Cannabis Sales Surge During Lock Down

CannabisNewsWire Editorial Coverage: COVID-19 devastated the economy but created a surge in cannabis sales, bolstering long-term trends.

As the pandemic wreaked havoc on the U.S. and global economies, cannabis sales rocketed higher across multiple markets in North America. California cannabis sales soared nearly 160% compared to the same day in March 2019, while sales in Washington climbed 100% and Colorado saw a 46% increase on the same day. This surge gives no indications as a one off and is strong reinforcement of long-term trends in the industry. After a lot of early hype, the cannabis sector is on firm ground and is posting impressive numbers. A strong performer in the sector, Cannabis Strategic Ventures (OTCQB: NUGS) (NUGS Profile), is now on pace for over $2.7 million in quarterly sales and approximately $11 million in annualized sales, based on its strong performance in April and May. Simultaneously, the company increased its harvest size by as much as 2.5x and is now selling product at an 11% premium to industry standard. Powerful new deals confirm sector viability and vitality. Village Farms International Inc. (NASDAQ: VFF), one of North America’s largest vertically integrated greenhouse growers, recently launched a majority-owned joint venture for a large-scale, low-cost, high-quality cannabis production. HEXO Corp. (NYSE: HEXO), an established consumer packaged goods cannabis company, just closed a public offering for total gross proceeds of C$57,546,000. Amyris Inc. (NASDAQ: AMRS), a global science and technology leader of pure, sustainable ingredients for consumer products, just announced a major breakthrough in CBD delivery, improving efficacy of CBD by 10-40X as the carrier oil chassis for the skin care market. Tilray Inc. (NASDAQ: TLRY) a global leader in cannabis research, cultivation, processing, and distribution announced a C$90.4 million registered offering. The surge in cannabis sales during lockdown only adds to a sector that is thriving.

Click here to view the custom infographic of the Cannabis Strategic Ventures (OTCQB: NUGS) editorial.

Pandemic’s Unexpected Windfalls

COVID-19 has had a crippling effect on many industries. Shops and restaurants forced to close, manufacturers unable to operate their plants, companies across the manufacturing and service sectors seeing demand plummet. The layoffs and losses are very real, and no one knows yet what the long-term economic impact will be.

But some businesses actually benefited from the economic disruption the pandemic has wrought. There are obvious ones like pharmaceutical companies and those producing protective equipment for medical staff. There are the tech businesses that facilitate working from home, providing software for virtual workspaces and online meetings. And there has been a huge increased demand for home entertainment, which has spilled over into a less obvious sector – cannabis producers such as Cannabis Strategic Ventures (OTCQB: NUGS) (NUGS Profile).

COVID Lends Cannabis a Lift

Cannabis was already a boom industry in North America. This has been driven by a range of recent changes, such as recreational legalization in Canada, federal legalization of hemp in the US, and the repeal of prohibition across a growing number of states. This has allowed the growth of companies such as Cannabis Strategic Ventures, which cater to a growing market as customers move from criminal supply channels to legal ones.

Demand exploded during the early stages of COVID-19’s spread through North America. According to the Bank of America Securities, there were record sales of cannabis as consumers stockpiled, preparing for a lockdown. While some people bought mountains of toilet paper or tinned food, both medical and recreational cannabis users were making sure they had enough to see them through a crisis.

The result was a spike in sales in April and May, to the benefit of companies with recognizable quality brands such as Cannabis Strategic Ventures. Sales could have been stymied as states locked down and restricted business to control the spread of COVID-19. But most states classified cannabis as an essential product, allowing sales to continue even as other parts of the economy were shutting down.

Together, these factors led to record sales for some cannabis companies, with Cannabis Strategic Ventures celebrating increased sales of cannabis product from its core cultivation facility and adding staff to address the rising demand.

Strong Contender Seizes Market Opportunity

These sales marked an extraordinary month for NUGS. Despite restrictions on business due to COVID-19, the company had record-breaking sales in the final week of April, putting monthly sales 800% higher than the monthly average for Q1.

Any fears that this might be a blip caused by panic buying at the start of the pandemic vanished the following month, when the company announced sales from its most recent harvest. With cannabis sales in the US average roughly $1,525 per pound, the company sold its product at around $1,700 per pound, 11% above benchmark levels. This was a particularly impressive price given that it had been selling at a discount relative to the benchmark only six months before.

Of course, not all cannabis companies will benefit from the crisis. Their ability to profit depends in large part on the strength of their existing business. NUGS had been building up its business prior to the crisis, with the addition of a six-acre cultivation site in 2019, capable of four or five harvests per year.

Seizing the market opportunity brought by COVID-19, the company has announced further improvements in the first half of 2020. Work on both the quantity and the quality of output has more than doubled the output of cultivation facilities while supporting rising prices for its products.

Cannabis Industry Evolves

The long-term expansion of legal markets has led to dramatic growth for cannabis companies over the past decade, and the COVID-19-related influx of revenues provides well-run businesses the resources they need for further expansion. Late April and early May saw Cannabis Strategic Ventures sell out its entire stock every week for a month.

“We have never seen anything like this,” said Cannabis Strategic Ventures CEO Simon Yu. “We booked $100,000 in one day to clear out all of our remaining inventory. We anticipated this dynamic but still underestimated the force of the trend. Too much demand is always the problem you want to have.”

NUGS sold $929,000 of cannabis products in May and expects to see even greater sales in June. Expanded inventory and product range have supported this growth even in a time of crisis, while reinvestment from that growth will let the company further expand its capacity.

Part of the sector’s success comes from producing a varied range of brands and products. Rather than just selling weed, the more successful companies have been developing a variety of cannabis derivatives for different markets. While the recent boom in sales has come from demand for cannabis itself, related brands have diverse interests in supporting long-term growth of the market, normalizing cannabis and its derivatives as consumer products, and protecting companies against a disruption in any individual part of the market.

Cannabis Players Execute on Varied Strategies

The boom in sales brought about by the COVID-19 crisis has created an opportunity for a range of growing companies.

Village Farms International Inc. (NASDAQ: VFF) is one of the largest and longest-operating vertically integrated greenhouse growers in North America. The company announced that its majority-owned joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms, has received from Health Canada its cannabis cultivation sales license based on an initial production area within its second 1.1 million square foot greenhouse facility in Delta, British Columbia.

HEXO Corp. (NYSE: HEXO) is an award-winning consumer packaged goods cannabis company that creates and distributes innovative products to serve the global cannabis market. The company serves the Canadian adult-use markets under its HEXO Cannabis and Up Cannabis brands, and the medical market under HEXO medical cannabis. The company recently closed a public offering for total gross proceeds to the company of C$57,546,000.

Amyris Inc. (NASDAQ: AMRS) is a global science and technology leader of pure, sustainable ingredients for the Health & Wellness, Clean Beauty and Flavors & Fragrances markets. The company recently presented clinical data showcasing the superiority of its natural sugarcane squalane (marketed and sold as Neossance Squalane) as a carrier of CBD versus other oils. In order for CBD to be effective in topical applications, skin penetration is a key factor. Amyris sugarcane squalane improves the efficacy of CBD by 10-40X as the carrier oil chassis for the skin care market based on new data.

Tilray Inc. (NASDAQ: TLRY) is a global leader in cannabis research, cultivation, processing and distribution. An industry pioneer, Tilray was the first GMP-certified medical cannabis producer to supply cannabis flower and extract products to tens of thousands of patients, physicians, pharmacies, hospitals, governments, and researchers on five continents.

COVID-19 devastated the global economy but spurred a revenue spike in the cannabis industry, substantiating the opportunity in an already rapidly expanding sector.

For more information on Cannabis Strategic Ventures, please visit Cannabis Strategic Ventures (OTCQB: NUGS)

About CannabisNewsWire

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CannabisNewsAudio – Sproutly Canada, Inc. (CSE: SPR) (OTCQB: SRUTF) (FRA: 38G) Focuses on Innovative Methods of Cannabis Consumption

Related Editorial
A desire to move away from smoking may be fueling growth in the edible cannabis products.

Sproutly Canada Inc. (CSE: SPR) (OTCQB: SRUTF) (FSE: 38G) (SRUTF Profile) is developing new technology to manufacture cannabis edibles and to accurately measure their active ingredients. Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) (LXRP Profile) has created a bold new technology to make cannabis’ active ingredients more palatable and absorbable. BevCanna Enterprises Inc. (CSE: BEV) (OTC: BVNNF) is producing white-label products, giving other brands access to the market. HEXO Corp. (TSX: HEXO) (NYSE: HEXO) is meeting its regulatory needs by acquiring other licensed cannabis producers and processors. Valens GroWorks Corp. (TSX.V: VGW) (OTCQX: VGWCF) has created a large and growing extraction and testing facility.

To hear the CannabisNewsAudio version, visit http://cnw.fm/TDyO4

To view the full editorial, visit http://cnw.fm/rjxQ6

About Sproutly Canada, Inc.

Sproutly is a vertically integrated cannabis products company, powered by proprietary technology and licensed to cultivate and manufacture cannabis derived products under the Cannabis Act. Utilizing the proprietary APP Technology, the company is able to produce Infuz2O, the first naturally water-soluble cannabinoids in water solutions, and Bio-Natural Oil, a natural strain-specific cannabis oil. Sproutly’s indoor cultivation and processing facility is strategically located in Greater Toronto Area. The facility is designed to produce high-quality cannabis and house the initial APP Technology extraction operations. The company’s mission is to advance the cannabis beverage and edibles market and become a leader in the category with its breakthrough products, in-house brand portfolio and partnerships with leading established consumer product brands. For more information, visit the company’s website at www.Sproutly.ca.

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

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Technological Innovation Pushes Bounds of Edible Cannabis Market

CannabisNewsWire Editorial Coverage: A desire to move away from smoking may be fueling growth in the edible cannabis products.

Cannabis in food and drink offers both health and social advantages over smoking.
The market’s growth depends upon meeting the standards of regulators.
Market growth is driving innovation not just in the production of edible cannabis but also in the technology to measure contents.

To view an infographic of this editorial, click here.

Expanding the Bounds of Cannabis

As the legal boundaries of the North American cannabis industry expand, businesses are looking for ways to make the most of their products and reach the widest possible market. This quest has led to a growing shift in focus away from smoking, which is accompanied by significant health concerns and social challenges. Instead, companies are increasingly focused on alternatives such as edible cannabis products.

The growing demand presents challenges. One of the most obvious is developing the technology to effectively extract the active ingredients in cannabis and incorporate them into foods, drinks, vaping oils and other products. In addition, meeting regulatory standards is also a factor, as authorities move to set standards for a newly legalized industry. Meeting such standards means improving control over products, which in turn means improving measurement systems. And that means developing the technology to do the measuring.

The Advantages of Edible Cannabis

Edibles are quickly becoming an important focus for the cannabis market. Some companies are offering edibles, including beverages, as part of a wider product line, creating cannabis-infused drinks alongside wider beverage lines or more diverse cannabis products. Other companies have narrowed their focus to either cannabis edibles or cannabis-infused drinks. For Sproutly Canada Inc. (CSE: SPR) (OTCQB: SRUTF) (FSE: 38G), the focus is on supplying water-soluble cannabis solutions and bionatural oils to be used in the beverages and consumables market.

The shift toward edibles is a direct response to the decrease in smoking. Cannabis legalization has arrived just as tobacco smoking is seeing a steep decline. Both the percentage of people who smoke and the number of cigarettes they consume each day are going down. Many people who are interested in cannabis, whether for medical or recreational reasons, don’t want to take up smoking. If the cannabis industry is to grow, it appears the most effective way may be to find other ways to reach these potential consumers.

Beverages may be one of the most promising ways to replace smoking as the leading form of cannabis consumption; this trend should provide growing business opportunities for companies such as Sproutly. Cannabis-infused beverages allow consumers to choose between alcohol and cannabis on a night out, with users of each able to enjoy the same social setting together.

The downside of this choice is that ingested cannabis typically takes longer to kick in than either alcohol or smoking, disrupting the social dynamic. Sproutly is working to solve this problem with its innovative Infuz2O technology, which provides faster delivery of the active ingredients in ingested cannabis. For both medical users looking for fast relief and recreational users looking to keep pace with their companions, it’s a potentially valuable step.

Cannabis Regulation and Measurement

Cannabis edibles don’t automatically become legal just because cannabis itself has. For example, a delay was written into Canada’s legalization legislation to give time to prepare regulations for ingestible cannabis products such as those Sproutly supports.

These regulations, like those around smokable cannabis, are created with good reason. Governments need to be able to establish standards for recreational drugs to minimize the risk of harm both to consumers and to others who may be affected by those consuming the products.

One form of regulation that appears certain to make its way from alcohol to cannabis is the need to measure and state the strength of consumer products. Two decades of development mean that the methods for these measurements are fairly well established for smokable cannabis, but ingestible cannabis products raise new challenges — ones that Sproutly subsidiary Infusion Biosciences Inc. is addressing.

The methods currently used for the detection and quantitation of cannabinoids were designed for isolated oils. That means they are unable to accurately and reliably measure cannabinoid contents in finished edible and beverage products, which are significantly more complicated. But under the leadership of Sproutly’s chief science officer, Dr. Arup Sen, Infusion Biosciences has developed analytical methods that measure the cannabinoid molecules in water-soluble and oil preparations created using Sproutly’s APP technology. This development marks a significant step toward accurately testing and labeling the content of cannabis ingestibles.

“The ability to test for cannabinoids in water formulations has been unreliable for cannabis beverages globally due to the existing testing standards and practices,” said Sen. “With ever-increasing food-safety standards that need to be met for cannabis beverage and edible products, the completion of our research and the Developed Analytics are significant milestones in the commercialization of APP Technology; this is another step forward towards reliable and accurate testing for ingestible cannabis products.”

Innovating on All Levels

To successfully develop the market for ingestibles, cannabis companies need to be innovating on every level, from the extraction of active ingredients to their measurement, to the recipes for active foods and drinks. Even the way that cannabis is marketed is going to change as its place in people’s lives changes.

Although it’s unlikely that any company will attack this from every angle, it’s a good sign for the market that so many are taking on multiple interlinked issues at once. This is visible in Sproutly’s approach, with the creation of new technology to both create and measure ingestibles.

Infuz2O is the centerpiece of Sproutly’s work. A water-soluble cannabis liquid that moves away from the need for emulsification or encapsulation, Infuz2O allows the delivery of a precisely measured dose of active ingredients from cannabis in an odorless and easy-to-handle form. The effects of the cannabis are felt within five minutes and wear off within 90 minutes, bringing the experience closer to that of alcohol. This delivery method could make it easier to manage for consumers who are new to cannabis or who want to consume their drinks alongside alcohol drinkers, both important pieces for the beverage market.

By developing Infuz2O alongside its testing technology, Sproutly has given itself a way to test the reliability of its product as well as a product to test the measurements on. The move appears to be both a logical and efficient strategy.

Beyond Weed

Cannabis is moving beyond its old image, where “weed” was a fitting label for something that spread where it wasn’t permitted — something primitively grown and furtively consumed. A plethora of companies are now working to develop sophisticated products for a more sophisticated — and legal — market.

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) is another innovator in the field of delivery methods. The company’s DehydraTECH(TM) technology uses fatty acids to make cannabinoids both more palatable and easier for the body to absorb. This increases the efficiency of cannabis products as well as removing a challenge to the flavor of ingestibles. Like Sproutly, LXRP is working in close cooperation with the authorities to improve the measurement and understanding of cannabinoids through groundbreaking research with the National Research Council of Canada.

BevCanna Enterprises Inc. (CSE: BEV) (OTC: BVNNF) is innovating within the industry by importing a business model that has seen little use in cannabis — white-label products. BevCanna researches, packages and produces cannabis-infused beverages to appear under the branding of other companies. The approach keeps the company itself out of the public eye while allowing its clients easy access to this new market without having to develop extensive in-house expertise.

Licensing is an essential part of the cannabis regulatory process. Consequently, companies are moving to acquire more licenses to produce and sell cannabinoids. Some are doing this primarily through their own applications, but others, such as HEXO Corp. (TSX: HEXO) (NYSE: HEXO), have been using acquisitions to build up its businesses. A medical cannabis provider that entered the recreational market last year, HEXO has acquired Newstrike, the parent company of Up Cannabis Inc., a licensed producer and distributor. This acquisition should give HEXO a bigger footprint within the profitable Canadian cannabis market, where unmet demand continues to offer great profit potential.

As a growing number of farmers start cultivating cannabis, somebody needs to provide the extraction and testing services to turn the crops into ingredients for ingestibles. Valens GroWorks Corp. (TSX.V: VGW) (OTCQX: VGWCF) provides extraction and testing services. The company uses a variety of extraction methods to obtain the active ingredients from cannabis crops, producing extracts ideally suited for the products they will be used in. This summer, Valens announced that its extraction capacity had reached 425,000 kg per year, with plans to reach more than a million kilograms.

As the cannabis market shifts towards edible products, extraction and testing work, along with the innovative technology driving it, may become a linchpin of the cannabis economy.

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

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

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

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

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

To view an infographic of this editorial, click here.

Partnerships Key to CBD Growth

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

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

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

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

Welcoming the CBD Retail Revolution

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

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

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

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

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

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

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

Developments in the CBD Upswing

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

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

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

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

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

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

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

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

About CannabisNewsWire

CannabisNewsWire (CNW) is an information service that provides (1) access to our news aggregation and syndication servers, (2) CannabisNewsBreaks that summarize corporate news and information, (3) enhanced press release services, (4) social media distribution and optimization services, and (5) a full array of corporate communication solutions. As a multifaceted financial news and content distribution company with an extensive team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. CNW has an ever-growing distribution network of more than 5,000 key syndication outlets across the country. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled visibility, recognition and brand awareness. CNW is where news, content and information converge.

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Acquisitions Reveal the Steadily Changing Shape of the Cannabis Sector

CannabisNewsWire Editorial Coverage: The cannabis sector continues its steady shift toward big business, big money and a focus on the value add of immaterial assets.

TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) (TCAN Profile) has made several key acquisitions, creating a large operation with various licenses and recognized brands. HEXO Corp. (TSX: HEXO) (NYSE American: HEXO) has taken a similar path with the acquisition of Newstrike. Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) is building a positive public profile through releasing educational tools. Aphria Inc. (TSX: APHA) (NYSE: APHA) has expanded the hunt for cultivation licenses to Germany. Meanwhile, companies such as Charlotte’s Web Holdings Inc. (TSX: CWEB) (OTCQX: CWBHF) keep releasing new products into the market.

Cannabis companies are increasingly engaging in multimillion-dollar acquisitions.
These support a consolidation of the industry as it moves from scattered creativity to efficient large businesses.
The trend built in part on intangible assets, including brands and licenses.

To view an infographic of this editorial, click here.

A Very Different Business

The image of the cannabis industry varies hugely depending upon one’s point of view. To proponents, the market is a radical and transformative sector that’s bringing the world together. For opponents, it is one more vice threatening public morals. For many in the middle ground, it’s a space where hippies and stoners can thrive, though not one that encourages the buzz and dynamism of mainstream business.

In reality, the cannabis sector fits none of these images. The industry is emerging from its early, tentative steps into legality to become a significant business sector much like any other, with all the apparatus of modern capitalism and a focus on intangible assets such as intellectual property. All of this is reflected in the sector’s recent burst of mergers and acquisitions.

Big Money Deals

The most eye-catching aspect of mergers and acquisitions in the cannabis sector is the amount of money that goes into them. Take just two recent examples from a single company, TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8). In the past few months, the Vancouver-based cannabis company has made announcements on two major deals. First came the acquisition of a 196,000-square-foot vertically integrated cannabis facility for a total purchase price of $15 million. Then came a letter of intent relating to Californian company Lyfted Farms outlining TransCanna’s plans to acquire Lyfted’s business and assets for $5.5 million.

By the standards of some businesses, these might not seem like huge deals. But when a company is investing $20 million on expansion in the space of a couple of months, that certainly says something. That TransCanna can make these deals is a show not only of the strength of the company but also the strength of the industry.

The idea that there’s a lot of money in cannabis might not be surprising to anyone who’s seen TV depictions of the drug trade. Dramas such as Narcos show a world of high earners with big stacks of cash. But as sociologists such as Sudhir Venkatesh have shown, the reality for most people working in the illegal drug trade is vastly different. They earn less than minimum wage in jobs that are dangerous and uncertain.

The financial growth of the legal cannabis industry has therefore been a positive move for everyone from company leaders to their lowest-paid employees. The legalized trade is pulling money out of the black-market economy and allowing those at the top to earn big bucks while also providing employees with a decent wage. Far from weakening the power of legal providers, paying employees properly is leaving them with enough money to go around buying up competitors, as TransCanna is doing.

Success has also brought funds from outside. From private individuals to big alcohol and tobacco companies, investors are pouring money into pot, allowing businesses to expand while keeping their employees happy. There are living wages at the bottom and big money at the top.

Tidying Up the Market

The growth of the legal cannabis industry started with a scattershot approach. TransCanna is just one of many companies that have grown into the market from relatively small beginnings. Some began with entrepreneurs seeing a new industry within which to operate. Others were experienced cannabis cultivators moving from the illegal to the legal market. Still others were pharmaceutical companies dipping their toes into a new medicine and, from there, into the recreational industry.

As a result, the cannabis industry is cluttered with diverse and disconnected businesses. But now it’s moving on from this scatter-gun approach to a period of consolidation.

This doesn’t mean that the variety created in that early surge is being lost. When larger companies buy up smaller ones, it’s often with the aim of continuing the individual brands and styles the smaller companies have created. For example, TransCanna has announced the acquisition of GoodFellas, which will allow it to take control of the Daily Cannabis Goods brand. TransCanna CEO Jim Pakulis has talked not in terms of absorbing the Daily brand into TransCanna’s existing identity but in terms of maintaining Daily and expanding its sales.

The consolidation of multiple brands and businesses into a smaller number reflects a dialectic process that’s common in new business areas. First comes a burst of creativity. With few precedents and no big players dominating the market, entrepreneurs and creatives have free rein. Some of their experiments fail, but the ones that succeed get consumers interested and fill the market with ideas.

While this creates plenty of exciting idea and products, it’s also inefficient. In the phase that follows, bigger companies step in or emerge from among the smaller ones. Consolidation creates efficiency, providing more reliable products for consumers and better value for companies.

The contrasting approaches of small innovative companies and larger efficient ones together create excellent value. That’s the point the cannabis industry is now approaching and that TranCanna’s acquisitions are a part of.

The Power of the Immaterial

In the illegal market, all that mattered for cannabis sellers was the product. But in the legal market, things work differently. When a company can use the full apparatus of marketing, intangible assets such as intellectual property become important. That’s why GoodFellas is valuable to a company such as TransCanna — not just for its cannabis but for the Daily brand that’s attached to it.

And while intangible assets are normally talked about in terms of brand and IP, there’s another sort of asset that gets much less publicity and that the cannabis industry is bringing to investors’ attention: legal licenses.

Licenses of various sorts are important for a wide range of industries, from food production to mining. But they have a particular prominence in the cannabis industry because tight regulation has created a scarcity of licenses. When TransCanna subsidiary TCM Distribution Inc. gained cannabis manufacturing and distribution permits from the City of Adelanto, California, it was an important step in the company’s growth within the state. And when a deal like TransCanna’s acquisition of Lyfted is announced, the target’s cannabis licenses are often mentioned. These licenses are a crucial asset and one that investors are concerned about. Without the licenses, the business can’t function.

The prominence of licenses is a new feature of investment for those going into cannabis. But it could be a feature that helps investors recognize these assets in other companies. Cannabis companies are increasingly about immaterial assets, and immaterial assets are increasingly about licenses as well as IP.

Keeping Profiles High

In such an atmosphere, cannabis companies are working hard on keeping their profiles high while building up their portfolios of products.

Canadian cannabis company HEXO Corp. (TSX: HEXO) (NYSE American: HEXO) has, like TransCanna, been using acquisitions to build up its business. Originally a medical cannabis provider, HEXO joined the recreational market when Canada changed its laws last year. Since then, it has completed an acquisition of Newstrike, the parent company of Up Cannabis Inc, a licensed producer and distributor. It’s a deal that fits with the importance of immaterial assets. Licensing is important in Canada, both for production and distribution, and acquiring a company that is already licensed is the easiest way to expand a company’s footprint in the country.

Good publicity is another of the intangible assets that come with a good company, and few have achieved more publicity within the sector than Canopy Growth Corporation (TSX: WEED) (NYSE: CGC). When the company received a multibillion-dollar investment from Constellation Brands, it was the first time the sector had received such a big input of cash from outside, so the move drew substantial attention. Now the company is raising its profile in a different way, demonstrating its responsible attitude through the release of digital cannabis education tools.

Aphria Inc. (TSX: APHA) (NYSE: APHA) has taken the hunt for intangible assets global, with the acquisition of five cultivation licenses in Germany. With the North American cannabis industry increasingly well established, Europe is the next big frontier, and Aphria is racing in ahead of many of its competitors.

All this work on intangibles would be useless without physical products to go with it, and product innovation continues at a high pace. Charlotte’s Web Holdings Inc. (TSX: CWEB) (OTCQX: CWBHF) has recently announced the release of hemp-extract CBD gummies designed help with calm and sleep. CBD products are an increasingly important subsector of the market, and products of this kind have potentially wide reach.

The cannabis industry is changing, with big money, consolidation and growing intangible assets, but it remains grounded in a strong consumer desire for cannabis.

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

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Hunt for Perfect Acquisitions Reshapes Cannabis Industry

CannabisNewsWire Editorial Coverage: Cannabis companies are using increasingly refined acquisition tactics to create vertical integration.

TransCanna Holdings Inc. (CSE: TCAN) (XETR: TH8) (TCAN Profile) has developed a refined acquisition strategy, assessing more than one hundred targets before settling on a select few to acquire. Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF), one of America’s leading multistate cannabis companies, has recently announced its agreement to acquire CannaRoyalty Corp. (OTCQX: ORHOF), giving it control over a vast distribution platform. In Canada, HEXO Corp. (TSX: HEXO) (NYSE American: HEXO) has been given approval to acquire Newstrike, as the country’s vibrant industry consolidates following recent dramatic growth. For those without vertical integration, companies such as DionyMed Brands Inc. (CSE: DYME) (OTCQB: DYMEF) provide vital support services, including logistics and distribution.

The cannabis industry is worth tens of billions of dollars and expected to reach more than $146 billion by 2025.
Legal and social changes mean that companies are working to tap into larger consumer bases.
Acquisitions create opportunities for integration and efficiency.

To view an infographic of this editorial, click here.

Cannabis Consolidation

The cannabis industry is going through a period of transformation. As more jurisdictions around the world legalize some form of products — whether it’s recreational cannabis, medical cannabis or CBD — the market is seeing explosive growth. Global spending on legal cannabis, which was worth $14.3 billion in 2016, has been predicted to reach $146.4 billion by the end of 2025. This means big profits and big growth for leading cannabis companies, which a decade ago looked like strange novelties to wary investors.

The growth of the industry and in particular some bigger players has led to a period of consolidation. Smaller firms are being swallowed up by their larger competitors as business leaders and investors seek economies of scale, greater brand reach and the higher profits these can bring. From an industry defined by small-scale production and experimentation, cannabis is turning into one of big brands powered by mergers and acquisitions.

Getting Acquisition Right

For those involved in the cannabis industry, it’s easy to get sucked into a gold-rush mind-set. The slightest whiff of marijuana promises fat profits, and every company with a leaf logo looks like a sure thing. But as in any sector, one can find both good and bad options for purchase and investment. For companies set on a strategy of mergers and acquisitions, such as TransCanna Holdings Inc. (CSE: TCAN) (XETR: TH8), it’s just as important to be smart as it is to be buying.

Having performed a successful IPO on January 9, 2019, TransCanna is still a relatively new player in the market — but one that appears to be well positioned to make the most of both big markets and industry expertise. Headquartered in Canada, the only G7 country to have nationally legalized recreational cannabis, TransCanna has access to the talent pool and wealth of expertise that Canada has developed. The company has developed a two-year, four-phase plan aimed at developing proprietary brands and creating a self-contained ecosystem that ensure reliability, consistency, quality and scale.

At present, the cannabis industry is in turmoil. Production, branding and distribution are often carried out separately or by small companies, each reaching a fraction of their potential market. TransCanna’s strategy is built around using vertical integration to create a closed-loop cannabis ecosystem, one which more efficiently taps into this exciting market.

To create this integrated system, the company recently purchased a 196,000-square-foot vertically integrated, cannabis-focused facility, which recently went through an $8-million renovation. In addition, the acquisition included five additional acres adjacent to the facility. Once required licenses are in place and the facility is operational, TransCanna will have the following divisions: nursery, cultivation, manufacturing, bottling, extraction and distribution. The facility is also designed to allow up to 10,000 square feet for a third-party, laboratory-testing company to lease space.

Strict Vetting

Over the past 18 months, TransCanna has evaluated more than 100 Californian companies with an eye to acquisition. Strict vetting has whittled these options down to a handful of qualified deals, which TransCanna’s leadership team is pursuing. The company’s evaluation process is deliberate and selective, with an eye to ensuring that every addition plays an essential part in TransCanna’s long-term strategy.

It appears the company’s extreme due diligence on each potential transaction is paying off. In the past 30 days, TransCanna has announced two significant acquisition targets with signed LOIs: Lyfted Farms and SolDaze. It is reasonable to assume more acquisitions are in the works that, conditional upon closing, could certainly bring top-line revenue into the company before year end.

Quality Control

One of these recent acquisitions is also indicative of what makes for a good addition to a cannabis company in the current climate. Lyfted Farms, based in Modesto, California, is another indoor cannabis producer. The company’s three state licenses allow the production and distribution of cannabis from its facility. TransCanna has signed a letter of intent to acquire the company’s business and assets, adding them to its existing operations.

“The proposed acquisition includes an exceptional brand, with a range of high-end flower, growing revenues, fifty exotic and unique genetic strains and a team that’s been a staple in the Modesto valley with over two decades of cultivating experience,” said TransCanna CEO Jim Pakulis. “In short, this is another example of an ideal acquisition candidate for TransCanna that offers SKU velocity, growing revenues and branded products that differentiate from others in the marketplace.”

That focus on quality plant strains is important for TransCanna. Cannabis consumers value quality in their products, and the legalization of the market makes it easier to measure and control this. While the feeding and facilities in which it is cultivated will affect a plant’s outcome, good breeding stock is the fundamental element that will determine its quality. With a variety of great strains in its arsenal, TransCanna will be better placed to expand its vertically integrated cannabis business.

Expansion Across the Cannabis Sector

Another company with a vertically integrated approach to cannabis, Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) is one of the leading multistate cannabis companies in the United States, a country where federal laws make it difficult to operate across state boundaries. The company covers the whole value stream of cannabis, from cultivation through processing, packaging and shipping, to sales in dispensaries across the country, some of them owned by Cresco itself. Thanks to its worker-friendly approach, the company has been earning positive publicity for the cannabis sector and was recently singled out as one of the best workplaces in Chicago for employees.

To expand its interstate operations, Cresco recently announced its agreement to acquire CannaRoyalty Corp. (OTCQX: ORHOF), which does business as Origin House. A leading distributor and provider of support services for cannabis companies in California, Origin House will provide Cresco with a vast distribution platform, giving it greater reach across California and expertise and experience in distribution. Origin House adds to the company’s ability to retain control of its business from growing facilities all the way to customers’ hands.

Across the border in Canada, HEXO Corp. (TSX: HEXO) (NYSE American: HEXO) has also been pursuing an acquisition strategy. Having entered the cannabis market as a medical provider, the company has added the recreational market to its work, thanks to Canada’s groundbreaking national legislation last year. HEXO announced earlier this year that it will be acquiring Newstrike, the parent company of Up Cannabis Inc., a licensed producer and distributor of cannabis. With the acquisition having received regulatory approval, the companies are set to bring their business together, expanding HEXO’s already impressive work.

For cultivators without TransCanna and Cresco’s level of integration, companies such as DionyMed Brands Inc. (CSE: DYME) (OTCQB: DYMEF) provide essential support services. DionyMed provides value-added services such as logistics, software, packaging and distribution. Rather than acquiring other companies, DionyMed is adding to its value by striking deals with them. The company has recently signed a multimillion-dollar with Blue Kudu, giving DionyMed an exclusive multistate position as distributor for Blue Kudu’s award-winning edibles.

Deals with other cannabis companies can help producers and distributors expand. But acquisitions seem to be the key to real integration and are likely to create cannabis’s future powerhouses.

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

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Growing Media Coverage, Celebrity Endorsements Lead to Soaring CBD Popularity

CannabisNewsWire Editorial Coverage: Growing media attention and celebrity acceptance is fueling rising popularity of CBD.

Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF) (WLDFF Profile) is one of the companies benefiting most from this attention, with its products featured in Kim Kardashian’s baby shower and the new Saks CBD salon. Aurora Cannabis Inc. (NYSE: ACB) is working with the UFC (Ultimate Fighting Championship) and its athletes in clinical studies involving pain management, inflammation, injury, exercise recovery and mental well-being. Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) recently acquired Beboe, a luxury cannabis brand founded in California. With this growing CBD popularity, HEXO Corp. (NYSE American: HEXO) announced that it has become the first cannabis company to join Food & Consumer Products of Canada (FCPC), the largest voice of the Canadian food, beverage and consumer products industry. And Aphria Inc. (TSX: APHA) (NYSE: APHA) has been awarded a fifth lot for the cultivation of medical cannabis in Germany as part of the company’s previously awarded license from the German Federal Institute for Drugs and Medical Devices.

Kim Kardashian’s CBD-themed baby shower splashed across business wires, tabloids, and social media.
High-profile appearances and placement are boosting upper-end CBD brands.
Broad media coverage is normalizing and drawing ever more customers to the sector.

To view an infographic of this editorial, click here.

CBD Whips Up Media Storm

Recent months have seen CBD in the media spotlight more than ever before. The relaxing natural compound, derived from hemp and cannabis plants but without the psychoactive qualities of THC, has been grabbing attention across the internet and in print and broadcast media. What was a fringe interest only a few years ago has now grown into the subject of unceasing mainstream attention.

Some of the coverage comes from news reports and opinion pieces, while the recent legalization of hemp in the United States has sparked interest from virtually every sector of society. With CBD products now on sale in a growing number of shops across a growing number of states, attention has also come from social media influencers, fashionistas and lifestyle writers. Even celebrities and athletes are in on the act, with CBD products appearing in the hands of the rich and famous — a sure signal of widespread popularity in the media age.

Garnering Celebrity Support

One of the brands reaping the benefits from this flurry of media attention is Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF), a premier creator and marketer of plant-based health and wellness products. Headquartered in Vancouver, British Columbia, Wildflower has rapidly expanded its footprint out of Canada and into the United States as the country has become increasingly hospitable to CBD products. The company is focused on building brands around plant-based products, appealing to those looking for natural way to relieve pain, relax and be healthy.

CBD is an important part of Wildflower’s stable of brands. Its Wildflower Wellness brand provides capsules, tinctures, vaporizing liquid and other CBD-infused products, all designed to support relaxation, health and wellness. With its unique combination of high-quality, effective natural products, the brand is designed to appeal to those looking to escape the stresses of modern life and has been embraced by consumers through North America.

Little wonder Wildflower products showed up at Kim Kardashian’s recent baby shower. Kardashian and her husband, Kanye West, recently welcomed their fourth child — and second born by surrogate. In preparation for the event, Kardashian threw an extravagant and well-reported baby shower. To help guests relax and prepare to celebrate the “calm before the baby storm,” the Keeping Up with The Kardashians star threw a CBD-themed baby shower, featuring a DIY makeup station and a group session sound bath. The event included such tranquil activities as massages, flower arranging and mixing CBD oils to create personalize shower gifts.

As part of the event, Kardashian encouraged her guests to enjoy a relaxing puff of Wildflower’s vaporized CBD products. A Wildflower vaporizer was featured in pictures from the party, as celebrities made the most of what CBD has to offer.

This isn’t the first time that Wildflower products have found their way into celebrity hands. Wildflower goods were selected for inclusion in the 2019 Four Seasons Hotel Hollywood Swag Bags, given to nominees, presenters and actors staying at the hotel for this year’s Oscars. With CBD becoming not just acceptable but fashionable, Wildflower was a natural fit for a hotel wanting to make a good impression on its celebrity guests.

The cachet of CBD as a prestigious, high-profile consumer product has been further reinforced by the creation of a CBD salon within the shop at Saks Fifth Avenue. Directly connecting CBD with other high-end brands and the concept of luxury shopping firmly stakes out CBD’s place within the luxury goods market. And once again, Wildflower has garnered high-profile visibility among the products on display.

Media Eyes Up CBD

This move into celebrity culture and the high-end shopping market has come alongside growing media attention for CBD brands.

The arrival in Los Angeles of prominent Long Island beauty boutique Botanica Bazaar gave Vogue reason to cover a range of products including CBD tinctures. For this part of the article, the magazine focused on Wildflower’s products. The company’s strongest CBD remedies, its tinctures have been designed to counter one of the big problems with cannabinoid products — the sometimes unpleasant taste. Wildflower has tackled this challenge by adding natural flavorings to create a product that’s recognized for its flavor as well as its relaxing qualities.

The Vogue piece garnered positive coverage for CBD in general, with Botanica Bazaar’s owners talking about how the pain-relieving power of these products had won a growing number of loyal customers. The article also provided even more positive coverage for Wildflower, with the writers noting that “Wildflower’s CBD tinctures and vapes not only kill the aesthetics game, but also taste good.”

Coverage of broader cannabis culture has brought CBD brands to the attention of a receptive audience. When Vice presented an article on the best female-owned brands in the cannabis sector, the magazine included Wildflower in a section on pain-relieving spa products. A pain-relief product designed to tackle muscle, joint and back pain, the CBD+ Healing Stick was recommended in the article as a useful cure for menstrual pain.

Buzzfeed went so far as to publish an article on why readers should be buying CBD Christmas gifts for everyone, including featured recommendations for products their readers might want to pick. These included a lip butter, truffles and CBD-infused sparkling water, showing the wide range of options now available to the CBD consumer.

Wildflower once again stole the limelight. The company’s disposable CBD vaporizer pen proved to be just too good to leave out of the recommendations. All in all, the company has received mention in more than 15 different articles and media pieces, touting Wildflower and singing the praises of their CBD products.

CBD’s Growing Press Presence

It seems like hemp and CBD can’t help but make news. And other companies besides Wildflower are enjoying the media attention.

Aurora Cannabis Inc. (NYSE: ACB) has begun an exclusive, multiyear, multimillion dollar, global partnership with UFC to advance CBD research. The Edmonton-based cannabis producer said it will work with the fight league’s athletes to study the effectiveness of the plant in treating pain management, inflammation, injury, exercise recovery, and mental well-being. “This global partnership places focus squarely on the health and well-being of UFC’s talented and highly trained athletes,” said Aurora CEO Terry Booth. “The Aurora-UFC research partnership creates a global platform to launch targeted educational and awareness campaigns, while creating numerous opportunities to accelerate our global CBD business.”

With its acquisition of Beboe, Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) gains geographic exposure to the California and Colorado markets, as well as a high-end luxury brand to fill out its brand portfolio. Beboe was founded by fashion executive Clement Kwan and celebrity tattoo artist Scott Campbell and has been dubbed the “Hermes of marijuana” by The New York Times. Beboe products, which include rose-gold vaporizer pens, edibles, and CBD-infused drinks, have already earned their way into 125 retail locations in California and Colorado, and the company had already signed a deal with luxury department store Barney’s New York to open a luxury store called the High End, which opened on the fifth floor of Barney’s flagship Beverly Hills store in late March.

As the first cannabis company to join FCPC, HEXO Corp. (NYSE American: HEXO) continues on its journey to bring its brand value, cannabinoid isolation technology, licensed infrastructure and regulatory expertise to established companies. “HEXO is thrilled to be the first cannabis company to join the Food & Consumer Products of Canada, an established and industry leading association in the consumer-packaged goods space,” said HEXO co-founder and CEO Sébastien St. Louis. “We look forward to working with FCPC and all their members to forge new relationships and potential partnerships. It is an exciting time to be in the ever-evolving cannabis industry.”

Aphria Inc. (TSX: APHA) (NYSE: APHA) was provisionally awarded the fifth cultivation lot in Germany through its subsidiary, Aphria Deutschland GmbH, or Aphria Germany. The lot was secured following a review by a German court, which affirmed the BfArM’s decision. Aphria Germany has now won the maximum output from the German tender process — a total of five lots — and is the only licensed producer in Germany with permission to grow all three strains of medical cannabis approved by the BfArM.

As CBD’s cultural presence grows, companies with a strong media presence and the attention of celebrities and athletes seem certain to benefit.

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

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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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Increasing Growth, Acceptance Move CBD Market Toward Mainstream

CannabisNewsWire Editorial Coverage: The CBD market is seeing strong growth and a move towards the mainstream.

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. Focused on the organic market, Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD) has significantly increased its output to meet demand. Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) has earned its CEO industry-wide recognition through strong growth and a powerful place as a market leader. HEXO Corp. (NYSE American: HEXO) (TSX: HEXO) is pushing CBD and cannabis toward the mainstream through connections with food and consumer product companies. Significant developments in science and agriculture, where Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) is making great steps forward in developing low-cost high-quality hemp, is also strengthening the plant.

To view an infographic of this editorial, click here.

Growing Goodness

The CBD market has seen huge growth over the past few years, appearing out of nowhere to become an industry worth billions of dollars. This growth has been driven in large part by CBD’s potential for health and well-being, a subject that many researchers are busy exploring. 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 marketed a wide range of CBD products. This geographical focus is thanks mostly to questions of legality, 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 U.S. and Canada, with cannabis growth widely permitted.

As a result, the North American cannabis market, including that for CBD, has grown in spectacular fashion. The market was worth $9.2 billion in 2017 and is predicted to reach $47.3 billion by 2027. It’s this market that has proved so fruitful for the likes of Wildflower Brands.

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

Of course, the CBD market hasn’t only been shaped by years of cannabis prohibition; contributing factors also include society’s acceptance of cannabis and CBD. The rules of organizations not normally associated with cannabis can provide a hindrance to companies such as Wildflower Brands. But as the legal market develops, those institutions are shifting their attitudes as well.

The world of sports is an ideal example. 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.

Cannabis and CBD are used in a wide range of pain treatments and products, including those such as Wildflower’s topical treatments. Given the injuries frequently incurred in professional sports, pain management is essential, and players seek access to the best range of medicines. 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

Of course, all this expansion comes with significant 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 willing to adapt and move quickly to support their expansion. This involves forging alliances 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.

One of those is the growing interest in organic and sustainably grown cannabis, which aligns with the existing market for organic fruit and vegetables. Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD) has seen success moving into this niche and is now growing to meet the massive demand. The company is building two new facilities to expand its production base, with growing capacity set to increase from 156,000kg to 202,500kg. Green Organic Dutchman is also looking at the wider global market, with an investment in Jamaican cannabis.

One of the largest cannabis companies in Canada, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) has benefited from that country’s liberal approach to the issue. Early and widespread legalization have given Canadian cannabis companies an opportunity to expand in both the recreational and the medical markets. Aurora is one of the highest trading cannabis stocks on the NYSE and is going from strength to strength. The company’s acquisition of 51% interest in a Portuguese cannabis company has positioned the Aurora for expansion in Europe as that market starts to mature.

Like many cannabis companies, HEXO Corp. (NYSE American: HEXO) (TSX: HEXO) started out as a medical provider but has shifted to include the recreational market in its work. As the first cannabis producer to join Food & Consumer Products of Canada (FCPC), the company is offering cannabis products as part of its wider range of consumables, reducing the stigma and barriers to entry. Such bold moves have led to a 1,269% increase in gross revenue, a performance made possible by a combination of strong leadership and market growth.

Some companies are focused only on CBD, such as Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB). The company’s work in producing high-quality, low-cost hemp through proprietary genetics earned its vice president of cultivation Jared Stanley a place in the cannabis top 100. The science of cannabis cultivation is still in its infancy, but it’s moving fast, and by improving knowledge and techniques, pioneers such as Stanley are laying the groundwork for future growth.

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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CBD Going Mainstream amid Flood of 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.

$22 billion-plus CBD market could eclipse broader cannabis market
Growing consensus about health benefits backed by clinical work, personal endorsements
CBD found in everything from beverages and dog treats to pharmaceuticals and wellness products

The opening of the CBD floodgates represents a huge opportunity for plant-based wellness and health-product developers such as Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile) and Green Growth Brands Inc. (OTCQB: GGBXF) (CSE: GGB), a lifestyle-oriented developer of cannabis and CBD consumer products. Similarly, some of the fastest-growing producers in the industry today, such as Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD) and HEXO Corp. (NYSE: HEXO) (TSX: HEXO) all stand to benefit as the rising tide of the CBD market continues to see tremendous growth for a number of reasons.

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 health 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 CBD drinks being added to menus at bars and coffee shops across America. Many users swear by the efficacy of CBD to combat ailments such as various anxieties, sleeplessness or physical pain. Little wonder that CBD is going mainstream, and product developers have been racing to put the stuff 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 FDA-approved in severe forms of childhood epilepsy.

There appears to be an emerging consensus among consumers that CBD is strong enough to treat something like epilepsy but also safe enough to be used for daily aches and pains or address the myriad anxieties that plague the modern mind. This awareness, combined with the rapid proliferation of CBD consumer products ranging from vape pens to functional foods, has led to a kind of grassroots market revolution. Any stigma remaining due to laymen confusing CBD with 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

Speaking of A-list celebrities and CBD products, it was the Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) CBD+ Healing Stick that found its way into the gift bags of the stars during Oscar weekend 2019. Packing a walloping 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.

A reputable brand whose stated 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, Vancouver-based Wildflower Wellness packs its extracts with essential amino acids and beneficial terpenes, the organic compounds that give plants flavor and scent.

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

Wildflower Wellness has even partnered with Bridges General to take that company’s reimagined convenience store concept to the next level. The partnership fuses together the 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 innovative minds in tech at its Lower Manhattan store, as well its Madison Avenue Bridges General store. The company 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 also has a surprisingly impressive retail reach for a company of its size, 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.

King Extracts’ flagship 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. The company 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 can apparently read the handwriting on the wall and intends to apply the $1.882 million in proceeds from the company’s recent, oversold private placement to good use.

A Rising Tide Lifts All Boats

Green Growth Brands Inc. (OTCQB: GGBXF) (CSE: GGB) is also enjoying the upside as CBD goes mainstream, with increasing traction for the company’s Seventh Sense CBD-infused body care collection. Similar upside is being seen across the company’s other retail arms, including curated product mix Meri+Jayne, CAMP lifestyle product kiosks, women’s wellness focused Green Lily and Nevada-based The +Source dispensaries. Its Indiana shop marks the start of a massive retail push that will see Green Growth Brands leverage newly gained access to some 108 prime retail locations at thriving malls throughout the United States. The push is backed by an $85 million private placement from late last year, which will also bolster the company’s XanthicBiopharms operation and may open the door to a variety of strategically significant new products.

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), one of the biggest and fastest growing producers in the industry today, has seen a somewhat meteoric rise since opening the company’s initial facility in Alberta in 2013. Today, Aurora is engaged in an aggressive international expansion, grounded in an increasingly diverse constellation of subsidiaries and strategic partnerships. Global reach and proprietary high-yield production technologies and techniques have put Aurora on the map as a funded producer, which can deliver more than 500,000 kilograms per year.

Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD), a premier certified organic Canadian producer, is another input supplier benefitting from the increased market exposure CBD has been getting, with 2018 being a pivotal year for the company. Green Organic Dutchman executed two bought deals worth $101.2 million in gross proceeds and pulled another $77.6 million in gross proceeds via private placements. The company was also able to report a healthy $263.5 million in cash and restricted cash for 2018. The Green Organic Dutchman is in a solid position to expand existing facilities and pursue international growth into markets such as Jamaica.

HEXO Corp. (NYSE: HEXO) (TSX: HEXO) is a notable low-cost producer with more than 579,000 square feet of production capacity and a 1,000,000-square-foot facility currently under construction. The company recently moved to acquire an additional 470,000 square feet of production space via an all-share acquisition of Newstrike Brands Ltd., valued at approximately $263 million. This news comes on the heels of the company’s recent announcement that it is the first cannabis company to join the FCPC (Food & Consumer Products of Canada), arguably the biggest voice in Canadian food, beverage and consumer products. This prestigious feather in HEXO’s cap was acquired just days prior to announcing impressive results for what is the first full quarter following the legalization of adult-use cannabis in Canada.

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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