420 with CNW – Florida Activists Notch First Victory in Campaign to Put Cannabis Legalization on the 2020 Ballot

An effort to legalize recreational marijuana in Florida registered its first victory on Monday when reform activists announced that they had collected a sufficient number of signatures in order to trigger a process through which the state’s Supreme Court would review the language of their petition.

If the court approves the petition’s language, Regulate Florida, the group behind the legalization effort, will face its biggest hurdle yet. At least 766, 200 voter signatures will need to be collected in order to put cannabis legalization on the state ballot next year. This required number of signatures is approximately ten times what the group had to collect in order to get the Supreme Court to review the measure’s language.

The activists observe that it is very expensive to collect signatures in support of such an initiative. For example, it costs about $2 to print, collect and validate each petition. The reform advocates have not yet received any financial backing from John Morgan, the personal injury attorney who bankrolled the effort to legalize medical cannabis in the state in 2016. Morgan had also financed a failed attempt to legalize recreational marijuana in the state in 2014.

The personal injury attorney seems to have opted to put his money behind an initiative to increase the minimum wage in the state. He is reported to have said that he is doubtful that Florida is ready for recreational marijuana even if recent polls show that 65 percent of adults in the state want to see an end to marijuana prohibition.

However, the activists are confident that Florida voters will do what the lawmakers have failed to do on several occasions. For example, a bill to legalize recreational marijuana stalled even before a hearing had been scheduled in the state legislature.

Regulate Florida has also adopted another tactic to make the recreational marijuana initiate more attractive. They are positioning this effort as a measure which will make the medical marijuana program more patient-friendly since patients will be allowed to grow a limited number of marijuana plants for their medical needs. Home cultivation wasn’t allowed under the law through which the medical marijuana program was legalized.

The activists are now calling for volunteers to help in the signature collection process, and they are also appealing for donations to fund the signature collectors who aren’t volunteers. Analysts believe that the cannabis industry, including TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) and Therma Bright Inc. (TSX.V: THRM) (OTC: THRBF), will be rooting for the reform advocates since the wall of prohibition needs to be pegged back in as many states as possible if the industry is to reach its full potential.

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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 – Thousands Submit Comments Urging FDA to Allow CBD in Supplements and Foods

The U.S. Food and Drug Administration (FDA) started receiving comments on CBD regulation from the public and other stakeholders in April and the comments period came to an end early last week.

The agency had initially planned to close the comments period on July 2 but the overwhelming public interest in the matter led the FDA to extent that deadline to July 16. By the close of the comments period, more than 4,400 submissions had been filed by individuals and organization.

The comments received covered everything imaginable about the therapeutic effects of CBD, how the compound should be tested, packaged and marketed, as well as matters of consumer protection and law enforcement.

There were hundreds of comments from individuals who claimed that CBD had helped them to deal with the symptoms of different health challenges, such as pain and anxiety. Other people claimed that they were able to wean themselves off of other drugs that had serious side effects by using CBD.

Several health associations and medical professionals submitted comments to the effect that the agency should regulate CBD as a health supplement as long as strict labeling and quality standards are set for manufacturers.

The Dravet Syndrome Foundation submitted a comment urging the FDA to formulate regulations that standardize the labeling of CBD supplements on matters of concentration, stability and the ingredients in the products since Dravet syndrome sufferers have been turning to these products after failing to get relief from the existing remedies.

A group of 37 state attorneys general also wrote to the FDA asking the agency to formulate rules that would protect consumers by requiring manufacturers to provide accurate information about the risks and potential benefits of CBD products. This would enable consumers to make an informed decision about the CBD products they use.

The Center for Science in the Public Interest (CSPI) submitted their comment requesting the FDA to design a program through which the state laws on CBD and other related products could be gradually aligned with the federal regulations on these products. By bringing uniformity to the CBD rules across different jurisdictions, the FDA will have taken a significant step towards safeguarding consumers from adulterated, mislabeled and contaminated CBD products, CSPI added.

The National Association of State Departments of Agriculture (NASDA) called on the FDA to work closely with them in order to find ways to regulate the industry without stifling its growth.

The FDA will use these comments, along with any other input it receives from other fora, such as a planned hemp conference next month, while formulating the draft rules for the hemp industry which are slated to be released in August.

Marijuana industry analysts believe that players like VIVO Cannabis Inc. (TSX.V: VIVO) (OTCQX: VVCIF) and TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8), will be eager to see what rules are finally released since CBD products could be an additional moneymaker for these entities.

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420 with CNW – The Global Cannabis Market is Expected to Be Worth $66.3B by 2025

The global legal cannabis market size is predicted to reach $66.3 billion by the end of 2025. This market is expected to grow at a compounded annual growth rate (CAGR) of 23.9 percent within the years covered in the forecast. The increasing legalization of marijuana and the demand for medicinal marijuana is expected to be the key driver of this market growth.

In the coming years, the growing demand for cannabis products in the treatment of various health conditions, such as Alzheimer’s, cancer, Parkinson’s, arthritis, and several neurological conditions is expected to boost the demand for marijuana as a pharmaceutical product.

Additionally, many countries and jurisdictions have legalized marijuana either for recreational or medicinal purposes. This has had a major adverse effect on the black market of marijuana in those areas, and this is a plus for the legal industry that will see the market expand at the predicted pace. The desire for governments to earn from the legal industry is another factor that will contribute to further legalization and expansion of the marijuana market.

Regionally, the demand for marijuana products is likely to be largely driven by the huge market in the U.S. and Canada, especially for medical marijuana. In contrast, the stringent regulations and rules imposed on the cultivation and sale of medical marijuana in Europe may dampen the growth of the industry on the European continent even if markets like Germany offer great promise.

At the moment, Israel is playing a pivotal role of sharing its technological prowess and cannabis knowledge with other parts of the world. As these markets, such as Thailand the U.K, open and grow, the global market will benefit from these potentially major players in the industry.

The report also points out that in 2018, the cannabis market in the U.S. was valued at $11.9bn and it is expected to grow at a compounded annual growth rate of 24.1 percent for the duration of the forecast in the report till the end of 2025.

Cannabis buds or dried flower took the lion’s share of the global marijuana market in 2018 because it accounted for more than half of all the sales recorded in the industry. This segment is expected to grow at a CAGR of 20.6 percent during the forecast period.

Analysts strongly feel that this bullish outlook for the global marijuana industry will spur industry players like TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) and Therma Bright Inc. (TSX.V: THRM) (OTC: THRBF) to ramp up their own growth plans in order to cash in on the global growth of the industry.

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420 with CNW – Cannabis Edibles Could Cause a Spike in Life Insurance Premiums for Canadians

As Canadians countdown to the start of cannabis edibles sales in December, some sobering information is filtering in to the effect that life insurance premiums could go up depending on one’s cannabis edibles consumption habits.

When recreational marijuana was legalized in October 2018, most insurance companies stopped regarding marijuana users as smokers. People who are categorized as smokers can pay up to four times more in life insurance premiums when compared to those who are categorized as non-smokers. This is because smokers are seen as being higher-risk clients for insurance companies.

However, it has emerged that one’s marijuana consumption habits can still get that person in the smokers’ category when taking out a life insurance policy.

Different insurance companies have their own cannabis consumption threshold beyond which the individual is classified as a smoker. Many put the weekly consumption cap at 2-4 times, but some have a higher consumption threshold.

So, what’s the deal with cannabis edibles and life insurance premiums?

It is anticipated that marijuana edibles will appeal to a broader section of the Canadian community, including those who are queasy about smoking cannabis flower. Additionally, it will be easier for someone to consume an edible product, such as a brownie, containing cannabis since these products will become readily available.

For example, many will not find any problem consuming at least one cannabis edible each day, and it is rational to expect lots of Canadians to consume more than one pot edible a day. This puts their weekly average consumption at more than the threshold set by insurers, and the smoker classification can get activated for such people.

Since marijuana has only been recently legalized, insurance policies are still in their infancy and the fine print hasn’t yet been adjusted to cater for the actual quantity of marijuana consumed. For example, a small brownie containing a small amount of marijuana is currently rated the same as a jumbo one having much more marijuana than what is contained in the smaller brownie.

This seems unfair to marijuana users, but it is what it is until the policies are modified to accommodate those nuances.

Some people may be wondering how life insurance companies will get data on their clients or prospective clients’ cannabis consumption habits. While these insurers will not access your cannabis products purchase records, they will ask you to provide some information about your marijuana consumption habits as you take out a policy.

If you downplay how much marijuana you consume in order to avoid being classified as a smoker, you face a high risk of any insurance claim you or your loved ones make being denied if the insurer later discovers, from your medical records for example, that you consume way more marijuana than what you declared. A discussion with your attorney is advisable before you sign any life insurance paperwork.

These developments in Canada paint a picture of what could happen in the U.S. if the federal government ever amends its marijuana policies to become more permissive towards the substance. How would this insurance issue play out? It would be enlightening to know what the take of marijuana industry players like VIVO Cannabis Inc. (TSX.V: VIVO) (OTCQX: VVCIF) and TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) is on this matter.

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Acquisitions, Licenses, Research Key in Consistent Cannabis Market Growth

CannabisNewsWire Editorial Coverage: The cannabis sector continues its steady shift toward big business and big money, with much of growth based on acquisitions, agreements and consistent research.

TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) (TCAN Profile) is focused on creating a large operation with various licenses and recognized brands, with several key acquisitions, being part of that strategy. Medmen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) is in the process of acquiring PharmaCann, which recently received an extension to complete the development of its cultivation facility in Ohio. Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) just entered into a multiyear supply agreement that will help the company provide high-quality products to consumers in anticipation of the derivative market launching in Canada this fall. Tilray Inc. (NASDAQ: TLRY) recently completed its acquisition of Manitoba Harvest, the largest hemp food company. GW Pharmaceuticals Plc (NASDAQ: GWPH) continues its march forward as a leader in cannabinoid prescription medicines sector with its recent announcement of positive, top-line results of a Phase 3 clinical trial of Epidiolex® in the treatment of seizures associated with a rare and severe form of childhood-onset epilepsy.

Cannabis companies are engaging in multimillion-dollar acquisitions in growing numbers.
This strategy supports a consolidation of the industry as it moves from scattered creativity to efficient large businesses.
The trend is built in part on intangible assets, including brands, licenses and research.

To view an infographic of this editorial, click here.

A Very Different Business

The image of the cannabis industry varies significantly depending upon an individual’s point of view. To supporters, the market is a transformative sector aimed at bringing the world together. Detractors call the industry one more vice threatening public morals. For many standing in the middle ground, the sector is a space where hippies and stoners can thrive but not necessarily 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 nascent steps into legality to become a significant business sector much like any other, with all the elements of modern capitalism. This growth appears to be reflected in the sector’s recent burst of mergers and acquisitions.

Big-Money Deals

Certainly one of the most eye-catching aspect of mergers and acquisitions in the cannabis sector is the significant amount money involved. 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 some standards, these might not seem like significant deals. But when a company is investing $20 million on expansion in the space of a couple of months, stability seems evident. 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 financial growth of the legal cannabis industry has 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 progression of the legal cannabis industry started with a scattered approach. TransCanna is one of many companies that started in the market with a relatively small presence. Some began as 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 was initially made up of diverse and disconnected businesses. Now, however, the sector is moving toward a space of consolidation.

This doesn’t mean that the variety created in that early surge is being lost. When larger companies buy up smaller ones, the aim is often to continue supporting and growing the individual brands and styles the smaller companies have created. For example, TransCanna has announced the acquisition of GoodFellas, allowing TransCanna 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 Power of the Immaterial

In the illegal market, product was the main focus for cannabis sellers. In the legal market, the focus is different. When a company relies on the full complement of marketing, intangible assets become important. That’s why GoodFellas is valuable to TransCanna — not just for its cannabis but for the Daily brand 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.

Last year Medmen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) soared 60% in one week when the company announced the deal to buy PharmaCann. PharmaCann is working to complete its $20-million cultivation center, which must be operational before the acquisition can be completed to comply with Ohio law, which requires a licensee to have operating certification before transferring a license to another owner. The deal will double the number of states where Los Angeles-based MedMen has licenses to operate – expanding the firm’s reach to 12 states with 66 retails stores and 13 cultivation facilities.

The agreement between Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) and MediPharm Labs Corp. will supply Cronos Group with approximately $30 million of high-quality, private-label cannabis concentrate over 18 months and, subject to certain renewal and purchase options, potentially up to $60 million concentrate over 24 months. In addition, Cronos Group and MediPharm Labs have entered into a multiyear tolling agreement, where Cronos Group will supply bulk cannabis to MediPharm Labs’ state-of-the-art extraction facility in Ontario.

With the completion of the acquisition, Manitoba Harvest will operate as a wholly owned subsidiary of Tilray Inc. (NASDAQ: TLRY), leveraging the expertise of Tilray’s global cannabis industry expertise. “Tilray’s acquisition of Manitoba Harvest is a milestone for the cannabis industry,” said Tilray president and CEO Brendan Kennedy. “It builds on the strategic partnerships we have formed with consumer brand industry leaders and demonstrates our track record of disrupting the global pharmaceutical, alcohol, CPG, and functional food and beverage categories. We’re excited to work with Manitoba Harvest to develop and distribute a diverse portfolio of branded hemp-derived CBD food and wellness products in the U.S. and Canada.”

The newest test results from GW Pharmaceuticals Plc (NASDAQ: GWPH), the world leader in the science, development, and commercialization of cannabinoid prescription medicines, expands the company’s knowledge of Epidiolex and its potential use beyond the current indications. “Data from previous controlled clinical trials of EPIDIOLEX have shown clinically meaningful seizure reductions and consistent safety and tolerability in children and adults with Lennox-Gastaut syndrome and Dravet syndrome,” said Dr. Elizabeth Thiele, the lead investigator of the trial, director of the Herscot Center for Tuberous Sclerosis Complex at Massachusetts General Hospital, and a professor of neurology at Harvard Medical School. “Based on the positive results of this trial in TSC patients, Epidiolex, if approved for this additional indication, may become an important treatment option also in this disease state with significant unmet medical need.”

The cannabis industry is clearly evolving with big money, consolidation and growing intangible assets playing pivotal roles in the growing strength and consistency of the sector.

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

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DISCLAIMER: CannabisNewsWire (CNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. The commentary, views and opinions expressed in this release by CNW are solely those of CNW. Readers of this Article and content agree that they cannot and will not seek to hold liable CNW for any investment decisions by their readers or subscribers. CNW is a news dissemination and financial marketing solutions provider and is NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.

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420 with CNW – Canadian Companies Forced to Delay Launching “Cannabis 2.0” Products

The effects of the longstanding cannabis shortages in Canada are being felt far beyond the empty shelves in retail outlets. When recreational marijuana was legalized on October 17, 2018, a promise was made that marijuana edibles, vapes, CBD and beverages (so-called cannabis 2.0 products) would be available for purchase exactly one year later. Now the regulator has delayed the start of retail sales of those products citing a procedural requirement for the producers.

Health Canada, the regulator of the marijuana industry in Canada, held a briefing on Friday, June 14 in which the regulator informed the public that there would be a delay in rolling out the “cannabis 2.0” products for another two months.

Health Canada mentioned that while its rules would start being operational on October 17, it wouldn’t be possible for any edibles or other “2.0 products” to be sold until at least two months later. This is because the manufacturers of those products will start filing notices with the regulator of the products being brought to market and those manufacturers must then wait for a minimum of 60 days before starting to ship the products to the retail outlets.

It is believed that the 60-day window will allow the regulator to scrutinize those products and approve those which meet all the requirements in the law. In effect, retail sales will begin on Dec. 17 or thereafter.

The revenue generated from cannabis edibles and other second-generation marijuana products will not be reflected in the earnings of the fourth quarter (Q4) of this year. Instead, those figures will only become meaningful at the end of Q1 of 2020.

Canadian companies like Aurora Cannabis and Canopy Growth had been looking forward to launching the sale of these products because those products have performed excellently in the U.S. states which permit their sale.

These Canadian companies are therefore going to have no choice but to revise their revenue projections for Q4 of 2019 to reflect this delay to bring edibles, beverages and other “second-wave” marijuana products to the market.

On the other hand, marijuana companies shouldn’t be too concerned by the delay unless the cannabis 2.0 products were going to carry a bigger profit margin than the smokable flower which is chronically sold out at retail outlets.

Analysts are eager to know what marijuana industry players like VIVO Cannabis Inc. (TSX.V: VIVO) (OTCQX: VVCIF) and TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) have to say about this latest announcement by Health Canada.

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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.

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 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.

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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420 with CNW – First Cannabis Charity Launches in Canada

Hope for Health, a Toronto-based charity, has been launched as the first cannabis charity registered by the Canadian government. The charity is registered in the category of organizations whose intention is the “advancement of education.”

Hope for Health says it aims to enable patients to manage their health effectively while also giving them the autonomy to choose which cannabis products and cannabis producers to deal with.

The charity kick-started its operations amidst fears that medical marijuana patients are getting reduced attention as more attention is directed towards the recreational market. This is seen in the rising medical marijuana product prices. Access points for medical cannabis are also reducing while a new excise tax on marijuana prices has also been imposed on medical marijuana products. This excise tax can only be waived on the product price if the company selling medical marijuana products opts to absorb that cost.

To alleviate this increased cost of medical marijuana products, Hope for Health has decided to avail a renewable monthly stipend to patients who meet the eligibility criteria of the charity. This stipend is conditioned upon the patient purchasing their medical marijuana products from one of the 170 producers licensed by the Canadian federal government.

Hope for Health intends to take on at least 150 patients during its first year of operation. More patients will be onboarded each year and the number will vary depending on the resources available as well as the level of interest displayed by patients.

The charity doesn’t only have its eyes on patients. Hope for Health plans to create and disseminate educational materials to health care professionals about the medicinal benefits of marijuana. This will be done in conjunction with creating partnerships with research organizations, academic institutions and medical associations.

Hope for Charity is the brainchild of Auxly Cannabis Group, an entity that provides financing to cannabis cultivators. Auxly Cannabis Group has committed itself to availing funding that they are calling “a cornerstone donation.” The funds will be used to get the charity on its feet.

Hugo Alves, the director of Hope for Health, remarked that the idea of the charity was conceived three years ago. The founders felt that every entity which had reaped from the cannabis industry in the country would rally around the idea and support its operations.

The founders also strongly felt that the leadership and management of the charity should be independent if Hope for Health is to retain its appeal to all players in the industry. To this end, they selected Dr. Jenna Valleriana as the Executive Director of the charity.

Dr. Valleriana is a respected cannabis policy expert who heads the National Institute for Cannabis Health and Education. She recently published a cannabis education toolkit which was used by two other organizations to design digital tools aimed at educating students and parents about marijuana.

TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) and Therma Bright Inc. (TSX.V: THRM) (OTC: THRBF) commend the people behind Hope for Health and wish them all the best in their noble undertaking.

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420 with CNW – Missouri Puts Final Touches to Medical Marijuana Rules

Voters in Missouri approved a ballot measure which legalized medical marijuana in 2018. In March this year, the Department of Health and Senior Services released draft rules for the medical marijuana program and invited public comment on those rules. Last week, the department completed making changes to the draft rules based on the feedback received and they published the revised draft rules on the department’s website on Friday.

The rules cover 11 broad aspects of the medical cannabis program. These include rules covering patients and caregivers participating in the program, cultivation facility license procedures and requirements, testing facilities, seed to sale marijuana tracking and the rules governing medical marijuana manufacturing facilities.

The Department of Health and Senior Services (DHSS) will start receiving patient applications based on these rules on July 4 while applications from businesses which want licenses will be received starting August 3. The application forms are now available on the website and all interested parties can access and fill those forms.

DHSS will then start scoring the business applications and complete this exercise on December 31 this year, after which business licenses will be issued to the successful applicants in 2020.

The medical marijuana program has attracted a lot of interest from the business community, and the state expects to generate millions of dollars in taxes and fees from the industry.

However, the actual earnings are likely to fall short of what has been predicted. Economics professors at Missouri University crunched the numbers and concluded that the number of eligible patients in the state would be less than initially expected. The professors estimated that in 2022, the medical marijuana program is likely to raise about $3.4 million in taxes and fees, a figure which is much lower than the $24 million predicted by the people behind the initiative which saw the approval of the ballot measure legalizing medical marijuana.

In the meantime, 510 applications have been pre-filled and are due to be submitted. Those applications have generated more than $3.67 million in application fees. From these applications, 60 cultivation facilities, 86 manufacturing facilities and 192 medical marijuana dispensaries will be selected. The state will license 24 dispensaries for each of the eight congressional districts.

These draft rules will also be subject to public comment and a public hearing will be organized in July. TransCanna Holdings Inc. (CSE: TCAN) and Therma Bright Inc. (TSX.V: THRM) (OTC: THRBF) applaud the authorities in Missouri for systematically implementing the roadmap to the commercialization of the medical marijuana program.

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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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