery. Activating all these licenses could be a jackpot for the company, driving revenues while minimizing risk.

Expansion into Canada with the acquisition of City Cannabis is the next step in Wildflower’s global strategy. The thriving retail outlet, with licenses for several more locations, provides Wildflower with a high-profile presence in what may be one of the greatest growth markets in the world. Wildflower plans to market its enormously successful products through the outlet and launch into the over-the-counter market with its CBD formulations and accessories.

An Expanding Footprint

Wildflower’s U.S. footprint currently encompasses more than 200 retailers in Washington state and more than 20 retailers in New York City. The company partnered with Retail Worx to establish shop-in-shop retail locations in the nucleus of New York and open its first Wildflower by Bridges General store.

The obvious next step for Wildflower in this partnership is a rollout into other Bridges General’s stores in New York City and San Francisco. Retail distribution in other major U.S. markets includes over 80 wellness and healthcare practitioners and an army of retail stores nationwide numbering more than 300. Wildflower is aggressively expanding both brand recognition and retail reach.

Wildflower continues to capture ever-greater market share with innovation, retail expansion and its growing family of popular brands. The company’s strategic partnerships, acquisitions and organic growth are all bolstered by the company’s marketing genius focused on locking in loyal consumers.

Grabbing national and celebrity attention, Wildflower used ingenious product placement during the 2019 Oscars by including its CBD+ Healing Stick in each of the gift bags of the stars, and Hollywood is embracing the product.

But Wildflower didn’t stop with the stars. To expand exposure into a new target audience, Wildflower launched an infomercial campaign in Phoenix promoting the company’s Wellness’ Cool Stick. And across the country, the company has employed an innovative pop-up store technique in SoHo, New York, to introduce its Wildflower Wellness products. To make this happen, Wildflower identified a compatible high-profile retail venue and struck a deal with the outlet, then marketed its products with fanfare in the upscale establishment for a limited time period, raising market uptake and visibility.

Wildflower is on a mission to create a global cannabis enterprise. With such rapid expansion of brand recognition and retail distribution, Wildflower is carving out its slice of the cannabis bonanza.

Buying Up Cannabis

And Wildflower isn’t alone in focusing on the booming cannabis business. Several market leaders have announced recent moves designed to strengthen their positions in the sector.

Tilray Inc. (NASDAQ: TLRY), a global leader in cannabis research, cultivation and distribution, has announced the closing of a definitive agreement to acquire all of the issued and outstanding securities of Natura Naturals Holdings Inc., the parent company of a licensed cultivator of cannabis. The acquisition boosts the company’s capacity to supply cannabis products across Canada. Natura’s facility will be renamed High Park Gardens and be used as an additional cultivation facility to serve the medical and adult-use market in Canada.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) acquired AgriNextUSA. The acquisition will accelerate Canopy Growth’s entry into key American jurisdictions. “The United States is the next stop on Canopy Growth’s desired path to becoming a leading, revenue-generating company focused on all aspects of cannabinoids and their potential,” said Bruce Linton, co-CEO and Chairman of Canopy Growth.

Medmen Enterprises Inc. (OTCQX: MMNFF) (CSE: MMEN) recently purchased two vertically integrated operations, which include both retail locations and 25,000 square feet of cultivation and production capacity. The company paid a combination of cash and stock valued at an aggregate of $33.5 million. With the closing of the acquisitions, MedMen will be licensed for three medical-use cannabis dispensaries in Arizona.

Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) completed the acquisition of Eureka, which operates a cultivation facility that is developing three dispensaries across California. Curaleaf has the largest footprint of single-branded retail stores in the United States. “The acquisition of Eureka cements our foundation in California and positions us well in the largest cannabis consumption market in the U.S.,” said Joseph Lusardi, CEO of Curaleaf.

Some have called the cannabis bonanza a once-in-a-generation opportunity and predict that this is simply the start of a decade-long cannabis bull market that’s only just begun. All indications suggest those predictions may be correct.

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

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Hemp Boom Spawns Lucrative Deals

CannabisNewsWire Editorial Coverage: Ever since the Farm Bill was signed into law, farmers across the United States have rushed into hemp cultivation, driving demand for the supplies needed to grow the crop necessary to meet surging CBD use.

Global hemp industry to reach $22 billion in 2022.
CBD market could increase 40 times in the next four years.
Hemp farming skyrockets to meet demand.
Serious squeeze on hydroponic and cultivation supply products.

Hemp is booming across the country, and nowhere more so than in Kentucky, where the applications to grow hemp are expected to increase fivefold, and acreage dedicated to growing the crop is set to more than triple this year. At the forefront of this explosive market growth, Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) recently inked a strategic supply contract with Hempistry Inc., a leading Kentucky-based cultivator of high CBD content hemp. Since passage of the farm bill, other major Canadian producers have also been making deals to expand hemp and CBD operations south of the border. Tilray Inc. (NASDAQ: TLRY) announced the acquisition of a large hemp foods maker, and Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is making substantial investments in New York state. Aphria (NYSE: APHA) (TSX: APHA) temporarily withdrew from the U.S. market while fighting off a hostile takeover bid. And after a $1.8 billion investment from a U.S. tobacco giant, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) is expanding globally with eyes to the U.S. markets in the future. Even the largest Canadian licensed producers are betting on hemp CBD, underscoring titanic market growth.

To view an infographic of this editorial, click here.

The Money Pump

In the course of only a few years, CBD extracted from hemp is now marketed for everything from pain relief and reducing inflammation to relieving stress and anxiety. CBD is sold in an array of products from shampoos, lotions and oils to drinks, pet treats and granola. The popularity of CBD isn’t likely to wane any time soon, and the soaring popularity is reflected in market projections.

The CBD boom was presaged by passage of the Farm Bill, an absolute sea change in the balance of power in global hemp markets. Historically, the United States had been an importer of hemp products, but now the U.S. market is expected to lead the global hemp industry reaching an eye-popping $22 billion in 2022. With a market expected to increase 40-fold in the next four years, it’s little wonder there’s such an enormous upsurge in hemp cultivation.

To achieve quality and consistency, much of the hemp cultivated in North America isn’t grown from seed but is cloned or propagated from existing hemp plants. Known as micropropagation, this process allows for a large number of plants to be readied simultaneously, facilitating stable, consistent production and guaranteeing that the plants are exact genetic copies of the most desirable mother plants. It’s exceptionally important in hemp cultivation to produce healthy, high-content CBD plants with all the characteristics required by hemp-product producers.

This process gives cultivators more control over how their plants grow and results in more valuable crops. The rapid vegetative propagation of plants under the controlled conditions of light intensity, temperature and precise nutrient mediums requires unique equipment and supplies. The nationwide surge in hemp production has created shortages and increased demand for these much-needed hydroponic supplies. With the boom in hemp cultivation occurring this planting season, many of the supplies required for successful micropropagation operations are in short supply. This supply squeeze has spawned an unprecedented industry opportunity.

The Right Moves

Identifying the upside early, Sugarmade Inc. (OTCQB: SGMD) has been making all the right moves to capture an outsized share of this burgeoning new market. A specialty product and brand marketing company, Sugarmade invests in and develops products and brands with disruptive potential.

Expanding its footprint in the supply of high-demand hydroponic and cultivation products, the company has been on an acquisition spree and executing new supply contracts to capture an ever-increasing market share. The latest supply contract with hemp cultivator Hempistry reflects Sugarmade’s hydroponic trajectory. Utilizing advanced plant genetics and technological innovation, Hempistry is now scaling operations to approximately 2,600 acres aggregated between its subsidiaries, while adding to the product value chain and enhancing production efficiencies.

To achieve these objectives requires a secure, reliable source of specialty equipment and supplies. Sugarmade recognized the potential windfall last year and locked in an option to invest $1 million in Hempistry. That relationship has blossomed into a supply agreement that should serve both companies extremely well. Hempistry is acquiring supplies for its hemp micropropagation operation from Sugarmade, and expectations are that this supply relationship will flourish as Hempistry expands operations domestically and internationally. The agreement will ensure supplies reach supply-starved Kentucky, which is on the leading-edge of the hemp cultivation boom.

“Industrial hemp is promising and is the fastest area of growth in Kentucky agriculture,” said Ryan Quarles, Kentucky commissioner of agriculture, in an interview with CNBC. “We don’t know if industrial hemp will replace tobacco, but we are going to champion it.”

Sugarmade CEO Jimmy Chan, now also a director at Hempistry, commented, “With at least 42,000 acres of hemp expected to be planted in Kentucky and considering an average plant density per acre of well over 1,000, farmers in Kentucky will need hundreds of millions of clones over the coming years. When these numbers are multiplied over the many other hemp cultivation states, it is easy for anyone to see the strong demand scenario that is quickly developing. We have already received our first shipments of micropropagation supplies, and we are in process of making deliveries. Sugarmade plans to significantly expand our operations relative to hemp cultivation.”

E Pluribus Unum

Out of many, one. The Latin phrase emblazoned on U.S. currency should be the slogan for what’s happening in the fractured and fragmented specialty hydroponic supply industry. With demand reaching epic proportions, the clutch of small and inefficient supply companies is ill prepared to service the requirements of the blooming hemp industry.

Cognizant of the shortfall, Sugarmade is on a mission to consolidate the fragmented industry by strategically acquiring other synergistic hemp-based operations. Sugarmade’s brands already include: Zenhydro.com, a comprehensive online hydroponics supply outlet; AthenaUnited.com, a specialist company providing hydroponic supplies to large commercial cultivators; CarryOutSupplies.com, a leader in paper and plastic supplies; and BudLife Cannabis Storage Solutions, which offers the world’s only patented intelligent packaging, storage and distribution for medicinal plants.

Continuing its consolidation strategy, Sugarmade recently announced that it will acquire the flagship operation of Washington State-based Hydro4Less, which is expected to produce about $5 million in revenues and be profitable this year. In the agreement, Sugarmade also gained an option to purchase two additional Hydro4Less retail operations, currently producing in excess of $20 million annually.

“Sugarmade is expecting to realize exceptional revenue growth this year from all of our hydroponic-related market sectors,” said Chan. “We are excited about having the very talented staff of Hydro4Less join the Sugarmade family of companies. We continue to seek additional acquisitions to further boost our already expected robust revenue growth rate.”

Expanding on a 2017 master marketing agreement with Bizright LLC where Sugarmade would sell its products, Sugarmade also announced that it will acquire Bzrth Inc., a sister company of Bizright. These accretive acquisitions will make Sugarmade one of the largest publicly traded hydroponic supply companies in the world.

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

Northern Neighbors Look to Capitalize

In its most expensive acquisition to date, Canadian based Tilray Inc. (NASDAQ: TLRY) announced that it has agreed to purchase Manitoba Harvest for $317 million in cash and stock to bolster its thrust into the U.S. CBD product market. Manitoba Harvest claims to be the world’s largest hemp food maker. With operations around the globe, Tilray now expects to launch CBD-derived products in the United States as early as this summer.

Less than a month after the signing of the 2018 Farm Bill, Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) announced plans to invest up to $150 million to establish its first U.S. production facility in New York state. The company plans to establish large-scale production capabilities focused on hemp extraction and product manufacturing. Canopy called its expansion into the United States “another example of the strategic advantage” last year’s $4 billion investment Constellation Brands provides the company.

Aphria (NYSE: APHA) (TSX: APHA) temporarily withdrew from the U.S. market while fighting off a $2 billion hostile takeover bid from U.S.-based Green Growth Brands. Aphria rejected the bid saying it was being undervalued. Located in the greenhouse capital of Canada, Aphria Inc. is one of world’s lowest cost producers.

With international production and distribution, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) is committed to building disruptive intellectual property by advancing research, technology and product development. The Cronos Group is building a global network with partnerships, joint ventures, production and distribution spreading across five continents. Cronos Group is intent on building an iconic brand portfolio around the globe.

Evaluating what has transpired and the projections of what is to come, the hemp markets and affiliated products and services appear to be sectors that could offer incredible returns. With multiple contracts in place, several acquisitions completed with more pending and planned, plus immense opportunity ahead, Sugarmade is hotly pursuing its mission to be a dominant player in the hydroponic supply industry piece of that pie.

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

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Mainstream Acceptance, Strong Growth Adds to Growing CBD Market

CannabisNewsWire Editorial Coverage: The CBD market is experiencing explosive growth as a result of growing mainstream acceptance and strong leadership.

The North American CBD market, worth more than $9 billion in 2017, is projected to be worth $47 billion by 2027.
Growth is possible partly through mainstream acceptance, with pressure on a variety of institutions to accept medical CBD.
Leaders are emerging within the CBD and cannabis markets, as leading voices gain recognition for their work.

Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile), which focuses on health and wellness products, is benefiting from this growth through the establishment of strong distribution deals. Several companies are responding to the growth by expanding operations. Canadian-based Tilray Inc. (NASDAQ: TLRY) is adding production capacity in both Canada and Europe. Aphria (NYSE: APHA) (TSX: APHA) is increasing its indoor grow operations. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is focusing its development efforts on projects in the United States. And Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) is using a significant outside investment to make strategic growth plans.

To view an infographic of this editorial, click here.

Growing Goodness

The CBD market has seen tremendous growth in the past few years, seemingly coming out of nowhere to become a billion-dollar industry. This eye-popping growth has been fueled in large part by CBD’s potential for health and well-being, an area that many researchers are focusing on. Companies have leapt upon the opportunity to offer consumers the benefits associated with cannabis without some of the other issues regularly linked with the drug, including getting users high.

If the past few years have been fruitful, the future looks even brighter for CBD. Soaring sales, growing acceptance within mainstream sports, and the recognized influence of some of the major players within the broader cannabis industry all point to positive movement forward for CBD. And as companies overcome the challenges offered by distributing a previously obscure product to a broad market, the industry looks set to soar.

A Rising Global Market

The growth of the CBD market has so far come mostly out of North America, where the likes of health and wellness company Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) have launched a variety of compelling CBD products. This geographical growth is rooted mostly in legal status, as CBD is extracted either from cannabis or from its nonhigh-inducing form hemp. Though legalization of cannabis remains variable in the United States, hemp is now legal at a national level in both the United States and Canada, with cannabis growth widely permitted.

As a result, the North American cannabis — including CBD — market, has grown in spectacular fashion. The market was worth $9.2 billion in 2017, and estimates project those numbers to reach $47.3 billion by 2027. Savvy companies, such as Wildflower Brands, are paying attention and taking action.

The European CBD market has seen less expansive growth. Within the EU, the range of processed products that can be made incorporating cannabis is more limited, and there’s been less of a concerted push towards legalization for both CBD and cannabis products. Consequently, market growth there has been less impressive.

But that may be about to change, according to analysis from market intelligence firm the Brightfield Group. The company recently predicted 400% growth in the European CBD market from 2018 to 2023, a massive rise in a short five-year span. It looks as if the CBD boom may be set to go global.

Sports and CBD

Cannabis prohibition isn’t the only thing shaping the CBD market. Society’s acceptance of cannabis and CBD cannot be overlooked as a contributing factor. The rules of entities not typically associated with cannabis have sometimes created obstacles to growth in the cannabis sector. But as the legal market develops, those institutions are shifting their attitudes as well.

The sports industry is an ideal illustration of this. During the war on drugs, many teams, leagues and professional organizations took a firm public stance against cannabis, laying down rules that prevented their players from indulging. The NFL, for example, has strict rules against cannabis consumption. Currently, however, former players are campaigning for a change to those rules, not just to allow players access to the same experiences as other people but to tackle issues specifically related to sports.

Recently, cannabis and CBD-infused products, including those such as Wildflower’s topical treatments, have provided a growing number of pain-treatment choices. Given the injuries so frequently seen in professional sports, pain management is crucial. Sports doctors, trainers, coaches and players are always on the lookout for the most effective treatment options. Currently the ban on cannabis and CBD restricts players from choosing such seemingly effective options, fueling the call for change.

Changes could also have a significant impact on the sponsorship side. Currently, only one professional sports team in the United States has a cannabis-related sponsorship, despite the growing wealth and influence of the industry. As barriers come down, the time may come for CBD, much like other recreational and medical products, to gain attention in the sport and beyond through sponsorship and supporter arrangements.

The Challenge of Delivery

This expansion doesn’t come without some challenges. As the market grows and evolves, CBD companies must find ways to distribute products to a sector that didn’t exist a decade ago. The infrastructure most other industries take for granted is being built from scratch.

Fortunately, the companies moving into this space are nimble and flexible, moving quickly to find solutions as they expand and grow. These solutions often include forming partnerships with other players within the cannabis sector to increase their combined reach. Wildflower has recently done this through a delivery fulfillment agreement with HelloMD, a leading digital healthcare platform for cannabis doctors, consumers and brands. The deal will allow Wildflower to potentially reach more customers through HelloMD’s expansive e-commerce platform.

Such moves should increase opportunities for CBD businesses to accelerate their expansion and reach a broader customer base, reversing years of prohibition. These partnerships may not only boost individual businesses but also add to the rising tide of CBD.

Cannabis Leaders Emerge

Celebrated leaders are starting to emerge at the head of the cannabis industry. Some have come from outside, their fame drawing attention to the industry. Others have come from within.

A recent list of the top 100 figures in the industry includes actor Jim Belushi, former Mexican president Vicente Fox and retired boxer Mike Tyson. The list also includes cannabis executives such as Terry Booth of Aurora and Elizabeth Hogan of GCH.

Wildflower Brands CEO William MacLean was included in the list, thanks to his hands-on approach to sales and marketing. His extensive travels to hospitals in North America have also given him insight into patient experience and the benefits that cannabis and CBD can offer. Combined with years of marketing experience, this impressive background puts MacLean in a strong position to market his brand and build teams of skilled experts for ongoing growth.

Cannabis Companies Reach New Highs

As the cannabis sector expands, many companies are going through periods of growth and rising revenues. Over the past few years, this rocketing trajectory has allowed the cannabis sector to diversify in interesting ways.

Based in Canada, Tilray Inc. (NASDAQ: TLRY) is looking to expand through acquisitions. The company recently acquired the largest hemp foods company in the world — Manitoba Harvest — to strengthen its foothold in the exploding hemp market. The company is also making other strategic growth and development moves, including moving into Europe.

Aphria (NYSE: APHA) (TSX: APHA) recently received a license amendment to expand its growing space. Headquartered in Leamington, Ontario, Aphria is working to set the standard for the low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible. Aphria is committed to bringing breakthrough innovation to the global cannabis market and has a presence in more than 10 countries across 5 continents.

One of the large Canadian cannabis companies, Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is looking to expand in the United States following the passing of the 2018 farm bill. Canopy is building a hemp-production facility in New York state and acquired hemp enterprise AgriNextUSA, moves that position the company to make the most of America’s swing towards hemp and become a leading player as the market heats up across North America. Canopy Growth boasts 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 Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) recently closed a deal with outside company Altria, providing that company with a way into the hemp space. The C$2.4 billion strategic growth investment will provide Cronos with essential resources to expand during its critical phase of market growth in the United States.

With scientific and business innovation being led by a raft of far-sighted and innovative pioneers, the cannabis and CBD industries look set for another decade of incredible growth.

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

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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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CBD Beverages – Possible Next Big Disruptor in the Drinks Industry

CannabisNewsWire Editorial Coverage: Drinks infused with cannabis-derived cannabidiol (CBD) are in a prime position to bring disruption to the beverage sector.

The growing consumer interest in hemp-derived CBD as a health supplement along with the recent passing of the Farm Bill has spawned a growing interest in CBD-infused drinks.
The ever-increasing global trend to legalizing cannabis is also creating demand for “harder” beverages derived from marijuana
Big alcohol companies have taken a particular interest in investing in cannabis producers.
The relationship is also working in an inverse direction, with CBD producers recruiting experienced beverage executives to help launch new products.

Corporate interest in building a cannabis-infused beverage profile demonstrates the level of potential growth for such an industry, with key developments being made across multiple channels. To address the needs of the wellness-oriented consumer, Phivida Holdings Inc. (CSE: VIDA) (OTCQX: PHVAF) (PHVAF Profile) has created a line of active hemp extract (CBD)-infused drinks that are just starting to hit store shelves and is expected to be distributed to a thousand retail outlets in Q2. In the adult beverage sector, Constellation Brands Inc. (NYSE: STZ) has made a $4 billion investment in Canopy Growth Corp. (NYSE: CGC) (TSX: WEED), fueling research into cannabis drinks which suggests a proactive approach to addressing the potential sales impact in markets where consumer use of marijuana is legal. The Canadian business unit of Molson Coors Brewing Company (NYSE: TAP) has also made a deal with a cannabis producer to create beverages for that market. In the health supplements sector, Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB), which markets hemp-derived CBD oil, has recruited a former Coca-Cola executive to bring beverage sector expertise into the company.

To view an infographic of this editorial, click here.

The Changing Beverage Space

Beverages are among the most trend-driven of all food industry products with continuing innovations in packaging, flavors and formulations being made to drive consumer interest. Decades ago, store shelves consisted of a few cola and fruit-flavored drinks. Since then, there have been introductions of enhanced fruit juices, bottled iced teas and more recently energy drinks, which created an entirely new drink category. Consumer tastes have grown considerably as well, especially when considering the popularity of the fermented tea drink kombucha.

Now a fresh wave of innovation is on the cusp of altering the beverage industry. The growing interest in hemp-derived CBD as a health supplement along with the legalization of marijuana for medical and recreational use in several jurisdictions has led manufacturers to explore new products and expand their consumer base. This has led to the creation of a new product category — CBD-infused beverages.

The Rise of CBD Beverages

Few companies currently have a strong focus on CBD drinks. However, among those looking to take advantage of this market is Phivida Holdings Inc. (CSE: VIDA) (OTC: PHVAF). Through its Oki brand of active-hemp, extract-infused waters and iced teas, Phivida is targeting health-conscious consumers who are looking for newer ways to enhance their well-being. Backed by its own market research, Phivida expects that introducing an attractive beverage formulated with the flavors and features most desired by this segment will have strong market acceptance.

Driving the growth of this new segment is the rocketing popularity of CBD as a health supplement. One of the many active ingredients in cannabis, CBD doesn’t produce a high in users, unlike cannabis’ more famous constituent, THC. While research into CBD is in its early stages, consumers are increasingly looking for products containing CBD to address a variety of health issues such as anxiety, pain, and immune health. This has been aided by the passing of the Farm Bill in December 2018 which legalized hemp — defined as a variety of the cannabis plant that contains less than 0.3 percent THC — and allows its production and sale in all 50 states. For companies such as Phivida, which process the hemp plant into their products, this has provided them with a significantly large market to grow into.

Launching into the CBD-infused Drink Market

Chances are that, within a decade, every store may have a CBD-infused drinks section. But currently, companies are entering new territory and strategizing the best steps that will lead to success.

A critical step some are taking is to reach into the established beverage industry to tap into seasoned expertise and leverage previous success. For example, hemp-derived CBD supplement producer Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) recently recruited former Coca-Cola executive Eugenio Mendez as its chief growth officer. The company has stated its strategy is to expand into new segments, and Mendez could provide vital experience for a move into beverages.

For Phivida, that process also started with finding the right people to manage the project. Last March, Jim Bailey and Mike Cornwell stepped in as new management at the company. Veteran executives from Red Bull, they brought with them large beverage company expertise in product formulation, package design, product distribution and marketing. Coming from the last company to truly innovate and trigger a widespread disruption in the beverage industry, the two executives look well-equipped to repeat that achievement at Phivida.

Another key step is designing a beverage that will have the most consumer appeal. To align with the sentiments of their target consumers, Phivida’s Oki brand flavored waters and iced teas contain non-GMO, natural and organic ingredients; are plant based and vegan friendly; and are packaged in sleek 100 percent recyclable glass containers. The flavor line-up, which includes Watermelon Relax and Lemon Ginger Harmony, are aligned with the current preferences of the health-conscious consumer. Phivida’s surveys have resulted in product testing scores as high as 80 percent from its sample group of 1,200 individuals for its OKI beverage.

The new leadership team has also put in significant effort to ensure that Oki has the distribution channels necessary to reach consumers. Company officials have been working with one of the nation’s largest grocery distributors and meeting with both national and regional chains to secure retail contracts. Several retail contracts are in development, and Phivida expects Oki to be available in more than 1,000 outlets by the second quarter of this year.

Beer Makes Its Cannabis Move

So far, one of the most significant moves by the beverage industry into cannabis has been made by Constellation Brands Inc. (NYSE: STZ). The company behind brands such as Corona beer and Svedka vodka has taken an active interest in the cannabis sector. Through two rounds of investment over the past two years, Constellation has provided $4 billion to Canopy Growth Corp. (NYSE: CGC) (TSX: WEED), one of Canada’s largest and most successful cannabis companies. This investment provides Constellation with one-third ownership of Canopy Growth and the potential to take that investment further.

Unsurprisingly, there has been a lot of speculation about how this money will be spent. Canopy Growth has been using its increased financial clout to expand its business from Canada into the United States. Canopy is establishing a production facility in New York State that, for now at least, will produce industrial hemp from which CBD can be extracted.

In another team-up between a brewer and a Canadian cannabis company, Molson Coors Brewing Company (NYSE: TAP) announced last summer that its Canadian arm would be working with the Hydropothecary Corporation on a joint partnership to produce cannabis-infused drinks in anticipation of the expansion of that country’s cannabis legalization. Cannabis beverages and edibles are expected to be made available by October 2019, and Molson will be positioned to serve that new sector once it is made legal.

The market for both CBD- and THC-based cannabis drinks has barely begun to take shape, but given the dramatic growth in the popularity of cannabis, it could become a major disruptor for the beverage industry over the next few years.

For more information on Phivida Holdings, visit Phivida Holdings Inc. (CSE: VIDA) (OTCQX: PHVAF)

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