420 with CNW – Possession Limits Increased for New Jersey Medical Marijuana Patients

Last week, Gov. Phil Murphy signed a bill that will expand the medical marijuana program of the state. One of the notable changes in the bill is that patients who could only possess a medical cannabis supply that can last 90 days can now legally possess a year’s worth of medical marijuana supplies.

This change has been applauded by pro-marijuana advocates because it will reduce the inconveniences and costs associated with making frequent trips to a dispensary, especially for patients and caregivers will don’t stay near a provisioning center and those who have mobility challenges.

The number of medical cannabis producers has also been increased, This was in response to complaints about high product prices and a limited variety of medical marijuana products in dispensaries. It is hoped that the introduction of additional producers will make prices more competitive and it will also drive innovation so that patients have more variety to select from.

The new law also increases the number of medical conditions for which patients can qualify for medical marijuana permits, a move that analysts believe was welcome news to the entire industry including players like Sugarmade Inc. (OTCQB: SGMD) and Sproutly Canada Inc. (CSE: SPR) (OTCQB: SRUTF) (FRA: 38G) since a potentially bigger market was created for the medical marijuana products of the cannabis companies within the state. In the past, only sufferers of debilitating conditions could get a medical marijuana license. With the signing of the new law, other conditions, such as post-traumatic stress disorder, chronic pain, cancer, opioid use disorder, glaucoma and epilepsy can qualify a patient to use medical marijuana.

Home delivery of medical marijuana will become a reality once this law takes effect. This is seen as making medical marijuana more accessible for people in areas that don’t have a dispensary. More jobs will also be created for those who participate in the home delivery service.

Since coming into office, Gov. Murphy has so far expanded the medical marijuana program twice. Under his administration, the number of patients has grown to 49,000 from just 15,000 during the time of his predecessor (Gov. Chris Christie). Now that more qualifying conditions have been added, the number of patients will increase even further.

While pro-marijuana advocates are happy that the medical marijuana program has been expanded, this law comes at a time when people are still disappointed that recreational marijuana wasn’t legalized as had widely been expected during the legislative session that ended recently.

The lack of sufficient support for the legalization bill in the state senate made legislative leaders to call off a vote on the bill, and frantic negotiations last month couldn’t secure the needed votes. It now appears that the issue may go to voters during the elections next year or the next midterms.

About CNW420

CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW – 5 Trends Making a Mark on the Cannabis Industry in 2019

As the first half of this year comes to an end, you may be wondering what trends have firmly established themselves as shapers of the cannabis industry. Here is an overview of some trends you may have noticed or need to watch going forward.

Trend #1: Growth of Marijuana Social Consumption

It was always ironical that while marijuana was legal in various jurisdictions, it remained nearly impossible to legally use pot outside one’s home. A new wave of amendments and laws is addressing this gap and we have started seeing states and cities creating regulatory mechanisms for marijuana social consumption lounges. Expect these places to spring up in all jurisdictions where recreational marijuana is legal.

Trend #2: Revived Interest in Plant-Derived Remedies

The growth of the cannabis industry may have had an unforeseen consequence of reigniting people’s interest in treatments that tackle health complications from the root rather than just fixing symptoms. Throughout the U.S. and across the world, plant-derived medicine is seeing a revival which may just be what the marijuana industry needs to go to the next level. The CBD craze is one result of this trend. Expect to see numerous formulations from full-spectrum marijuana and hemp at a hospital or wellness center near you!

Trend #3: Remorse for the War on Drugs

There seems to have been a lot of soul-searching going on and the desire to correct the wrongs committed against racial minorities during the failed war on drugs has become a strong driver of marijuana legalization and decriminalization efforts. Illinois has set the bar, but don’t be surprised if other states raise it higher during the next wave of recreational marijuana legalization initiatives.

Trend #4: Consolidation Within the Industry

This was first noticed last year, but it appears to be gathering momentum as this year progresses. As the cannabis industry matures, many mom and pop or small startups in the industry are being gobbled up by bigger players who have the financial and other resources to successfully navigate the complexities of the industry brought by the contradictory state and federal laws. One advantage of this consolidation is that it will promote the industry further since Americans have generally grown to put more faith in big brands across all industries.

Trend #5: Cannabis Flower is Peaking as a Product of Choice

Cannabis flower still takes the lion’s share of the cannabis market, but this year has seen other segments registering massive growth that outstrips the rate at which the market for smokable flower is growing. For example, marijuana oils and edibles have seen explosive growth in recent months, and this surge is likely to continue at the expense of cannabis flower. Several reasons, such as the stigma associated with smoking marijuana, account for the growth of the other product lines.

Current and potential investors in the cannabis industry may be well advised to watch the trends above carefully and make their investment decisions accordingly. It would be interesting to hear what industry participants like The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF) and Sugarmade Inc. (OTCQB: SGMD) have to say about the trends above.

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

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

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

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

To view an infographic of this editorial, click here.

Masses of Hemp

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

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

What We Get from Hemp

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

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

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

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

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

Scaling Up

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

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

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

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

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

New Technology

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

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

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

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

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

Companies in Need of Processing

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

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

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

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

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

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420 with CNW – Medical Marijuana Dispensary Introduces its Own Credit Cards to Reduce Cash Transactions

Columbia Care, a medical marijuana company, has rolled out its own credit card as the cannabis industry struggles to find alternatives to having to deal in cash only.

Just like banks, credit card providers have been reluctant to embrace the marijuana industry because of fears that they would be sanctioned by the federal government since marijuana remains an illegal substance federally.

This has compelled most dispensaries to accept only cash, with ATMs being a frequent sight on the premises of dispensaries. Some dispensaries have designed systems which accept ATM or debit cards for making payments for purchases made.

Columbia Care has been running trials of its credit card in New York and it now plans to roll out this system in Chicago where it has a dispensary within the Jefferson Park neighborhood. Nicolas Vita, the company’s CEO says that patients spend approximately $144 each time they visit the dispensary in Chicago.

He added that the introduction of the credit cards will make it easier for patients to access the medical marijuana products that they need. He singled out patients who have mobility challenges and those who travel long distances to find a dispensary as some of the patients who may buy more products once they have the credit card. Buying more during a single visit reduces the frequency of making trips to purchase replenishments.

To get the credit card, patrons will be asked to use the tablet in the dispensary to fill a form. The credit card will then be processed quickly and the dispensary client will be in position to use that card during that same visit.

Columbia Care revealed that it is working hard to secure intermediaries and financial institutions in all the 12 states where the company has operations. Those partnerships will make it possible for dispensary clients to use the credit card in those other states.

Unlike other credit cards, the one issued by Columbia Care will not attract any fees. Its annual interest rate (15.99 percent) is also lower than the industry average (17.73 percent).

When the credit card was tested in New York, customers bought approximately 18 percent more products when using the credit card when compared to the purchases made when paying cash or using an ATM or debit card.

Other attempts have been made to find alternative ways to receive payments, but some of those methods border on illegality. For example, some companies accept credit cards but the purchases are reflected on credit card statements as spending at a florist’s while other companies ask clients to buy a gift card and then use that gift card to buy marijuana products.

Meanwhile, there has been a recent push by different groups, such as Attorneys General and banking associations, urging Congress to enact legislation bringing marijuana industry money into the banking system.

It would be interesting to know what industry players like Sugarmade Inc. (OTCQB: SGMD) and Sproutly Canada Inc. (CSE: SPR) (OTCQB: SRUTF) (FRA: 38G) think about some of the unorthodox payment methods that some marijuana companies have resorted to.

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Demand for CBD Places Power in Hands of Extraction Providers

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

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

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

To view an infographic of this editorial, click here.

Turning Hemp Into CBD

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

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

Extraction Efforts

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

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

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

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

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

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

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

The CBD Rush

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

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

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

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

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

CBD Spreads

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

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

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

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

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

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

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

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420 with CNW – Cancer Patient Launches Legal Challenge to Michigan Cannabis Testing Rules

Sherry Hoover, a retired nurse suffering from stage 4 cancer, has taken Michigan to court to challenge its newly imposed medical marijuana testing rules. The lawsuit filed in a federal court seeks to obtain a temporary restraining order so that the plaintiff can continue accessing her marijuana-derived medicine which has since become hard to obtain due to the new testing rules imposed by the state regulator.

The 57-year old plaintiff was diagnosed with mastocytosis leukemia in 2011. She used several prescription drugs, such as fentanyl patches and Norco, with limited effect until she discovered that medical marijuana could improve her appetite, alleviate her pain and enable her to sleep better.

Before April 1 this year, LARA (Licensing and Regulatory Affairs) permitted untested medical marijuana products to be sold in medical marijuana dispensaries. However, those untested tinctures, oils and other medicinal products made by registered caregivers would no longer be sold without being tested once the April 1 deadline passed.

The testing rules have since taken effect, and Hoover is finding it hard to access the products which have been instrumental in giving her a better quality of life. The lawsuit she filed on Wednesday (June 5) seeks to compel the state to extend the commencement of enforcing the testing rules to December 31.

She argues that the current restrictions have resulted in stock-outs in the only two licensed medical marijuana dispensaries which carried the products she uses. Continuing to enforce the testing rules may therefore leave her with no choice but to resort to the black market for her medicine, a step she doesn’t want to take.

The suit states that the four licensed testing facilities cannot cope with the demand for testing services from licensed cultivators, manufacturers and caregivers. Additionally, the added steps, such as transporting the untested products to the testing facilities and then hiring transport firms permitted to carry tested products to medical marijuana dispensaries prolongs the duration needed to get tinctures and other medical marijuana products made by caregivers to the dispensing points where patients can buy them.

In short, Hoover argues in her suit that the state is violating her rights of access to medical marijuana products and yet she is licensed and duly authorized to use such products.

This isn’t the first time that Sherry Hoover is suing the state. Last year, she successfully sued LARA to compel it to extend deadline imposed for unlicensed dispensaries to get the necessary permits or close by December 31, 2018. Her lawsuit was successful and the deadline was extended to April 1 this year.

Sugarmade Inc. (OTCQB: SGMD) longs for the day when all the kinks in the way medical marijuana is regulated are fixed so that these seemingly endless deadline extensions and lawsuits in Michigan come to an end.

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420 with CNW – Spanish Company Develops First THC-Free Cannabis Plant

A Spanish company, Hemp Trading, has developed a new cannabis strain that has no THC. This development became possible after the company partnered with UPV (Universitat Politecnica de Valencia) university in Spain. The new cannabis plant is expected to have numerous therapeutic benefits.

This first-of-a-kind marijuana strain has no legal restrictions imposed upon it since it doesn’t contain any controlled ingredient in it, especially the psychoactive THC which is responsible for the controlled substance status of marijuana around the world.

Ernesto Liosa, the CEO of Hemp Trading, reveals that the company developed this unique cannabis strain by blocking some of the steps through which the biosynthesis of cannabinoids takes place as a cannabis plant grows.

The company’s scientists managed to block the formation of THC while increasing the quantity of cannabigerol (CBG). CBG has several possible medicinal effects. The researchers discovered that CBG is the first cannabinoid of cannabis to form. Consequently, CBG can be regarded as the “mother cell of marijuana” because as the plant grows, CBG is transformed into the two major known cannabinoids (CBD and THC) as well as the other dozens of cannabinoids present in cannabis. This conversion causes CBG to disappear almost completely.

This research has therefore made it possible for the levels of CBG in cannabis to be elevated to concentrations which were unheard of. The other strains of marijuana on the market have concentrations of CBG which range between 0.1 percent and 0.5 percent. The strain developed by Hemp Trading raises the CBG concentration to 15 percent.

The minute quantity of CBG in the current cannabis plants meant that hardly any research was done on this cannabinoid by the scientific community. Most attention went to CBD and THC since these occur in large amounts in most cannabis plants.

Now that CBG has been boosted to 15 percent, the way has been opened for the scientific community to look into the potential therapeutic uses of this cannabinoid.

CBG holds great promise because it is easier to extract when compared to how CBD is extracted from the existing strains of marijuana. The extracts have to be purified to get rid of the THC content. Even hemp which is known for its low THC level must also undergo this purification process in order to eliminate those trace amounts of THC.

The strain developed by UPV and Hemp Trading will be more affordable to process in order to extract the CBG since there is no THC in the plant. The savings made during this extraction process are certain to make the products more competitive on the market.

So far, CBG has been linked to fighting inflammation, reducing intraocular pressure (thereby showing promise in fighting glaucoma), fighting insomnia and depression. More research is likely to unearth additional therapeutic benefits.

Supreme Cannabis Company Inc. (TSX: FIRE) (OTCQX: SPRWF) and Sugarmade Inc. (OTCQB: SGMD) congratulate Hemp Trading and UPV upon their groundbreaking research which will take the medical cannabis sector to another level.

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CBD Surge Puts Pressure on Cultivation Supplies

CannabisNewsWire Editorial Coverage: Growing demand for CBD is increasing pressure on companies that provide key cultivation equipment and industry supplies.

As part of its commitment to build a large and well-supplied sales channel, hydroponic supplier Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) is in the process of making acquisition of companies that supply the hemp industry. An increasing need for supplies is coming from companies such as Canopy Growth Corporation (TSX: WEED) (NYSE: CGC), a major cultivator and processor making moves on the CBD drinks and well-being markets. Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) has entered into a supply agreement with another provider to ensure the materials it needs for its products. Global efforts by companies such as New Age Beverages Corporation (NASDAQ: NBEV) and Aphria (TSX: APHA) (NYSE: APHA) may further strain U.S. supply chains, due to greater cultivation restrictions in other parts of the world.

Many hemp growers use hydroponic techniques for indoor propagation.
These techniques allow greater control over genetics and produce higher quality plants.
The extraordinary rise in the North American cannabis sector is creating unprecedented demand.
Suppliers are responding with growth and mergers.

To view an infographic of this editorial, click here.

CBD Popularity Pushes Agricultural Supply and Demand

The popularity of CBD is creating new trends in the agricultural supply sector. Thanks to legal changes in Canada and the United States, farmers and agricultural companies are rushing to increase production of hemp and other CBD-bearing plants. For some, this involves a shift from growing other crops to hemp, as struggling farmers chase the profits promised by the sector. For others, it means expanding existing hemp production to make the most of the staggering rise in demand.

This concentrated movement is fueling demand for equipment, in particular the specialist equipment used for indoor growing. The agricultural supplies industry faces the possibility of real shortages, and companies that act to solve that problem by meeting the need could seize upon a chance to make this moment work for them.

Hydroponic Agriculture — Is a Supply Shortage Looming?

Growing hemp is a sophisticated business. Aside from the legal, licensing and security issues surrounding the process, growers need specialist equipment and seeds or clones from which to grow crops. It’s on the equipment side that companies such as Sugarmade Inc. (OTCQB: SGMD) are getting involved.

Sugarmade has moved into hemp equipment from another support sector — restaurant supplies and packaging. As with its more recent work, the company didn’t make its mark in the restaurant world by providing products directly to customers, but rather by providing businesses with the materials they needed to get their products out into the world. It may not be as glamorous or high profile as producing the end product itself, but the supporting the backend of the business is vital to keeping those industries going.

With the dramatic expansion of interest in CBD over the past few years, Sugarmade has taken the opportunity to diversify its work. Still focused on growth through brand expansion and acquisition, the company is now making those expansion and acquisition moves in the Hemp sector, where it provides cultivation equipment and supplies.

There are two approaches to growing hemp: outdoor cultivation using soil and indoor cultivation using hydroponic equipment. The choice often means the difference between quantity and quality of plants, with the latter increasingly dominant because of the improved reliability of supplies.

Providers of hydroponic equipment such as Sugarmade have therefore seen a surge in business from hemp growers. As cultivators look to increase their hemp harvest, they also need to increase the size and effectiveness of their growing spaces, and that means a higher demand for equipment.

The Benefits of Hydroponics

Hydroponics is a catch-all term for a number of indoor growing techniques. Sometimes the plants are grown in an inert layer that substitutes for soil, providing something for the roots to grow through. In other approaches, such as deep-water culture and nutrient-film techniques, plants that would naturally grow in soil are instead grown in liquid settings, with their roots floating free. Aeroponics goes a step beyond this, with the roots exposed and fed by sprays of artificial mist.

What each of these approaches have in common is that food for the crop is provided in the form of nutrient solutions direct available to the plants’ roots, instead of those plants having to take nutrition from the soil. This technique gives growers more control over what goes into their plants. Because hydroponic cultivating takes place indoors, farmers also gain greater control over the conditions in which the plants live, including temperatures and quantity and quality of light. Together, this allows for more consistent, higher quality growth, which can also be tailored to increase the quantity of CBD in a plant. It’s that quality and consistency that drives demand for the products offered by companies such as Sugarmade.

Sugarmade provides a wide range of products. These include equipment needed for setup, nutrients used to feed the plants, lighting systems and tools for testing the quality of the environment, which are essential to getting the desired results. The surge in demand caused by rising interest in CBD has put serious pressure on hydroponic suppliers. There have been reports of extensive back ordering and customers having to wait for supplies to come in. In a fast-growing industry where new or expanding cultivators are rushing to establish their positions, that could become a serious problem.

So what are supply companies doing to prevent an equipment shortage?

Ensuring Flow of Hydroponic Supplies

It might sound obvious, but one of the answers is larger businesses. Companies such as Sugarmade are dramatically expanding their operations, thus seeing an increased level of power over their supply chains and the capacity to both stock and sell greater volumes of agricultural equipment. The efficiencies and reach of larger companies, along with their financial capacity to order supplies in larger volumes, will invigorate the hydroponic supply chain and ensure that growers’ needs are met.

To support this goal, companies have been undertaking mergers and acquisitions. Sugarmade has made two such moves — and the company isn’t stopping there. As CEO Jimmy Chan said, “Sugarmade is expecting to realize exceptional revenue growth this year from all of our hydroponic-related market sectors. . . . We continue to seek additional acquisitions to further boost our already-expected robust revenue growth rate.”

Scale brings advantages beyond efficiency. Larger companies can provide a wider range of products, and so cater to the needs of cultivators trying out different hydroponic techniques. This supports innovation in hemp cultivation, as equipment from a single supplier can be used to experiment with best practices, from inert beds and water flows to aeroponics. Variety of resources also allows growers to experiment with their nutrient mix, thus obtaining the best possible results from their plants.

By providing a large supply base and a wide range of products, Sugarmade is helping to tackle equipment shortages and get hemp growers up and running.

Relying on Hydroponics

Hydroponics are now feeding into a huge sector growing hemp and other CBD-bearing plants.

One of the biggest companies in the space is Canopy Growth Corporation (TSX: WEED) (NYSE: CGC). Already a major player, the company’s purchasing power has been further expanded over the past two years by billions in investment from drinks giant Constellation Brands. This is seen as part of a wider trend of companies looking to produce CBD drinks, which could create yet another surge in demand for hemp and the equipment to cultivate it. Canopy Growth is currently pushing forward with a multifaceted hemp and CBD strategy and, as part of that focus, has acquired skincare and well-being company This Works.

The equipment needed by the CBD industry isn’t just about agriculture. The founding of a new R&D facility by Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) appears to be good news for companies equipping biotech researchers. In addition, Cronos has also entered a supply agreement to ensure a steady flow of concentrates needed for its products, ahead of changes in rules on foodstuffs that will expand the market in Canada later this year.

While much attention is on North America, New Age Beverages Corporation (NASDAQ: NBEV) announced in April its push to become a global brand. Selling CBD products including oils, creams and lotions, as well as its specialist beverages, the company is targeting an international customer base increasingly interested in the potential of CBD. Only three years old, New Age Beverages is already making a splash with its vibrant brand and growing product range.

Aphria (TSX: APHA) (NYSE: APHA) is also expanding globally, with the introduction of CannRelief, a CBD product line targeting Germany. The emergence of a European market is likely to increase demand for CBD from North America, at least in the short term, as many European countries have not yet seen legal changes to ease the production of CBD.

With CBD demand growing around the world, demand for cultivation supplies is also increasing. Companies that put in the work to expand their supply channels may establish profitable ongoing relationships with a new generation of hemp cultivators.

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

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420 with CNW – New Jersey May Turn to a Referendum to Legalize Recreational Marijuana

As it becomes increasingly clear that the bill to legalize recreational marijuana is unlikely to get enough support in the New Jersey senate, lawmakers are beginning to consider the possibility of letting voters make the decision through a referendum in 2020.

It is now six weeks since a vote on the legalization bill was suddenly called off, but legislative leaders and Gov. Murphy don’t seem to have made any progress is securing the “2-5 votes” needed to guarantee that the legalization bill will pass on the senate floor. The Assembly doesn’t have the same problem and they are just waiting for the senate to be ready before they vote to pass the bill.

That wait doesn’t show any signs of ending soon, and some lawmakers are beginning to float the possibility of letting voters have the final say on marijuana legalization.

New Jersey is unique from other states because voters cannot initiate a referendum or ballot measure as it is known elsewhere in the country. Instead, legislators have to agree and draft the appropriate referendum question so that voters cast their ballots for or against the question presented.

Gov. Murphy laid down a deadline of end of May and threatened to expand the medical marijuana program administratively if the legalization bill isn’t passed by that time. Expanding the medical marijuana program would most likely spell doom for legalization by legislative means since there will be no urgency to debate and pass a standalone recreational marijuana legalization bill.

Sen. Nicholas Scutari (D-Union County), who drafted the legalization bill, is of the opinion that pursuing legislative means to legalize recreational marijuana would bring better and faster results than using a referendum to change the law.

Scutari added that for a referendum to be binding, it needs to be drafted to the effect that the constitution would be amended to allow recreational marijuana in the state. The state should only resort to a referendum if all else fails, he affirmed.

Gov. Phil Murphy is interested in seeing the recreational marijuana bill passed, but the cries of patients who want to see the medical marijuana program expanded may force him to act on having the medical marijuana expansion bill passed on its own. For example, the six existing dispensaries are woefully inadequate to serve the more than 40,000 medical marijuana cardholders.

Supreme Cannabis Company Inc. (TSX.V: FIRE) (OTCQX: SPRWF) and Sugarmade Inc. (OTCQB: SGMD) call on the lawmakers to put aside their differences so that the people of New Jersey aren’t forced to wait for years before recreational marijuana is legal in the state.

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Hemp Companies Move to Tackle CBD Shortfall

CannabisNewsWire Editorial Coverage: A boom in demand for cannabidiol (CBD) has created an alarming shortage, which savvy hemp companies are aggressively looking to solve.

Cultivation supplies company Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) has acquired several other suppliers, allowing it to benefit from economies of scale. Canadian cultivator Tilray Inc. (NASDAQ: TLRY) is investing heavily in new growing space. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has expanded from Canada into the United States and is collaborating with other companies to meet demand. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has received a substantial inflow of funds from a tobacco company and is investing some of it in R&D. Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) is focusing on growing high-quality hemp to supply a range of novel products.

To view an infographic of this editorial, click here.

Demand for CBD has soared thanks to consumer interest.
Legalization nationally in the United States through the farm bill has led to more cultivators and a rising demand for cultivation supplies.
Companies are rising to meet these supply challenges through expansion, consolidation and innovation.

CBD and the Challenge of Demand

The ability to meet customer demand is one of the fundamental challenges for any industry. If businesses can’t keep up with demand, they don’t just miss out on an immediate opportunity for profit, they risk losing the attention of customers in the long term.

For a relatively new product such as CBD, that problem is particularly acute. Though demand for the product is currently high, the industry is not well established, making it critical that companies reinforce customer habits through supplying the products they’re seeking. Being new, however, makes the supply problem particularly challenging, as production techniques and supply pipelines are not fully developed for massive consumption. The future of the industry will depend upon which companies are able to meet this demand and how they do it.

The CBD Boom

The CBD industry has seen a staggering boom in the past. This growth has created opportunities for companies such as brand expansion and acquisition firm Sugarmade Inc. (OTCQB: SGMD), which is making a strong play into the sector, as well as new companies focused purely on CBD.

The demand for CBD is easy to explain. Recent research into its uses has suggested that this naturally occurring compound can be useful in a range of health and well-being roles, including managing pain and helping users to relax. This compelling research has naturally drawn the attention of customers seeking new options to improve the way they feel, especially those consumers who prefer to avoid heavily processed chemicals.

Publicity around CBD has further raised demand. Some of this attention comes from emerging CBD companies, whose marketing efforts have raised the profile not just of their own brands but of the sector as a whole. Additional exposure has come from the battle to make hemp cultivation legal across the United States. Because hemp provides most of the available CBD, this process also brought hemp production into the public spotlight. Companies such as Sugarmade found their businesses attracting far more attention — so more demand.

This demand culminated with the passage of the 2018 Farm Bill. Signed into law just before Christmas, the bill legalized the production of hemp on a national level. This makes hemp production a far more straightforward and reliable source of income, and will allow more farmers to benefit from a profitable cash crop. As companies rush to enter the sector or expand production in response to the bill, demand for the services and equipment they need has soared. As a provider of the hydroponic cultivation supplies on which many hemp farmers depend, Sugarmade and its pending acquisition subsidiaries — AthenaUnited.com and Zenhydro.com — has found itself swamped with orders.

Shortage of CBD

This surge in demand following the farm bill has created an undeniable opportunity within the CBD sector — along with a challenge. Fortunately for Sugarmade, it’s a challenge that they appear to be instrumental in solving.

Hemp cultivators are currently unable to provide the volume of plants that customers want. One of the reasons is that the cultivation, processing and supply systems simply aren’t large enough. The CBD industry was already on an expansion path as it tried to meet growing demand before the farm bill. Now with that demand growing further, it’s going to take time and a big push to achieve what people are after. Making an industry legal doesn’t make it magically appear.

Then there’s the unreliability of the CBD levels in hemp. The chemical content of the plants is small and hugely variable. Relatively small shifts in the makeup of a crop can have a significant impact on how much CBD is produced.

Cultivating larger, more reliable crops is vital to the future of the industry. Manufacturers are eager to rise to that challenge. However, to do so they need to get the supplies to get them off the ground, including hydroponic systems, feed chemicals and the clippings, or clones, from which much hemp is grown.

Looking at the effect of this shortage in just one state, Sugarmade CEO Jimmy Chan was optimistic about the effect on his company. “With at least 42,000 acres of hemp expected to be planted in Kentucky and considering an average plant density per acre of well over 1,000, farmers in Kentucky will need hundreds of millions of clones over the coming years,” he said. “When these numbers are multiplied over the many other hemp cultivation states, it is easy for anyone to see the strong demand scenario that is quickly developing.”

Responding to the Shortage

To meet the demand for CBD, hemp cultivators will clearly need to improve both the quantity and the quality of their crops.

It’s easy to see how an increase in quantity will have knock-on effects for suppliers such as Sugarmade. The company’s pending acquisition subsidiaries AthenaUnited.com and ZenHydro.com are seeing orders for their cloning supplies skyrocket, with backorders building up as they rush to meet unprecedented demand.

The search for more reliable levels of CBD is also contributing to this demand. Hydroponic systems give cultivators control over the growing process. By experimenting with hydroponics and controlling the light, plant food and environment, cultivators can find ways to grow plants with predictable and higher levels of CBD. This experimentation will create even more demand for hydroponic materials. Sugarmade should be central to the improvement of these processes.

To provide supplies as efficiently and profitably as possible, Sugarmade has gone through a period of expansion, acquiring other companies in the hydroponics and CBD sector. This model of consolidation is being repeated across the industry as businesses seek efficiencies of scale.

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

Expanding Potential

Sugarmade isn’t the only CBD-related company using acquisitions to expand potential. Canadian company Tilray Inc. (NASDAQ: TLRY) has undertaken a series of acquisitions, including Manitoba Harvest, the world’s largest hemp foods company, to strengthen its position in hemp. The company has responded decisively to the recent supply shortage in hemp and related plants in North America, in part by investing $32.6 million to significantly expand it production space across three sites, increasing its cultivation and manufacturing footprint by nearly 20%.

Another of the big Canadian companies, Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has opted into investing south of the border thanks to the farm bill. The company has set up a hemp-growing facility in New York state and acquired another hemp company, AgriNextUSA. Canopy Growth has also been collaborating with other CBD and related companies to boost their shared output. One collaboration with PharmHouse has seen Canopy Growth provide high-quality genetic stock to PharmHouse’s growing facility. In return, Canopy Growth will benefit from an offtake agreement to obtain flowers from the plants PharmHouse is growing.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has benefited from attention on the sector through a huge injection of outside cash. Tobacco giant Altria has agreed to invest C$2.4 billion in Cronos Group, providing the company behind Marlboro with a way into a new sector. Fittingly, Cronos Group is investing some of its funds in a new R&D facility that will work on vaporizer products. Vaping has become a popular way of consuming CBD, so the investment may allow Cronos to benefit from the market from multiple angles.

American CBD producer Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) has been using proprietary genetics to work toward the goal of high-quality, low-cost hemp. The company has also been creating innovative new products to make use of the growth in CBD. Its recently expanded pet line offers the promise of calming dogs and easing joint pain brought on by age.

Rising demand for CBD has created a challenge, but it’s a challenge that smart companies are definitely ready to meet.

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

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