Tag: TLRY

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

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

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

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

To view an infographic of this editorial, click here.

CBD Drives Growth for Hemp

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

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

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

The Farm Bill

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

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

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

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

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

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

CBD Demand Grows

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

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

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

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

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

Making the Most of a New Market

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

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

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

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

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

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

About CannabisNewsWire

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

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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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Hemp Boom Leads to Cultivation Supply Shortages

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

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

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

To view an infographic of this editorial, click here.

Hemp — The New Cash Crop

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

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

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

With Growth, Shortages Loom

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

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

Generating New Revenue Streams

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

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

Profiting from Supply and Demand

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

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

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

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

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

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

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

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

CannabisNewsWire (CNW)
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www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com

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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Vertical Integration Offers Profit Potential within Growing Cannabis Industry

CannabisNewsWire Editorial Coverage: As the cannabis industry continues its impressive growth, acquisitions are leading to greater vertical integration.

  • Companies within the cannabis sector are acquiring other organizations to benefit from valuable specialist knowledge and skills.
  • Such deals allow vertically integrated value chains, as have also been applied in industries such as coffee production.
  • This comes amid wider growth in the sector, which is drawing substantial outside investment.

Youngevity International Inc. (NASDAQ: YGYI) (YGYI Profile) is following the vertically integrated model, having recently acquired a company specializing in cannabis processing machinery. Tilray Inc. (NASDAQ: TLRY) is expanding its Canadian production facilities through the acquisition of another grower. Budweiser brewer Anheuser-Busch Inbev (NYSE: BUD) (OTC: BUDFF) has partnered with Tilray to produce cannabis-infused drinks. In addition, tobacco companies are investing in the sector, providing extra funds for companies such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON). Specialist companies such as cannabis real estate finance company Innovative Industrial Properties Inc. (NYSE: IIPR) are also looking for entry positions in the industry.

To view an infographic of this editorial, click here.

Cannabis Companies Turn to Vertical Integration

As the global cannabis industry continues to grow — with North America taking a leading role — companies are eager to find ways to improve their productivity and stand out from the pack. A wide range of companies covering the production, processing, marketing, and sales of cannabis and cannabidiol (CBD) products are vying for a position in the space. So, what can give a company an edge?

Many are turning to vertical integration. By bringing together production, processing and distribution, companies can cut costs, improve efficiency and ensure quality control. It’s a strategy that has worked well in other parts of the economy, but can it work for cannabis?

Acquisitions for Growth

This all-under-one-roof strategy is definitely one that the management at Youngevity International, Inc. (NASDAQ: YGYI) believes in. A leading omni-directional lifestyle company, Youngevity has recently moved into the cannabis sector through investment in CBD.

CBD is one of two significant active ingredients found in cannabis. Unlike THC, which until a few years ago was the best-known of these chemicals, CBD is not psychoactive and does not deliver the highs or mental impairment that comes with THC. In addition, recent research has indicated that CBD could have a wide range of beneficial effects for health and well-being, leading to a burgeoning market for CBD products. This promising research, along with a growing popular acceptance of cannabis, has led to a resurgence in the growth of hemp — a variety of cannabis that can be rich in CBD but low in THC — and hemp-based products.

Youngevity entered this market last summer, with the launch of its Hemp FX product line, which includes products designed to soothe muscle pain and help consumers relax. This has provided a new product offering for a company that has already seen success with its hybrid model of direct selling, social selling and e-commerce.

To expand upon this opportunity, Youngevity has recently acquired Khrysos Global, a large hemp and CBD machine manufacturing company. Khrysos’s proprietary technology has been developed specifically to extract active ingredients from hemp and cannabis in order to provide the best possible yields from crops. The company also provides planning and consulting for cannabis companies looking to make use of technology in the extraction process.

“Our acquisition of Khrysos is extremely exciting on a number of levels,” said Youngevity CEO Steve Wallach. “Beyond the fact that Khrysos’ hemp-CBD extraction technology is far more efficient than most anything else on the market, we’re acquiring a turnkey business model here. Their systems are applicable to the entire industry and are immediately implementable across our own line of HempFX products as well as in offtake agreements we have through our existing business relationships. We see this as providing not only immense value to our company, but also to our investors–by selling not just the extraction systems, but also servicing and operating those systems via a rental model, they will provide us with continuous, ongoing profitability.”

Field to Finish

The acquisition is a natural move for Youngevity, not just because of the company’s interest in the hemp market but because of its established business model. This model, which the company refers to as “field to finish,” has been tested and proven through its CLR Roasters subsidiary.

CLR is invested in every stage in the coffee production process, from farming and green coffee distribution to roasting and sales of branded goods. Its vertically integrated model includes a plantation and dry-roasting facility in Nicaragua, established U.S. facilities and sales networks, and its own coffee brand. This comprehensive approach allows the company to control the entire process of coffee production from the field to the consumer’s cup, not only providing profit at every stage but ensuring the quality and the reputation of the company’s own products.

The acquisition of Khrysos and a 20 percent ownership stake in the Carolina Cannabis Company will allow Youngevity to establish a similar model in the cannabis sector. By taking ownership of the production, processing, branding and sales of CBD products, the company plans to profit from every stage in the process and ensure that its products are produced both efficiently and to the highest standards.

The acquisition brings the skills and experience of Khrysos’s technical and managerial staff in house at Youngevity, another critical advantage. The cannabis sector is still in its early days, and companies are regularly refining their processes the industry continues to evolve and grow. Having specialist knowledge about the equipment used in processing cannabis can only help the Youngevity optimize its processing systems, ensuring efficient manufacturing and a smooth supply chain.

Like any business savvy acquisition, this deal stands to benefit both the purchasing company and the one it is taking over. Youngevity’s scale and experience in reaching customers is designed to allow Khrysos’s technology to reach a wider market. Being part of a larger company provides an opportunity for Khrysos to expand, scaling up its equipment and advisory business.

“This is an exhilarating time for us,” said Dave Briskie, president and CFO of Youngevity. “This is just the first step Youngevity plans to take as we look to continue developing in the hemp-derived CBD industry. Right now, that industry is expanding so quickly that companies are struggling to keep up with demand. So acquiring the production capabilities of Khrysos, and adapting a creative model that allows us to upscale the usage of its technologies across our own properties and the properties of our partners — I feel — really stakes our claim within the industry at large.”

An Industry Expanding

Youngevity’s work represents only one part of a broader wave of expansion for the cannabis industry.

Canadian cannabis company Tilray Inc. (NASDAQ: TLRY) is among those using acquisitions to fuel growth. Tilray recently announced the pending acquisition of Natura Natural Holdings Inc., another Canadian company. Valued at C$70 million, this deal will increase Tilray’s growing space by 662,000 square feet, a significant expansion in an industry based around self-contained indoor agricultural facilities. An innovator in the cultivation, production and distribution of cannabis products, Tilray has has also established subsidiaries and affiliates in Europe, the Pacific, and Latin America, the latter through the recent establishment of Tilray Latin America SpA.

Like Youngevity, other companies with experience outside cannabis are now making moves into the sector. Anheuser-Busch Inbev (NYSE: BUD) (OTC: BUDFF), the brewers of the iconic Budweiser beer, is the latest in a series of beverage companies to make this move. The company has created a partnership with Tilray to explore the potential of cannabis and CBD-infused drinks. It’s a substantial deal, with each company planning to invest $50 million in the venture, and though it will initially be limited to the Canadian market, if the venture proves successful, the potential to grow in the Unites States is significant.

Tobacco companies are an obvious fit for the cannabis sector, which could provide them with an alternative revenue stream as health-conscious consumers turn away from tobacco. Altria, the company behind such famous brands as Marlboro and Benson & Hedges, has invested C$2.4 billion in Canadian cannabis company Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON). Canada is a good starting place for a company entering the cannabis market, thanks to the legalization of recreational cannabis in the country last October, but the investment in Cronos represents a broader opportunity. With business in Latin America, Europe, Australia and Israel, Cronos will provide Altria with access to a global cannabis market.

As well as attracting big players from the wider economy, the growth of the cannabis industry has supported the emergence of specialist companies within the sector, such as Innovative Industrial Properties Inc. (NYSE: IIPR). Founded in December 2016, Innovative Industrial Properties is a pioneering real estate investment trust that provides real estate capital for the medical cannabis industry. The illegality of cannabis at a federal level in the United States has made it hard for companies to acquire regular sources of funding, such as bank loans when buying property for cannabis production. There is therefore a substantial market for the company’s funding, and an opportunity for both sides to profit from such finance.

The growing cannabis market has produced companies specializing in many different areas. By bringing these specialties together, vertically integrated companies have a chance to increase profits and profit from this remarkable growth.

For more information on Youngevity, visit Youngevity International, Inc. (NASDAQ: YGYI)

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

CannabisNewsWire (CNW)
Denver, Colorado
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com

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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Cannabis Cultivators Profit from Growing Legal Market

CannabisNewsWire Editorial Coverage: The growth the legal cannabis market has created has turned cultivation facilities into invaluable assets.

  • The cannabis market is predicted to generate $146 billion in revenues by 2025.
  • Legal changes are accelerating this expansion in the United States and beyond.
  • Cultivation facilities are fundamental to this growth, providing the raw materials for the cannabis industry.

Cannabis Strategic Ventures (OTC: NUGS) (NUGS Profile) recently announced plans to establish a multi-acre cultivation facility in California to meet market demands. Tilray Inc. (NASDAQ: TLRY) is increasing its cultivation space through the acquisition of Natura Naturals Holdings. In addition, the need to equip cultivation facilities is fueling growth for hydroponic suppliers such as GrowGeneration Corp. (OTCQX: GRWG). Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) has issued a letter of intent to acquire Whistler in an effort to increase cultivation. Meanwhile, Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) is looking beyond North America, cultivating new markets in Europe.

To view an infographic of this editorial, click here.

Cannabis Cultivation Provides Prime Opportunity

The continuing growth of the cannabis industry has created a powerful investment opportunity around cultivation sites. These farms are the bedrock of the industry, producing the raw materials that are essential to both medical and recreational customers around the world. Given the balance of supply and demand, companies with cultivation sites can practically guarantee themselves a market for their product.

One of the reasons behind the high value of these sites is the continuing development of cannabis-friendly regulations. State and federal laws becoming more cannabis friendly, and as that happens, the industry appears destined for substantial growth.

Potential of the Cannabis Cultivation Market

The growth of the cannabis sector has led to the rise of companies such as Cannabis Strategic Ventures (OTC: NUGS), a holding company for cannabis industry start-ups and growth-stage enterprises that is moving into cannabis cultivation in Northern California. Such companies are keen to talk up the potential of the cannabis market, and unlike some other sectors, cannabis shows every sign of living up to the hype.

The global market for legal marijuana was valued at $9.3 billion dollars in 2016. By the end of 2025, the market is forecast to reach $146.4 billion. That’s staggering growth for an industry that didn’t even exist legally a mere 20 years ago and that has only recently started to attract substantial investor attention.

The largest part of the market is currently medical cannabis and cannabis-derived wellness products. Medical use provided cannabis with its foot in the door of the legal economy, thanks to its applications in providing pain and nausea relief, but the potential has exploded from there. Legalization has allowed better research into the effects of cannabis’ active ingredients, in particular tetrahydrocannabinol (THC) and cannabidiol (CBD). The plant is used in a wide variety of health and wellness products tailored to increasingly specific customer bases, such as Cannabis Strategic Ventures’ Fitamins brand, formulated to relieve muscle pain in athletes.

The breakthrough research is driving demand for cannabis in various forms. The plant itself can be preserved and smoked for medical and recreational effects. Plant derivatives are used in a wide range of pills and ointments. And CBD and THC oils can be vaped or used in even more products.

As it becomes easier for companies to legally process cannabis, these companies are exploring making cannabis edibles. The changes are even fostering a surge in the production of hemp, a variety of the cannabis plant that doesn’t contain high-inducing quantities of THC. And in addition to being used in the manufacture of CBD products, hemp is also used to make textile products.

Legal Changes for Cannabis

The societal clamor for access to cannabis’ derivative benefits is driving new waves of legislation, including the legalization of recreational cannabis in several U.S. states as well as countries such as Uruguay and Canada. Across the United States, 70 to 75 percent of the cannabis trade is reportedly still in the hands of criminals, while in states with legalization, only about 30 percent of the activity continues to be criminal, according to Grand View Research. The potential to reduce the income of criminals, increase tax revenue and tackle drug abuse through public health measures are all fueling a movement that could drive even more radical growth in the legal cannabis market over the next generation.

The wave of cannabis-friendly legislation has allowed companies such as Cannabis Strategic Ventures to get their businesses started and access a broad legal customer base. Other legislation has maintained a lower profile but is equally important for the industry. In December, the 2018 Farm Bill belatedly passed through Congress after months of negotiations. In the process, it lifted the ban on commercial hemp, making it far easier for cultivators to produce this form of cannabis.

Even in states where the cannabis industry is already legal, legislation is becoming friendlier towards the industry. The California legislature has proposed a temporary reduction in taxes for cannabis businesses to help them make inroads into the illegal industry. For California-based companies such as Cannabis Strategic Ventures, this is great news as it frees up capital for further expansion and provides the incentive to continue operating in a friendly state.

More Cultivation

Under the circumstances, venturing into production was a natural move for Cannabis Strategic Ventures. With the industry growing and the legal landscape looking friendlier than ever, the company is preparing to break ground on a major new cannabis cultivation site.

The six-acre site in Northern California — dubbed the NUGS Farm — will establish the company as a direct producer and position it to make the most of the potential the market has to offer.

“Establishing the NUGS Farm and securing these licenses are significant milestones for Cannabis Strategic Ventures,” said Simon Yu, CEO of Cannabis Strategic Ventures. “As the cannabis industry expands, and as we work to make cannabis legal on a federal level, Cannabis Strategic Ventures will be in position to touch on all areas of cannabis production.”

Though the main purpose of the farm will be to cater to Californian cannabis users, the largest market for the plant in the United States, the move is also a significant step toward wider operations.

“They say that the way California goes, the direction of the country goes,” added Yu. “We are optimistic that federal regulations will become more cannabis friendly in the near future and are excited for the positive impact it can have on our company.”

With more than 20 licenses for the cultivation, manufacturing and distribution of cannabis within California, Cannabis Strategic Ventures appears to be perfectly positioned to leverage opportunities within the state. In addition, these strategic moves may ideally prepare the company for expansion prospects throughout the rest of the country.

The Rise of the Cannabis Companies

The changing cannabis landscape has led to the emergence of several major players in the industry.

Many of the most important companies are based in Canada, where federal-level legalization and a large market for cannabis have made it easier for businesses to develop. Tilray Inc. (NASDAQ: TLRY) is one of the industry leaders, a pioneer in the cultivation, production and distribution of cannabis and its derivatives. With affiliates and subsidiaries in Europe, Australia, New Zealand and most recently Latin America through Tilray Latin America SpA, the company is developing a global presence. It is also expanding within Canada and has recently announced a pending acquisition of Natura Natural Holdings Inc., a multimillion deal that will give Tilray an extra 662,000 square feet of growing space.

The rise of cannabis companies is proving a boon for the suppliers of cultivation equipment as well, especially those specializing in hydroponics. Among those to profit is GrowGeneration Corp. (OTCQX: GRWG), a seller of hydroponic systems and the associated nutrients. Like Tilray, GrowGeneration has developed enough financial power to use acquisition as a route to growth. It recently obtained all the assets of Denver-based Chlorophyll Inc., increasing its influence across the United States.

Another of the big Canadian companies, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), has also demonstrated the importance of increasing cultivation space. A large part of the rationale behind its recently announced letter of intent to acquire Whistler was the desire to get hold of that company’s two production facilities. These facilities are expected to produce 5,000 kilograms of quality cannabis a year, providing Aurora an avenue to increase its market share.

Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) is looking beyond its immediate market. Though legalization is not as widespread in Europe as in North America, change is also expected there in the long term, and the company is positioning itself to make the most of this. It has established subsidiaries in the United Kingdom and Poland to make the most of the very different situations in those two countries. In Poland, the company has passed through a regulatory process that will allow it to import and sell its cannabis in the country for medical use. In the United Kingdom, where the door has only just opened a crack to the use of cannabis derivatives in the most extreme medical cases, the company has formed a joint venture with a local research group, placing Canopy Growth as one of the first cannabis companies operating in the United Kingdom.

The market for cannabis is expanding as attitudes and laws change. This momentum may drive a need for more product and thereby provide promising opportunities for companies with cultivation facilities.

For more information on Cannabis Strategic Ventures, visit Cannabis Strategic Ventures, Inc. (NUGS)

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

CannabisNewsWire (CNW)
Denver, Colorado
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com

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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Companies Explore Market Potential for Ready-to-Drink CBD Beverages

CannabisNewsWire Editorial Coverage: The market for cannabidiol (CBD) beverages alone could achieve a value of $260 million in the United States by 2022. CBD beverages form part of an even wider market for marijuana-infused drinks that is predicted to reach a value of $600 million in three years’ time.

  • U.S. market for CBD and THC beverages could reach $600 million by 2022.
  • Cannabis-infused drinks could outperform other cannabis products.
  • Non-cannabis and cannabis companies alike are joining this new market.

Savvy companies are looking to position themselves in this burgeoning market, often by partnering with companies that provide invaluable experience in the sector. Youngevity International Inc. (NASDAQ: YGYI) (YGYI Profile), an established omni-direct lifestyle company, has formed a cross-marketing agreement with a bottled spring water company, which will see the pair develop new products including a ready-to-drink CBD beverage. Tilray Inc. (NASDAQ: TLRY) is partnering with the world’s largest brewer in a $100-million joint venture to research cannabis-infused nonalcoholic drinks. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) recently received a $4 billion investment from a leading beer maker. Other companies are looking to grow in additional cannabis spaces. Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) recently received a license from Health Canada permitting the sale of cannabis softgel capsules. And GW Pharmaceuticals (NASDAQ: GWPH) announced that its FDA-approved anti-epileptic drug is now available in the United States.

To view an infographic of this editorial, click here.

Injecting Growth into Product Portfolios

Recent reports by Canaccord Genuity indicate that cannabis and CBD-infused beverages have the potential to outperform cannabis products, reaching up to 20 percent of the market for cannabis-containing consumables by 2022. “While these trends represent a significant opportunity for U.S. cannabis companies, they have not gone unnoticed by large mainstream beverage players looking to inject growth into their product portfolio,” said Canaccord analyst Bobby Burleson, who also predicts that ready-to-drink CBD beverages will form part of the growing market for wellness drinks.

Indeed, a number of U.S and Canadian pharmaceutical, cannabis, beverage and even lifestyle companies have developed or are planning to develop CBD-infused beverages. These developments often begin with, or result in, new partnerships.

Joining Forces to Share, Build and Develop

Youngevity International Inc. (NASDAQ: YGYI) has entered an exclusive cross-marketing agreement with Icelandic Glacial™. The agreement includes plans to develop new products including CBD drinks in order to extend the market for Youngevity’s lifestyle brands and Icelandic Glacial’s market reach.

Icelandic Glacial bottled water will be added to Youngevity’s roster of health, wellness, food and beverage brands. Owned by Icelandic Water Holdings and registered in Iceland, the Icelandic Glacial brand offers water that comes from the naturally alkaline spring Ölfus Spring, has a low mineral content and is certified CarbonNeutral®.

Youngevity and Icelandic Glacial have agreed to partner for three years. Icelandic Glacial bottled water will be sold alongside Youngevity’s direct selling supplements, including 90 for Life, CBD products, pet supplements and the coffee holdings of Youngevity’s wholly owned subsidiary, CLR Roasters. During the three-year period, Youngevity will not promote any other bottled water, and Icelandic Glacial will not promote any other supplement businesses or products.

“With its rare, naturally occurring, high-pH level, low-mineral content, and unique lava rock filtering system — as well as its positioning as the world’s first CarbonNeutral bottled water company — Icelandic Glacial is perfectly positioned to serve not only customers who want a pure-tasting water that makes them feel and perform their best but also eco-friendly consumers who want to make sure their money goes to brands with a conscience,” said Steve Wallach, CEO of Youngevity International Inc.

Youngevity will use its marketing and multilevel marketing expertise to help Icelandic Glacial build its brand and reach new customers in the United States and around the globe. In return, Icelandic Water Holdings plans to introduce its customers to Youngevity’s health and nutrition products. Icelandic has a 14-year history of serving health and quality-conscious consumers while building a brand known for purity. The company has a completely sustainable operation fueled solely by geothermal and hydroelectric power. Icelandic Water is committed to reaching a target of net-zero greenhouse gas emissions.

Entering the CBD Product Market

The development of a ready-to-drink CBD beverage will be the first of the partnership’s potential new products. Future ideas may include possible special products for a range of markets based on CBD and other life-enhancing supplements.

Youngevity first entered the $7.7 billion cannabis industry with the introduction of its Hemp FX™ brand in October 2018. The new product line includes three blends of hemp-derived cannabinoid oil products: a topical cream, softgel capsules and a relaxing sleep oil. Each formula contains organically grown hemp-derived cannabinoids combined with Youngevity signature nutrients.

“Hemp-derived cannabidiol aligns with what we do very well,” said Wallach. “We’ve taken what we know about essential nutrients, along with decades of knowledge specializing in natural, plant-based nutrition and their most beneficial nutrients, and put that knowledge to work to develop high-end cannabidiol products.”

Youngevity operates a hybrid direct-sales business model combined with e-commerce and social selling to deliver a virtual main street of products and services under one entity. Its entire range includes products from eight top-selling retail categories including health/nutrition, home/family, food/beverage (including coffee), spa/beauty, fashion, essential oils and photo.

A Global Market Worth $22 Billion by 2020

Reports suggest the entire hemp-derived CBD market will hit $22 billion globally by 2022. Much of the focus on CBD-infused products and drinks is towards the healthy lifestyle consumer market. However, more big brand beverage companies are expected to enter the industry and create CBD-infused non-alcoholic beverages for a broader spectrum of consumers. CBD-focused developments and partnerships are likely to increase as industry regulation becomes clearer.

For example, medical cannabis company Tilray (NASDAQ: TLRY) announced a research partnership with Labatt Breweries parent company AB InBev to explore the potential of THC- and CBD-infused non-alcoholic beverages. This partnership will be limited to Canada, with Tilray participating through its Canadian adult-use cannabis subsidiary. The partnership calls for each company investing up to $50 million in the project.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) continues to benefit from a massive multibillion-dollar investment by Corona-beer maker Constellation Brands. The move will extend the collaboration from the development of cannabis-based beverages to co-developing products across a complete range of cannabis extracts. It also allows Canopy Growth to build scale in the more than 30 countries considering legalization of medical cannabis and establish essential infrastructure required to supply new recreational adult-use markets.

After obtaining the required licensing, Aurora Cannabis (NYSE: ACB) (TSX: ACB) has commenced shipments of cannabis softgel capsules for both the Canadian medical and adult-use markets. The company expects to start exporting to international markets early this year. Aurora intends to make its smoke-free softgel product available to all of its domestic and international target markets over time where legally possible. “Softgels are a high-volume, high-margin product for both the medical and adult-use markets that are in strong demand, and Aurora is one of few companies making these products available to patients and consumers alike,” said Aurora CEO Terry Booth.

Apart from cannabis-infused beverages, GW Pharmaceutical’s (NASDAQ: GWPH) product EPIDIOLEX is the first FDA-approved CBD oral medicine available by prescription in the United States for the treatment of seizures associated with Lennox-Gastaut syndrome or Dravet syndrome in patients two years of age or older. Its Sativex brand was the first-ever natural cannabis plant derivative to achieve market approval.

For more information on Youngevity, visit Youngevity International, Inc. (NASDAQ: YGYI)

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

CannabisNewsWire (CNW)
Denver, Colorado
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com

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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

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

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

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

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

To view an infographic of this editorial, click here.

California’s Pot Power

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

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

Cultivation Operations

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

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

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

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

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

Licensing Issues

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

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

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

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

Light at the End of the Tunnel

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

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

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

The Bigger Cannabis Picture

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

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

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

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

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

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

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

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

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www.CannabisNewsWire.com
303.498.7722 Office
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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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Hemp Industry Sees Profitable Harvest as Farm Bill Approaches Finale

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

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

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

To view an infographic of this editorial, click here.

Hemp Rides High on Wave of Change

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

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

Fighting over the Farm Bill

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

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

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

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

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

Hemp Heads into the Mainstream

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

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

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

Rising Hemp Revenues

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

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

Expanding the Hemp Harvest

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

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

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

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

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

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

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

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

CannabisNewsWire (CNW)
Denver, Colorado
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com

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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Cannabis Cultivation Powering Growth for the Industry

CannabisNewsWire Editorial Coverage: Cultivation by both large and small growers is powering growth across the cannabis industry.

  • Cultivation is fueling the growth of the cannabis industry.
  • $718 million was invested in cultivation and retail last year as the industry continued to grow.
  • Raw materials from cultivators are used in a wide range of cannabis products.
  • Cultivation locations are critical to distribution channels and partnerships.

Within this growing industry, Cannabis Strategic Ventures (OTC: NUGS) (NUGS Profile) is working to foster emerging brands by targeting investment through a la carte partnerships and acquisitions. Tilray, Inc. (NASDAQ: TLRY), one of Canada’s largest cultivators, has seen earnings rise 78.9 percent so far this year thanks to growing demand and a maturing business. Cultivation means profits for hydroponics suppliers such as GrowGeneration Corp. (OTCQX: GRWG), which provides the materials growers need. Some companies are working to stand out through branding, such as the feel-good ethos of Charlotte’s Web Holdings, Inc. (OTCQX: CWBHF) (CSE: CWEB). Others, such as Aurora Cannabis, Inc. (NYSE: ACB) (TSX: ACB), are working with local authorities to reach new customers.

To view an infographic of this editorial, click here.

Cannabis Cultivation

When economic historians look back on the early 21st century, the cannabis industry will likely feature prominently in conversations. The industry, which has operated in the black market since the turn of the millennium, has grown to a revenue cap of over $9 billion in the United States alone, with an expected value of $47.3 billion by 2027. From retail outlets to research groups, edibles, technology, vaping liquids to health supplements, cannabis has become a diverse and powerful industry.

Underlying it all is cultivation. As much the work of craft businesses as of big corporations, cultivation supplies the plants without which none of the rest would be possible. Licensed growers are providing the materials needed to drag cannabis profits away from funding crime and turning them into a legal, taxable, sustainable industry.

Cultivators make the cannabis industry possible.

The Growth of Cultivation

Cannabis cultivation is hardly a new activity in the United States, but a legal, corporate-fronted version of it is. Since the first medical legalization in California in 1996, many respectable growers have sprung up, whether as new businesses entering the emerging market or as once-clandestine farmers turning their previously illegal operations into law-abiding producers. In today’s cannabis environment, many corporate-fronted companies, such as Cannabis Strategic Ventures (OTC: NUGS), are eyeing small to large commercial cultivation as part of their business model.

This interest of Cannabis Strategic Ventures shows how quickly cannabis cultivation has acquired the trappings of a legally established industry. As a publicly traded company that incubates, develops and partners with brands, Cannabis Strategic Ventures is a sort of meta-business that emerges in sophisticated markets — bolstering the development of production, services and retail through its application of business acumen and strategically applied capital.

It’s not surprising that such companies are engaging with cannabis cultivation. Investment in cannabis cultivation and retail reached $718 million last year as investors were increasingly drawn to this growing and profitable market. Looking ahead, the trend shows no sign of declining.

Cannabis cultivation is a specialist form of agriculture, requiring an understanding of hydroponics, plant strains and environmental factors that affect the potency of crops. Acquiring those skills hasn’t been easy, especially given how long the industry operated in the shadows, its techniques and collective knowledge shared only through illicit channels. As cultivation takes off, the industry needs the support of companies such as Cannabis Strategic Ventures to acquire equipment, train staff and build facilities to meet the demand of a growing customer base.

Cultivation is fundamental to the market, so the sector is a natural target for investors looking to ensure a lasting place in the cannabis industry. Cannabis Strategic Ventures is actively seeking out cultivation facilities with existing infrastructure to speed up its move into cultivation. This initial step provides a foundation upon which much bigger moves can be built.

Building on the Foundations of Cultivation

Growers aren’t just selling the plants as the dried or refined forms of cannabis that users have been consuming for decades. With legality, cultivators have experimented with different ways cannabis can be used. Much of the plant is still sold for smoking, but some of the valuable crop is turned into products such as vaping liquid, oils, capsules, drinks and other consumables. Cannabidiol (CBD) and hemp phytocannabinoids, nonpsychoactive chemicals that appears in cannabis alongside the high-inducing THC, have become the core ingredient of a range of products as research and design departments find ways to use it for health, well-being and relaxation.

The range of brands in the Cannabis Strategic Ventures portfolio reflects this varied approach to cannabis and its derivatives through commitments in category leaders in the space. None of these brands would be possible without the cultivation of cannabis plants. Bringing cultivation under the same umbrella as the products will offer opportunities for improved efficiency and profitability. By sourcing cannabis from its own facilities, Cannabis Strategic Ventures should be able to achieve vertical integration in the supply chain, which naturally leads to greater certainty over the supply of raw materials and increased efficiencies into the system, likely cutting costs and improving the timeline from cultivation to shelf.

The growth of cannabis cultivation has led to a boom for support services as well, such as the provision of staff and hydroponic equipment. Here, too, efficiencies can be realized through vertical integration as cultivators work more closely with their suppliers.

This is yet another way Cannabis Strategic Ventures may benefit if cultivation is brought in-house. As the owner of BudHire, a subsidiary specializing in cannabis industry recruitment, the company looks to be in an ideal position to source the most skilled staff for its facilities.

Cultivation in California

Geography makes a big difference to U.S. cannabis companies. The industry isn’t legal in every state, and among those that have legalized, the laws vary substantially from state to state, as do market sizes. Given the challenges of working across state lines without federal legal reform, being based in the right location can be critical.

Cannabis Strategic Ventures is headquartered in Los Angeles and benefits from easy access to the oldest, largest and most complex legal cannabis market in the United States. Many growers in California are now trying to transition from the black market to the legal one, but the move can be challenging. Volumes of cannabis that could have been sold for $3,000 illegally go for a fifth of that price now. Growers must pay taxes and work within well-defined regulations. Working with firms such as Cannabis Strategic Ventures, which offers essential financial and intellectual capital, can help a grower make the transition more successfully.

Being located in California, therefore, provides two significant advantages for a company such as Cannabis Strategic Ventures. On one hand, the state has a large consumer base for the company’s products and services. On the other hand, it has a plentiful supply of small companies looking for financial support, creating opportunities for growth through mergers, acquisitions and partnerships.

Colleagues and Competitors in Cultivation

Cannabis Strategic Ventures is not alone in its interest in this promising industry. An impressive variety of companies are now cultivating cannabis.

Tilray, Inc. (NASDAQ: TLRY) is one of the largest cultivation companies in Canada, a country with a fast-growing and well-regulated market. A global pioneer in production, distribution and research in the cannabis market, Tilray was the first licensed producer of medical cannabis in the world to have its facility Good Manufacturing Practices (GMP)-certified in accordance with European Medicine Agency (EMA) standards. Its recent earnings report reflected the extraordinary growth being experienced by well-run cannabis companies, with an 85 percent rise in revenue in the third quarter and a 78.9 percent rise for the year to date. With recreational cannabis having just become legal in Canada, this growth is likely to continue that increase over the next few years.

The growth of such companies has provided a boost for GrowGeneration Corp. (OTCQX: GRWG), a supplier of hydroponic systems and the nutrients used with them. Like Cannabis Strategic Ventures, GrowGeneration has been acquiring other companies to expand its presence within the market. It also has an eye on reaching different market sectors. The company recently established the GrowGeneration Hemp Corp subsidiary to market its products to hemp farms and GrowGeneration Canada to sell to Canadian cultivators.

In this booming market, branding is crucial to help companies stand out from the pack. Charlotte’s Web Holdings, Inc. (OTCQX: CWBHF) (CSE: CWEB) is winning over customers with the feel-good factor as a company committed not just to sales but to improving the planet and people’s lives. Given the correlation between cannabis use and liberal values, adopting such a strong identity seems to be bringing the company success.

For Aurora Cannabis, Inc. (NYSE: ACB) (TSX: ACB), the recent focus has been on reaching new customers. As a Canadian company, Aurora is looking to profit from the country’s legalization of recreational cannabis in mid-October this year. The market is regulated on a regional basis, so Aurora has been busy setting up agreements with local authorities to give it a strong reach across the country and even stretching into international markets.

With revenues rising and markets growing, cannabis cultivators are seeing a period of great expansion, making the growth of a whole industry possible.

For more information on Cannabis Strategic Ventures, visit Cannabis Strategic Ventures, Inc. (NUGS)

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

CannabisNewsWire (CNW)
Denver, Colorado
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com

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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Cannabis Industry Stays in Spotlight with Ongoing Developments

CannabisNewsWire Editorial Coverage: Profitability and more widespread legality are drawing fresh investment to the cannabis sector.

  • Major investors and outside companies are putting big money into cannabis.
  • Undervalued companies provide good opportunities for new investors in the sector.
  • Following the legalization of recreational cannabis in Canada, companies in the United States are seeing even larger market caps.
  • As attitudes change, more cannabis companies are expected to soon be listed on major U.S. exchanges.

With a strong pick-and-shovel strategy alongside recent direct investment in cannabis, Generation Alpha, Inc. (OTCQB: GNAL) (GNAL Profile) is among the cannabis companies seeing good growth. Tilray, Inc. (NASDAQ: TLRY) is moving to benefit from fresh investor interest through public offerings in Canada and the United States. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has benefited from a substantial investment from Constellation Brands, Inc. (NYSE: STZ), the result of a trend in which U.S. alcohol and tobacco companies eye up cannabis. The industry’s upward trend is also reflected in the soaring revenues of Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON).

To view an infographic of this editorial, click here.

The Mainstreaming of Cannabis

A state-legal cannabis industry has existed in North America for more than 20 years. Since the legalization of medical marijuana in California in 1996, the industry has spread at a growing rate. The majority of U.S. states now allow its sale for medical purposes. One-fifth of the states, plus all of Canada, have legal recreational cannabis markets. Yet the cannabis industry remains on the fringe of the American economy, largely separate from the work of mainstream businesses and investors.

That’s now changing. Growing numbers of investors are putting money into cannabis, cannabis companies are able to raise substantial capital for growth initiatives, and large enterprises have taken an interest in cannabis-focused ventures with a view to establish partnerships and make investments. With these changes, cannabis becoming fully integrated into financial markets appears to be a logical next step.

The Acceptable Face of Cannabis

Over the past few years, the cannabis industry has seen growing acceptance of its place in society and the economy. This is due in no small part to the professionalism of the companies working in the sector, including companies such as Generation Alpha, Inc. (OTCQB: GNAL).

Generation Alpha started out as a support provider for the cannabis industry, taking a basic supply approach to the business. A vertically integrated technology innovator, the company developed, manufactured and distributed products and solutions for cannabis growers, which were springing up across the United States. As a supplier of horticultural and lighting equipment, GNAL provided essential supplies that cannabis cultivators relied on to grow their businesses.

Generation Alpha has seen rising investment in its organization. As recently as April, it announced a $25 million in investment from an existing shareholder under its previous name of Solis Tek. Other cannabis companies have also seen substantial investments over the past year.

The most practically and symbolically significant is the investment of $4 billion in Canadian company Canopy Growth by American beverage giant Constellation Brands. Not only does this move represent a huge financial boost for the company, but it also signifies an important moment for the entire industry. This massive investment from a beverage manufacturer reflects the growing interest of tobacco and alcohol companies in cannabis and their willingness to risk money in a relatively new industry, possibly signifying a bigger wave of change coming down the line.

Undervalued Assets

There’s a marked disparity between Constellations Brands’ investment in the sector and that recently received by Generation Alpha and other cannabis brands. The reason is likely because Constellation has recognized what others have not — many cannabis companies may be undervalued.

It’s hard to judge the value of assets in an industry that’s going through such big changes. But looking at the fundamentals, it’s easy to spot places where value may not yet be recognized.

Generation Alpha’s move into cultivation and processing of cannabis is an example of this. The company recently acquired a cultivation and processing facility in Phoenix, Arizona. GNAL is using its experience in the support side of the industry to turn this 70,000-square-foot space into a technologically advanced growing facility. With the site scheduled to become operational in the first half of 2019, the profit from this is decision should soon be realized.

The recent legalization of recreational cannabis in Canada this October showed the stark imbalance between supply and demand in the cannabis market. Within weeks, the country was facing a cannabis shortage as consumers rushed to enjoy a legal high. Similar patterns are likely to play out in U.S. states as legalization — whether for medical or for recreational purposes — spreads across the country. If, as many expect, U.S. Attorney General Jeff Sessions’ departure leads the Trump administration to a more liberal stance, then rising demand is even more likely, ensuring both an eager market and a good price for the product coming out of Generation Alpha’s facility.

And then there’s the long view. Big businesses now have a vested interest in cannabis. This interest will naturally lead to heavier lobbying for reform of anti-cannabis laws; not just in the United States, but around the world. The next decade will likely be a time of huge global growth for the industry, thanks to social and political change. The value of companies such as Generation Alpha could grow significantly as these pioneering cannabis companies set their sights on becoming the backbone of a mature global industry.

The Canada Effect

Events in Canada provide the surest signs of the coming shift.

As the first G8 country to legalize recreational cannabis, Canada is setting an example for the world, converting cannabis consumption from a drain on law enforcement into an asset that provides tax income for the government. The change hasn’t just affected Canadian companies; it has also touched those in the United States, including Generation Alpha. Both north and south of the border, the market cap for cannabis has grown as investors strategically place their money into the burgeoning industry.

Canada is now leading the way in cannabis. While it might take time for the United States to catch up at a federal level, American companies are already feeling the benefits.

Onto the Exchanges

All this growth means more companies listing on major markets. Together with a broader social shift in attitudes towards cannabis, a change at the top of the economy is extremely likely. As the power of cannabis companies grows, it’s surely only a matter of time before major U.S. exchanges add more American cannabis companies. With that, these companies will be able to tap into even more resources through the finance of major investors. And once the inconsistency between federal and state law is addressed, major banking will add another route to funds.

Companies with strong, proven strategies will be best placed to benefit from this surge in funding. With its core pick-and-shovel strategy, Generation Alpha fits the bill. By supplying goods and services to cannabis growers, GNAL will be ideally positioned to profit from the growth while keeping a buffer between its core business and shifts in the price of cannabis. With innovations such as its high-efficiency LED lighting system, the company will be a strong competitor among other cannabis support companies.

One of the companies looking to turn cannabis’ credibility into financial resources is Tilray, Inc. (NASDAQ: TLRY). A prominent provider of medical marijuana, Tilray has used a well-developed research and design program to gain an edge in the fast-growing industry. It’s currently using public offerings in Canada and the United States to seek fresh funds from investors, but its ambitions aren’t limited to North America. The company has customers on five continents, thanks to the growing international acceptance of medical cannabis.

Through early moves in the sector, Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has established itself as one of the big names in Canadian cannabis. Working both alone and in partnership with others, Canopy Growth has evolved into a multifaceted company with a strong investment in brand and product differentiation.

Canopy Growth Corp. made news earlier this year when it received a second substantial round of investment from U.S. beverage company Constellation Brands, Inc. (NYSE: STZ). That $4 billion investment has made Constellation Brands a substantial shareholder in Canopy Growth, owning a third of the company. The investment was a major coup for the cannabis company, giving it the sort of resources that most of its competitors only dream of. But it may also prove to be an important moment for Constellation Brands, as it adds cannabis and cannabis-infused products to its repertoire of alcoholic drinks.

As tobacco and alcohol companies look for ways to deal with their own falling sales, it’s likely that a growing number will turn to cannabis, providing fresh investment for the market. When they do, there will be plenty of strong options. The growth of medical and recreational markets has led to impressive revenue growth for companies. For example, Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) saw revenues increase by 186 percent in the third quarter of 2018. By partnering with other businesses, increasing its cultivation space, and getting involved in the Latin American cannabis market, the company has been able to keep expanding its operations.

Big money is flowing into the cannabis industry. As its prestige rises, those funds are set to keep growing for a long while yet.

For more information on Generation Alpha, visit Generation Alpha, Inc. (OTCQB: GNAL)

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

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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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.

Cannabis Boom Fuels Mergers and Acquisitions in Hydroponics and Beyond

CannabisNewsWire Editorial Coverage: The rapid growth of the cannabis sector is pushing companies to innovate expansion strategies.

  • Among the companies affected are hydroponics suppliers, which sell vital equipment to cultivators.
  • Hydroponics companies, like others in cannabis, are using mergers and acquisitions to benefit from a bullish market.
  • A recent trade show in Las Vegas saw companies on the hunt for future acquisitions.
  • Other companies are seeking outside investment or partnerships to increase their presence.

Hydroponics supplier Sugarmade, Inc. (OTCQB: SGMD) (SGMD Profile) has leaned into the current trend for mergers, with a big acquisition and open plans for future growth. Tilray, Inc. (NASDAQ: TLRY) is focusing on research and design, using public offerings to finance this work. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has gained $4 billion in investment from a beverage company, an investment some believe will lead to a takeover. Both Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) and Aphria (NYSE: APHA) (TSX: APHA) are relying on diverse strategies, including external partnerships, as they look to grow and succeed in the cannabis sector.

To view an infographic of this editorial, click here.

The Industry Behind the Industry

The cannabis industry is experiencing a period of staggering growth, with commentators predicting that it will reach a global value of over $146 billion by the end of 2025. With so much of the industry based on indoor cultivation, hydroponics companies that provide the equipment and nutrients needed to cultivate cannabis have also seen significant growth. As cannabis cultivation increases, so does demand for hydroponics products, so that the fates of the two industries are increasingly tied together.

Given their close relationship, it’s not surprising to see patterns in the broader cannabis sector reflected in the hydroponics industry. A recent surge of mergers and acquisitions among cannabis companies includes a number of moves involving hydroponics companies as players within the industry seek growth while outsiders look for a way in. With a big cannabis trade show coming up in Las Vegas, executives from hydroponics companies will be eyeing up the competition and contemplating who they might buy next.

Mergers, Acquisitions and Hydroponics

Hydroponics companies such as Sugarmade, Inc. (OTCQB: SGMD) are essential to the cannabis industry.

While cannabis can be grown outdoors, almost everything about the current industry drives producers away from this method. Indoor facilities are more secure, an important factor when producing a high-value, high-demand crop prized by criminals. Indoor cultivation also provides far greater control over the conditions in which the cannabis grows, as well as over the quality of the plants grown. Lighting, water, nutrients and temperature all affect the final outcome of the plants, including the quantity of active ingredients in them. High-quality hydroponic equipment, like that supplied by Sugarmade, gives growers control over the forces affecting their cannabis crop.

This control is becoming increasingly important as the cannabis market grows. Customers may be more forgiving of varying quality when companies are small or their product is hard to obtain. But as companies grow and supplies become more consistent, people expect consistency and quality — things that are harder to provide without hydroponics.

The growing number of companies in the sector also means that competition for customers is growing. Companies are racing to create crops with higher dosages of tetrahydrocannabinol (THC) and cannabidiol (CBD), the most significant active ingredients in cannabis. The more powerful the plant, the more customers will return, creating a strong brand loyalty. Again, hydroponics can be an essential piece of this success.

Demand for hydroponics has led to swift growth for Sugarmade, which expects 500 percent growth in revenue for the fiscal year ending in 2019. One of the ways in which Sugarmade is meeting growing demand and achieving these impressive results is through acquisitions.

Mergers and acquisitions are an obvious route to growth for companies in a maturing sector, and in the past year, that’s what many cannabis companies have chosen to do. The first half of 2018 saw 145 mergers and acquisitions in the sector, compared with 79 for the same period the previous year. Some of the pioneers who created cannabis startups in the early days of the industry are cashing out, making way for a field of larger, established companies.

Now caught up in the wider patterns of the cannabis market, hydroponics is heading down the same path. With its latest acquisition of Sky Unlimited LLC, Sugarmade has been one of the leaders in this trend. The cash and shares deal, worth $40 million, will give Sugarmade control of AthenaUnited.com, an online outlet providing a range of hydroponic equipment.

“This acquisition will further boost our already very rapid growth rate and is expected to be high accretive to common shareholder value,” said Sugarmade CEO Jimmy Chan. “Sky Unlimited and Athena are complementary to our existing business operations, allowing us to not only increase our emphasis on brands but also to diversify our revenue streams to now include the larger commercial cultivation operations.”

Cannabis Goes to Vegas

Sugarmade was on the hunt for more acquisitions as its team headed to Las Vegas for MJBizCon.

One of the cannabis industry’s largest trade shows, MJBizCon took place November 14–16 at the Las Vegas Convention Center. Investors, entrepreneurs and professionals from across the sector headed to Vegas for three days of talks, meetings and the sort of networking that dominates any trade show.

This year’s show had a record number of attendees and exhibitors, reflecting the huge growth that the industry has seen. Some 25,000 attendees met up and discussed topics such as the latest industry trends and how to navigate the difficult waters of regulatory compliance.

One  prominent item on the agenda was the move by bigger players into the cannabis market. Beverage and tobacco companies are eyeing cannabis as an alternative revenue stream, with some striking early partnerships with cannabis businesses. To survive in the face of these big money competitors, businesses will have to grow — one of the motivations behind Sugarmade’s acquisition strategy. There’s still space for small fish in the cannabis pond right now, but that space is shrinking.

MJBizCon provides fertile territory to lay the groundwork for acquisitions. There, companies can make contacts, seek investments and demonstrate their value. It’s a perfect venue to attract acquisition targets and start negotiations.

So it was a full-press court for Sugarmade at the event, as the company set out to continue its successful growth strategy. Though this year’s moves have already given it a competitive edge, Sugarmade is always looking to strengthen its foothold and further establish its position as an industry presence.

“Over the past year, we have significantly enhanced our operational staff and our internal systems preparing for our rapid growth,” Chan said in a recent statement. “With these changes, we believe we are optimally sized, but we want to ensure we are able to manage our aggressively planned growth rate.”

Big Moves for Big Profits

Other companies are also making bold moves to profit from the growth of the cannabis sector.

While expansion is critical to surviving in this fast-changing environment, mergers and acquisitions aren’t the only answer. Tilray, Inc. (NASDAQ: TLRY) is instead focusing on its well-developed research and design program to place it ahead of competitors. A leading medical marijuana company, Tilray has established a prominent position in the North American healthcare market. But it’s also looking beyond the United States and Canada as the cannabis industry goes increasingly global. With customers on five continents, Tilray has become an international cannabis business, and one still set on expansion. The company is using its public offerings in the United States and Canada to gain additional finance that will fund ongoing growth.

Canopy Growth Corp. (NYSE: CGC) (TSX: WEED), one of the biggest cannabis companies in Canada, is financing its expansion through a connection outside the industry. The company struck a deal with Constellation Brands, the major U.S. beverage company behind brands such as Corona. The deal has seen Constellation acquire more than a third of the shares in Canopy Growth in return for $4 billion in investment. It’s the biggest move so far by outside businesses into the cannabis sector and likely an omen of things to come. Many are predicting that this will lead to Canopy Growth’s eventual absorption under the Constellation umbrella, once cannabis becomes a big enough market to deserve more of the beverage giant’s attention.

Growth in the industry has been good for Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), whose revenues were up 186 percent in its third-quarter reporting this year. Increased cultivation, a partnership with Ginkgo Bioworks on cultured cannabinoids and a move into Latin America are all part of the company’s announced plans to continue its expansion. By following a diverse range of growth tactics, Cronos is solidifying its position as a significant international player.

Collaboration with other companies is also part of the strategy for Aphria (NYSE: APHA) (TSX: APHA). The company has formed a joint venture with Perennial, Inc., to develop products for the Canadian cannabis market, currently one of the most significant cannabis markets in the world. Such collaborations are allowing companies to achieve more together than they could alone and perhaps survive in the face of larger competitors.

With the cannabis industry growing at a dramatic rate, both cultivators and the companies that supply them will have to find ways to increase their impact if they want to beat the competition.

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

About CannabisNewsWire

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

Receive Text Alerts from CannabisNewsWire: Text “Cannabis” to 21000

For more information please visit https://www.CannabisNewsWire.com and or https://CannabisNewsWire.News

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

CannabisNewsWire (CNW)
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www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com

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.

The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.

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

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW undertakes no obligation to update such statements.