Outside Investment, New Technology Support Growing Cannabis Industry

CannabisNewsWire Editorial Coverage: Revolutionary innovations and advancements within the cannabis industry are drawing significant investment from big corporations.

Technology currently in development will make it easier to consume active ingredients in cannabis.
Advances have attracted investment for the technology’s use in tobacco as well as cannabis.
These improvements could move consumers to healthier forms of consumption than smoking.

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) (LXRP Profile) has benefited from recent investment by Altria to support its innovative research and design work. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has received substantial investment from a beverage company, which will support the development of cannabis drinks. Within the sector, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) is in the process of acquiring an organic grower. Outside investment is bolstering Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), a cannabis company with global reach. And another innovator, GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF), has run successful trials on a new drug to tackle a form of childhood epilepsy.

To view an infographic of this editorial, click here.

Finding Funds for Cannabis

The quest for finance is important in any industry, but for cannabis businesses, which are going through a period of impressive growth thanks to legal and social changes, this need for money is particularly time sensitive. Those who find substantial funding now may be in the best position to expand in the growing market.

Only a select few companies in the cannabis industry have successfully attracted capital from — and built relationships with — Fortune 500-type corporations. Though cannabis is growing, the sector is still relatively small compared with those big names, and the perceived reputational issues can be a deterrent. Even among cannabis companies that have drawn big money, few have established a partnership allowing them to retain control, much less receive money in return for license rights and minority ownership in a subsidiary. Instead, most of these companies aim to be bought out by bigger businesses.

But there have been exceptions.

A Better Deal for a Cannabis Company

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) is an example of one company that has built a big funding deal on its own terms.

Biotech company Lexaria is perhaps most known for its DehydraTECH technology, a revolutionary system for processing molecular compounds to make them more suitable for human consumption. Applicable to molecule such as THC and cannabidiol, the active ingredients in cannabis, the technology makes these compounds taste better, increases the body’s ability to absorb them, and speeds up their impact on the body. Together, these changes can increase the efficacy of both medical and recreational drugs.

To provide the funding for further work on this technology, Lexaria has struck a deal with industry giant Altria, which will cover the use of DehydraTECH to deliver nicotine.

The milestone deal is between Lexaria Nicotine LLC, a wholly-owned subsidiary of Lexaria, and a subsidiary of Altria, Altria Ventures Inc. Under the terms of the agreement, Altria will initially provide $1 million of finance towards a Lexaria research and development program, with the option for funding of up to $12 million.

Unlike so many other deals in the biotech sector, the partnership won’t see Altria gain any ownership over Lexaria itself. Instead, the company will receive minority ownership of the Lexaria Nicotine subsidiary, with the option to increase its stake in that company through multiple phased private financings. Lexaria retains its independence while benefiting from the money that big tobacco can provide. Critically, Lexaria’s shares have not been diluted by this fresh source of finance.

In addition to a minority stake in Lexaria Nicotine, Altria has received a license to use DehydraTECH technology in oral nicotine delivery products, on an exclusive basis in the United States and a nonexclusive basis elsewhere in the world. This will provide Lexaria with a new revenue stream, as it is slated to receive royalties for any DehydraTECH products Altria launches. The impact on Lexaria’s financial statements of a Fortune 500-derived royalty stream could be significant.

Tobacco companies are eagerly searching for alternatives to traditional cigarettes, to reduce their damaging impact on health and the reputational damage this brings. These factors give Altria a strong motive to develop products using DehydraTECH, providing profits for Lexaria and demonstrating the potential of DehydraTECH to other interested parties.

Starting with a $1 million stake might seem small compared with other big headline deals. But by gaining Altria’s buy in without selling any part of its main company, Lexaria has struck a profitable balance between raising finance and retaining its independence. It’s a unique transaction that other cannabis companies haven’t been able to achieve.

Applying the Technology

Though this recently announced deal is about tobacco, Lexaria’s attention is very much on the cannabis market.

There are three main routes for the active ingredients in cannabis to enter the body — by inhalation, by being placed under the tongue, and by being eaten. Each has its own drawbacks. Inhalation has the highest level of bioavailability, or how much of the chemical is absorbed, but is harmful to the consumer’s lungs. Consumption by under-the-tongue methods has a moderate level of bioavailability but an unpleasant taste. Eating cannabis products has a low level of bioavailability, giving consumers a low bang for their bucks, plus flavor challenges usually met through the addition of large amounts of sugar.

DehydraTECH transforms the situation by seriously reducing the downsides of eating cannabis.

The technology involves combining active ingredients with fatty acids such as those found in sunflower oil, which provide a protective bond, with a patented dehydration process. The molecules within the fatty acids are believed to keep active ingredients away from bitter taste receptors, significantly reducing their unpleasant flavor, thus vastly reducing the need to disguise them with sugar. Low-calorie edibles that taste great are possible!

Fatty acids also help active ingredients in cannabis as they pass through the digestive system. They protect cannabinoids from damage while passing through the stomach, increase the extent to which they’re absorbed by the intestines and can even bypass the liver’s first attempts to filter them out. This leads to much higher absorption, significantly increasing their bioavailability.

This process makes cannabis edibles, which are already healthier than smoking the drug, far more appealing and better value for money. This has led to deals such as Lexaria’s licensing of DehydraTECH to Nuka for use in its cannabis-infused chocolates.

To make the most of this potential, Lexaria has created subsidiaries specializing in the use of DehydraTECH for cannabis. Lexaria CanPharm Corporation focuses on the cannabis market, providing DehydraTECH and other enhancements to the global cannabis industry. The company is in discussions to license its technology in Canada, the United States, and Europe.

Lexaria Hemp Corporation. operates within the related hemp industry, which works with a specific form of cannabis that is low in psychoactive THC but potentially rich in other active ingredients. Lexaria Hemp is in discussions with a number of companies about how its products is used to deliver cannabidiol (CBD) derived from hemp.

With a groundbreaking technology, a carefully developed corporate structure and now a new Fortune 500 source of funding, Lexaria appears to be in a strong position within the cannabis industry.

A Crop of Cannabis Companies

The dramatic growth of legal cannabis in recent years has created a range of important companies focused on the sector.

Like Lexaria, Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has had success in attracting finance from bigger players outside the cannabis sector. The company has received $4 billion in investment from an American beverage company, which has bought a significant stake in the core company. This will help to finance the development of cannabis-infused drinks and is seen as part of a wider trend, as tobacco and cannabis companies look to vary their product lines while health concerns constrict their sales.

The expansion of the cannabis market has seen a string of investments and purchases within the sector. Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), one of the big players in Canada, recently signed a letter of intent to acquire Whistler Medical Marijuana Corporation in a deal valued at $175 million. This will give Aurora control of a well-established organic cannabis brand, increasing its market appeal.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has, like Lexaria, drawn investment from Altria, in the amount of CA$2.4 billion. In this case, the funds have come in exchange for shares in the core company, giving Altria a great deal of influence at Cronos. Cronos already does business in North America, Latin America, Europe, Australia and Israel, so this will provide Altria with a way into global cannabis markets, as the spread of legalization expands cannabis markets around the world.

Other companies, such as GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF), are strongly oriented towards the use of cannabis for medical purposes. As well as selling strains of medical cannabis, GW has been carrying out research to develop medicines based on it. The company recently saw positive results from the second round of trials of an oral solution created to tackle Dravet syndrome, a severe and hard-to-manage form of epilepsy.

With more money coming in from big-value companies and new technology in development, the cannabis industry looks set for a bright year.

For more information on Lexaria Bioscience Corp., visit Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP)

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Direct Selling Companies Prove Attractive for CBD Market, Drawing Large Non-Endemic Cannabis Industry Partners

CannabisNewsWire Editorial Coverage: With experts such as the Brightfield Group predicting the hemp-derived CBD (cannabidiol) market will reach $22 billion by 2022, major industry players such as Anheuser-Busch are seeing value and viability in the direct selling approach to selling CBD products.

With a predicted 130 percent compound annual growth rate (CAGR) over the next three years, the hemp-derived CBD industry looks primed to explode.
The direct selling approach to selling CBD products pioneered by brands such as Youngevity International is attracting the interest of large-scale companies.
Given new medical studies proving the efficacy of daily CBD intake, the market appears ripe for companies with vested interests in other lifestyle markets.

Following the passing of the groundbreaking 2018 U.S. Farm Bill that legalized the industrial cultivation of hemp nationally, scores of companies not endemic to the cannabis industry are looking for ways to enter the booming CBD market. Partnerships and acquisitions look to be one of the most promising strategies, with many savvy companies utilizing the direct selling route originated by brands such as Youngevity International Inc. (NASDAQ: YGYI) (YGYI Profile), a leading omni-direct lifestyle company. New Age Beverages Corporation (NASDAQ: NBEV) recently merged with a direct selling company to distribute its CBD products, while beer giant Constellation Brands Inc. (NYSE: STZ) poured a $4 billion investment into Canadian cannabis company Canopy Growth Corporation (NYSE: CGC) (TSX: WEED). Anheuser-Busch InBev (NYSE: BUD) (OTC: BUDFF) also partnered with a leading Canadian cannabis producer to research cannabis-infused drinks and owns 20 percent of Icelandic Water Holdings, which recently entered into an exclusive joint-marketing/development agreement with Youngevity to develop and sell CBD-infused products.

To view an infographic of this editorial, click here.

A Market Primed to Skyrocket

The recent deregulation, legalization and proliferation of the cannabis industries in the United States and Canada made 2018 a landmark year for those industries, creating an ideal scenario for an astronomical growth rate. Canada’s recent move to legalize recreational marijuana and the United States’ decision to legalize the industrial cultivation of hemp nationwide has experts forecasting the global cannabis industry to exceed $39 billion by 2023 and possibly exceed $95 billion by 2026.

Within that market, the hemp-derived CBD segment will likely grow at an even faster rate, with that growth buoyed by the fact that it doesn’t have to pass any state legalization hurdles across the United States. Brightfield Group expects the hemp-CBD industry’s growth to outpace the rest of the cannabis industry combined, and Hemp Business Journal estimates the hemp market to grow around 700 percent by 2020. With the meteoric growth predicted, companies such as Youngevity International Inc. (NASDAQ: YGYI), which already have established direct-selling channels that can nimbly adapt and upscale marketing, production, and delivery, could see a boon in business.

Direct Selling Method Attracting Corporate Giants

Given the nascent nature of the cannabis industry, many consumers are just learning about CBD products, meaning that growth within the industry is happening in the most organic fashion possible: word-of-mouth marketing. Brightfield Group notes that more than 50 percent of CBD consumers in all U.S. regions first learned about CBD from friends or family, which makes direct selling companies a “fantastic fit” for the CBD industry.

Studies by Direct Selling News show that direct selling companies already lead the global market in sales of CBD products with more than $300 million in annual sales. Therefore, the interest of larger, non-endemic companies in the direct selling model of brands such as Youngevity only makes sense and may signal that, as the cannabis market continues its stratospheric growth, so too will the direct selling sector within the industry.

Increased Medical Studies Cause Increased Interest in CBD

One of the main driving forces behind the rapid increase in popularity in CBD globally is increased awareness by consumers of the widespread medical uses of CBD. Research has shown that CBD, particularly when used daily, can help treat and prevent symptoms of Alzheimer’s disease, chronic pain, anxiety, insomnia, arthritis, epilepsy and a slew of other ailments.

Given that, companies such as Youngevity — which has the ability to deliver CBD in convenient packaging and applications for daily use — may have an upper leg when it comes to profiting off the growing trend. Knowing that, it makes sense that Youngevity recently announced an exclusive joint-marketing agreement with Icelandic Water Holdings, a company in which Anheuser-Busch has 20 percent ownership.

Youngevity and Icelandic plan to develop and sell CBD-infused dietary supplements, children’s drinks, pet products, and coffee products via Youngevity’s direct selling platform. This move seems to validate not only the viability of the direct selling model in selling CBD products but also the potential windfall businesses already established in other lifestyle industries may experience by integrating into the CBD sector.

Lifestyle Direct Selling Companies Poised to Capitalize on Expanding CBD Market

Globally, the direct selling market is growing. Research by Euromonitor shows that the direct selling market is expected to reach $163 billion by 2020, with the largest portion of that business coming from the wellness industry. Given the aforementioned promise of the CBD market in the direct selling industry, along with the expected continual growth of the direct selling industry at large, it only makes sense that direct selling companies poised at the intersection of the cannabis, wellness and other lifestyle industries may be best suited to capitalize on the inclusion of CBD in other industries.

Youngevity could be an ideal example of just such a company. The direct selling expert has already established a sterling presence in the coffee industry through its wholly-owned subsidiary CLR Roasters, a proven farm-to-cup pipeline that can be quickly and easily adapted for hemp cultivation. Its holdings in other markets ripe for CBD inclusion such as the beauty and wellness industries, Youngevity may be best positioned to harness the incredible growth in the CBD market, particularly via large-scale corporate partnerships and mergers.

CBD Market Continues to Draw Non-Endemic Interest as Direct Selling Flourishes

New Age Beverages (NASDAQ: NBEV) recently merged with the direct selling company Morinda with the stated intent to sell CBD products through Morinda’s direct selling model. This appears to be a solid endorsement of the viability of direct selling in selling CBD. Created in 2016, New Age has developed a brand portfolio competing in the highest growth segments of the beverage industry and has created the only one-stop-shop of healthy beverages. By combining with Morinda, New Age plans to rapidly grow its brands by adding a direct-to-consumer infrastructure and market access to 60 countries around the world.

Constellation Brands (NYSE: STZ) has similarly shown that the beer industry is keenly interested in the CBD market. It recently invested $4 billion in Canadian cannabis producer Canopy Growth (NYSE: CGC) (TSX: WEED), telling U.S. lawmakers it was “extremely bullish, if not more bullish” on the prospect of selling CBD-infused drinks in the United States. following the nationwide legalization of industrial hemp cultivation via the 2018 U.S. Farm Bill. Given its positioning as a premium beer, wine, and spirits company, Constellation’s interest in the market may signal that other large corporations in the premium beverage market may see viability in CBD.

Canopy Growth was the first cannabis company in North America to be publicly traded, then followed that milestone by becoming the first North American cannabis company to diversify its platform to include both greenhouse and indoor growing, to acquire a major competitor and to be listed on the Toronto Stock Exchange. Through its subsidiary, Canopy was also the first cannabis company to introduce the now-standard concept of compassionate pricing, making medical cannabis more affordable for patients.

Anheuser-Busch Inbev (NYSE: BUD) (OTC: BUDFF), the massive brewer that makes Budweiser Bud Light, and more than 500 other beer brands, has shown a keen interest in the CBD market. The company recently partnered in a $100 million joint venture with Tilray Inc., a leading Canadian cannabis company, to research cannabis-infused drinks for the Canadian market. Currently the partnership is limited to Canada, with the companies making decisions regarding the commercialization of the beverages in the future. Anheuser-Busch said it would participate in the project through its subsidiary Labatt Breweries of Canada.

The recent nationwide legalization of hemp cultivation in the United States, as well as the nationwide cannabis legalization in Canada, has created a rapidly expanding CBD market. With the proven success of direct selling companies in selling these products, it seems the direct selling industry will continue to help propel the CBD market as large-scale, non-endemic companies look for ways to gain entry into the market.

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

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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)

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US President, Producers Envision ‘Green Acres’ with Signing of Historic Hemp-Legalizing Farm Bill

CannabisNewsWire Editorial Coverage: Moments prior to signing a historic 2018 Farm Bill and effectively legalizing industrial hemp, President Donald Trump tweeted out a video of his performance at the 2005 Emmy Awards, singing the song “Green Acres.” Having already passed through the House of Representatives and the Senate, the bill was met with much fanfare across nearly the entire cannabis sector, including benefactors such as Green Growth Brands (CSE: GGB) (OTCQB: GGBXF) (GGB Profile), Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Harvest Health and Recreation (CSE: HARV) and MedMen Enterprises Inc. (CSE: MMEN) (OTC: MMNFF).

To view an infographic of this editorial, click here.

Trump’s signature was the last hurdle for the $867 billion bill. Now the market is gearing up for the massive potential of hemp-derived cannabinoids hitting stores. Among the benefactors of the passage is Green Growth Brands (CSE: GGB) (OTCQB: GGBXF), whose goal it is to become the leading retailer of cannabis and CBD products in North America. Under its Seventh Sense brand, the company is about to market its own line of hemp-derived cannabidiol (CBD) personal care products.

Back in September 2018, the market research firm Brightfield Group published a 2018 market overview and analysis on hemp-derived CBD. Among the observations made in the report was the possibility that the CBD market could eclipse the cannabis market. Less than three months after the report’s release, the Farm Bill’s passage significantly improved this possibility.

According to the Brightfield Group’s analysis, the CBD market is expected to annually grow by 147 percent, from $591 million in 2018 to an estimated $22 billion by 2022.

A ‘Monumental Policy Shift’

Upon the passing of the bill on December 20, 2018, the cannabis retail innovators at Green Growth Brands saw the timing as nearly perfect for their company. Having passed just ahead of the launch of its hemp-derived CBD personal care product line under the Seventh Sense brand, Green Growth Brands announced its goal to become North America’s leading retailer of cannabis and CBD products.

“The new bill is a significant step in America’s acceptance of CBD and the benefits it can provide consumers,” said Peter Horvath, CEO of Green Growth Brands, in the company’s corresponding press release. “This development dramatically accelerates our ability to grow our North American retail network. This piece of legislation provides clarity on how we can build out our operations and logistics, reassures those investing with us in this new, exciting industry and gets us closer to the ultimate goal of giving customers high-quality, CBD-infused personal care products at affordable prices.”

According to an AMA (Ask Me Anything) interview, Horvath expressed his excitement over the company’s current selling of test quantities of the Seventh Sense CBD brand in a couple of national retailers’ stores already. “The selling is surprisingly good for products in the personal care category, exceeding our sell-through expectations,” said Horvath. “These are products never before seen, in a brand that’s totally new, and without any marketing.”

Green Growth Brands expects to roll out bulk orders for the product in 2019 and will announce the wholesale partners it is working with when appropriate. Already the expectation is for the launch of a web store and CBD kiosks, which Horvath deems are a “category killer,” in February 2019.

The company expects to derive up to 39 percent of its annual revenues from the CBD segment in 2019, with the potential for that figure to rise to 43 percent by 2021. Current company estimates place the dollar figure of the annual revenue from this segment at roughly $59 million for fiscal year 2019.

Due to Green Growth Brand’s overwhelming amount of c-level retail sector experience, Horvath and his team have a healthy degree of authority on their expectations. The company roll call includes expertise from several household names, including Victoria’s Secret, Designer Shoe Warehouse, American Eagle Outfitters, Bath & Body Works and more.

Branding is a quintessential aspect of Green Growth Brands’ future success. The team’s strategy is focused around being the best brand, coming from what it calls an “emotional brand” perspective. The company has an array of brands — including Camp, Meri+Jayne, Seventh Sense and Green Lily — all of which will be utilized for both CBD and cannabis purposes.

To move its CBD products to market, the company will have three separate strategies: wholesale, e-commerce and kiosks. The latter strategy is an indication of Horvath and his team’s extensive retail knowledge, as they work to grow their brand. Kiosks help to reduce leasing costs for retail exposure while selling brand-specific emotional brands at a relatively inexpensive price. One executive on the team had significant success with this strategy as a former executive of Sunglasses Hut.

By the end of 2019, Horvath’s company expects to have approximately 1,400 SKUs on the market. Should it reach this goal, Green Growth Brands would have a strong case for dominating the CBD products market. The timely passing of the 2018 Farm Bill may only serve to speed up the process.

Additional Benefactors of the Hemp Bill

Prior to the final signing of the Farm Bill, Canadian cannabis company Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) grabbed headlines by entering into a subscription agreement with tobacco company Altria Group, Inc. Altria agreed to make an equity investment in Cronos of approximately $2.4 billion. The strategic partnership provides Cronos Group with additional financial resources, product development and commercialization capabilities. Cronos is one of the few Canadian producers listed on a major U.S. exchange, while not having any current operations in the country.

Another company that’s been keeping its eye on U.S. regulatory changes is Canopy Growth Corporation (NYSE: CGC) (TSX: WEED). The company wasted no time in commending the passing of the Farm Bill by announcing that “Canopy Growth will participate in the American market now that there is a clear federally permissible path to the market. Consistent with the spirit of the Farm Bill, Canopy Growth will participate in ways that support American farmers.” Canopy already has a deep hemp-specific portfolio of intellectual property through a previous acquisition of Colorado-based ebbu, Inc. In addition, much speculation has surrounded the potential for the company’s ongoing partnership with Constellation Brands to develop new cannabinoid-infused products, which will likely include a line (or multiple lines) of CBD drinks.

Following the closing of a reverse takeover of RockBridge Resources, Inc., vertically integrated Harvest Health & Recreation (CSE: HARV) announced the acquisition of Colorado-based CBx Enterprises, a producer of cannabis products and technologies for extraction and processing. Harvest’s footprint spans across 10 states, including California, Colorado and Massachusetts. The company reported revenue of $29 million in 2017 and has made $18 million in investments resulting in 40 permits and licenses across the United States. Having focused its attention solely in the United States, Harvest has no immediate plans for international expansion. With each regulation change in the Farm Bill, the company’s fortune appears to look brighter.

However, the Farm Bill’s passing may not please companies solely focused on the dispensary side of the sector. After already going through a rigorous process to be licensed in the states that it operates in, groups such as MedMen Enterprises, Inc. (CSE: MMEN) (OTCQX: MMNFF) gained exclusivity to carry and sell legalized cannabis products. Upon hemp-derived CBD becoming legal and available, the door to more open competition in the space could open widely. MedMen doesn’t seem to be fazed by the passing, having recently announced the finalization of the acquisition of Chicago-based PharmaCann, one of the largest medical cannabis providers in the United States, with ten retail stores and three production facilities across multiple states.

Whether or not federal legalization is in the cards for the United States is up in the air. However, the unfettering of CBD could be seen as the first step. Now with the anti-cannabis stance of former Attorney General Jeff Sessions out of the way, the path to legalization starts to get a little bit clearer. With the majority of Americans, including Republicans, now in favor of legalization and a bevy of CBD-infused products on the way, the days of cannabis prohibition may be on their way out. With a soon-to-be-launched line of hemp-derived cannabidiol (CBD) personal care products, Green Growth Brands is poised to enter the potential billion-dollar CBD market opened up by the Farm Bill’s passage.

For more information on Green Growth Brands, visit Green Growth Brands (CSE: GGB) (OTCQB: GGBXF). Please also visit PotStockNews.com.

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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)

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Political Breakthrough Heralds the End of the Prohibition on Hemp

CannabisNewsWire Editorial Coverage: With federal legalization of hemp expected in the United States by Christmas, the farming and cannabidiol product industries are anticipating great changes in their future.

Hemp farming, which has been illegal in the United States since 1970, is about to be made legal under the newest Farm Bill legislation.
Pilot projects and work in Canada have allowed companies to prepare for U.S. hemp farming by developing their techniques, science and crop strains.
With legalization promising great growth, companies are seeking paths to investment opportunities.

Marijuana Company of America, Inc. (OTC: MCOA) (MCOA Profile) is among the innovating companies carrying out cultivation, research and development projects on sites in the United States and Canada. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has been expanding its operations through partnerships with other companies, covering investment, supply and research. Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) has expanded its cultivation and markets while negotiating for fresh investment. Aphria, Inc. (NYSE: APHA) (TSX: APHA) has partnered with a company specializing in branding to develop new consumer-driven brands and products for the cannabis market. Aurora Cannabis, Inc. (NYSE: ACB) (TSX: ACB) is putting out new products in the United States and looking to export those products abroad, following the successful export of medical cannabis into Europe.

To view an infographic of this editorial, click here.

The End of an Era?

For decades, hemp has been locked out of agricultural development in the United States. Once a vital crop used to produce the rope and canvas on which the American naval and merchant shipping forces relied, it was made illegal in 1970 under legislation designed to reduce drug addiction. For nearly half a century, farmers have been unable to cultivate this crop despite growing evidence of its usefulness.

Now that is set to change. After months of haggling, politicians in Washington have finally brokered a deal to pass the legislation that will make hemp legal. For the past four years, a small band of farmers and university researchers have been involved in pilot projects, testing the potential of the hemp market. The profitable outlook, together with growing demand for health and wellness products derived from hemp, have led politicians to change their stance.

Could 2019 be the year that hemp’s cannabidiol (CBD) derivatives become household commodities?

Legalization Legislation

The past decade has produced considerable growth for companies working in the hemp sector, such as Marijuana Company of America, Inc. (OTC: MCOA). Hemp is a form of the cannabis plant with very low levels of tetrahydrocannabinol (THC), the psychoactive ingredient in the marijuana strains of cannabis. Despite hemp’s essentially innocuous nature, it was made illegal under sweeping federal regulations that classified all forms of cannabis as Schedule I substances, among the most dangerous and least medicinally helpful of drugs.

Since 1996, the legal landscape has been changing as states have introduced pro-cannabis legislation in defiance of federal drug policy. This allowed companies such as MCOA to emerge and start looking at the potential of industrial hemp. However, these companies were caught in a no-man’s-land industry sector between conflicting state and federal legislation. Under those circumstances, building a commercial hemp industry had limited practicality.

A change at the federal level began four years ago, when the 2014 Farm Bill made it legal for companies to carry out pilot projects to grow hemp. Companies moved quickly to make the most of the opportunity, setting up facilities such as the farm MCOA established in Oregon. From 9,650 acres in 15 states in 2015, hemp production grew to 77,000 acres under 3,500 licenses in 23 states in 2018.

During the course of that change, the hemp industry has gained widespread acceptance in Washington and throughout the country, leading to cross-party support for hemp’s inclusion in the new Farm Bill as an agricultural commodity. But conflict over other aspects of the bill held the legislation up until late November. Then, in the waning days of a lame-duck Republican House, an agreement in principle was finally reached.

Once the farm legislation is passed as expected, growing hemp could become fully legal in the United States as early as January. That would be huge news for farmers and a great start to the new year for the fast-growing industry.

Farming Hemp

The anticipated legislative changes may lead to a new agricultural phenomenon for United States farmers, but it will be far from the first hemp crop in North America. Aside from the pilot projects in the United States, more liberal legislation in Canada has allowed farmers to get a head start on hemp production. For MCOA, this has meant pursuing profitable crops and supporting farmers on both sides of the border.

In Canada, MCOA’s efforts have taken the form of an innovative joint venture in New Brunswick. There, MCOA teamed up with Global Hemp Group, Inc. and four local farmers to experiment with techniques for hemp farming. This has led to practical developments, such as the use of a bean harvester to strip leaves and inflorescence from plants, improving the efficiency of the harvest. It has also led to more academic results, including research on plant nutrition with Dr. Ron Smith at the University of New Brunswick.

The company’s U.S. project at Scio, Ore., is earlier in its development and proportionally smaller. The Oregon cultivation benefited from good weather in 2018, extending growing time and leading to an improved harvest. Here, MCOA is already growing hemp with a higher CBD content — 6 to 12 percent. Large greenhouses were used to dry out these plants, with staff continuing to learn and refine their drying techniques with each batch.

On both sides of the border, partnering with other companies is helping MCOA maintain a high pace of innovation and expansion. The company is currently looking for opportunities to work with a cannabinoid extraction player in the United States to make the most of its crops.

Preparing for a Boom Market

With legalization around the corner, hemp companies are moving to strengthen their positions for market expansion.

For MCOA, this has meant a move into mainstream advertising. The company’s hempSMART™ subsidiary has partnered with asseenontv.pro to launch a television advertising campaign for its Full Spectrum Pet Drops, a pet well-being product using CBD.

CEO Donald Steinberg said, “As our hempSMART brand continues to grow, MCOA will continue to search for and utilize new partnerships that will uniquely market our incredible collection of all-natural CBD product formulations. We feel that our strategic partnership with ASONTV is an important milestone for the Company that will help promote our hempSMART Pet Drops to consumers across the country.”

The company has also filed an application to uplist its shares from OTC Pink to the OTCQB tier on the OTC markets. This strategic move should provide better access to institutional investors to raise funds targeted to help the company grow along with the wider industry. A new CFO and independent director were appointed over the summer to ensure strong leadership during this period of huge potential.

Like MCOA, Canadian cannabis company Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has been partnering with other companies to support its growth. This includes an investment and supply deal with 48North Cannabis Corp., a strategic supply agreement with MediPharm Labs Corp. and a research and development collaboration with Battelle. One of the factors fueling Canopy Growth’s expansion has been an investment from Constellation Brands, which pumped billions into Canopy Growth earlier this year. This financial move should give the American drinks giant a way into the cannabis and hemp markets, including the production and sale of CBD-infused drinks.

Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) has also been pursuing growth, with expansion into Latin America, an increase in the scale of cultivation and a collaboration with Ginkgo Bioworks to develop innovative products for the cannabis market. This has drawn the attention of outside investors, and the company is now in talks with Altria Group, Inc. about potential investments that could provide additional funds at a strategic turning point for the market.

Aphria, Inc. (NYSE: APHA) (TSX: APHA) aims to carve out a distinct space in the market through innovative consumer products. Aphria recently announced the creation of a joint venture with Perennial, Inc. to develop original consumer-driven brands and products for the cannabis market. This will join Perennial’s experience in brand development with Aphria’s expertise in cannabis to explore edibles, beverages and other new lines of products.

Aurora Cannabis, Inc. (NYSE: ACB) (TSX: ACB) is already busy putting new products out. The company has recently announced the release of cannabis softgel capsules for the Canadian market and expects to export them to international markets next year. The company already works on an international scale, having announced its first shipment of medical cannabis to the Czech Republic in November.

Pending hemp legalization in the United States is only the latest in a series of shifts in the wider cannabis sector, shifts that appear to have opened the way for a wave of expansion and innovation.

For more information on Marijuana Company of America, visit Marijuana Company of America, Inc. (OTC: MCOA)

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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)

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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)

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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)

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CannabisNewsWire (CNW)
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Hydroponics Increasingly Key as Booming Cannabis Sector Goes to Next Level

CannabisNewsWire Editorial Coverage: With Canada’s decision to decriminalize cannabis nationwide and the 2018 U.S. Farm Bill’s provision to potentially make industrial hemp and hemp-derived cannabidiol (CBD) legal nationwide, the cannabis CBD product sector is gaining a strong foundation.

Analysts expect runaway growth in the cannabis and CBD markets.
Industry is scaling up amid regulatory reform.
Underlying growth metrics are bullish for hydroponics suppliers and cultivators alike.
Branding and marketing are increasingly important and tied to quality control.

Numerous interests stand to benefit as the cannabis sector begins to hit its stride, ranging from cannabinoid biopharma developers to cultivators with rapidly expanding acreage footprints. Pick-and-shovel plays such as hydroponics supplier Sugarmade, Inc. (OTCQB: SGMD) (SGMD Profile) could be some of the biggest winners, quietly supplying tons of hardware to a variety of end users without having to jump through the all the legal hoops. Tilray, Inc. (NASDAQ: TLRY), one of the first companies licensed to produce medical cannabis as dried flower in Canada, has quickly become known for its full-spectrum cold-extracted cannabinoids with clearly indicated tetrahydrocannabinol (THC) and CBD potencies. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has parlayed its leadership in cannabis and hemp with dried, oil and softgel capsule products into a landmark $4 billion investment from beer, wine and spirits major Constellation Brands, Inc. Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), which operates two wholly owned Canada-licensed producers, is making its presence felt across five continents. And Aphria Inc. (NYSE: APHA) (TSX: APHA) is also making serious waves as a globally minded cannabis producer, having just recently been approved for uplisting to the New York Stock Exchange.

To view an infographic of this editorial, click here.

Historic Market Forces Create a Perfect Storm

After more than eight decades of prohibition, cannabis has gone from a black market to a tax revenue-generating multibillion-dollar industry in a handful of years. It is an industry nipping at the market share heels of sectors like alcoholic beverages, food and drink, supplements and now even biopharmaceuticals. The market for just one of over 100 different cannabinoids, the non-psychoactive CBD, was recently projected to break $22 billion by 2022. CBD alone could have “profound impacts” across the consumer packaged goods (CPG) and pharma industries according to Brightfield Group, potentially outpacing the broader cannabis market combined. It would be a major boon to the U.S. market if industrial hemp and CBD become legal under the latest Farm Bill.

Recent analysis in a report from Amadee & Company cites baseline market metrics such as over 37 million people in the United States using cannabis (both legally and illicitly) as contributing to a North American market worth over $41 billion this year, which is on track to hit $95 billion by 2026. The more conservative figures from Arcview Market Research and its research partner BDS Analytics are the $9.2 billion in sales seen in 2017, and a projection of $47.3 billion within 10 years. Either way, investors are looking at some low-hanging CAGR fruit, and the sector as a whole has scaled up enough that it is now seemingly much easier to pick winners that can thrive, regardless of potential governmental policy drift.

Many End Markets – One Stop Shop for Hydro Hardware

Sugarmade, Inc. (OTCQB: SGMD), headquartered in northeastern Los Angeles County on the edge of the Angeles National Forest, has already established a formidable presence in the hydroponics supply market with brands such as ZenHydro.com, CarryOutSupplies.com and BudLife. The company also recently launched a massive new $1 million initiative to cement a foundational position in the emerging U.S. industrial hemp and CBD market through an investment in privately held Hempistry, Inc., a Kentucky-based farmer (23,000 acres) of an ultra-rich CBD strain of hemp.

Hydroponics has rapidly emerged as the dominant strain in the cannabis cultivation industry when it comes to medical cannabis, or products that want to emphasize stringent environmental cultivation controls and overall consistency. The KD Market Insights report projects a six-year CAGR of 20.7 percent, as a $5.22 billion 2017 hydroponics market grows to $13.84 billion in 2023. According to another report, cannabis cultivation will be a major driver of sector growth, with just the U.S. hydroponics market set to clock in at 20.3 percent CAGR from 2018 to 2025, hitting around $3.7 billion.

These are significant advantages for SGMD as the company pursues its binding definitive agreement to acquire Nevada-based Sky Unlimited, LLC, which has developed a solid reputation throughout the full spectrum of cultivation markets. Its robust AthenaUnited.com website lists everything from advanced lighting systems such as Hortilux lamps and ballasts to complete hydroponics kits such as the AeroFlo 60 aeroponic system from General Hydroponics, which super-oxygenates the nutrient solution. The AeroFlo line is a great example of a brand that growers, academics and researchers alike have praised for delivering consistently hearty growth rates and yields. Consumers from various cultivation industries have come to trust that they can find the best environmental control systems and cutting-edge nutrients, as well as plant care and more general gardening supplies on the site.

Ready to Launch

Sugarmade will retain all employees and completely assume all operations and liabilities via the acquisition. The company anticipates that the Sky Unlimited deal will be highly accretive for shareholders and has further increased the previous 500 percent annual revenue growth projection made back in July, of $30 million during 2019, to a whopping $70 million. This handsome increase owes a lot to how easily integrated the parallel business lines of Sky Unlimited and Athena are to SGMD’s existing model, as well as the extent to which the deal will allow Sugarmade to not only access the larger commercial cultivation market more directly but also enhance its emphasis on brands in a market where brand loyalty still means a great deal.

Scheduled for January 2019, the deal is subject to an extensive audit of the Sky Unlimited operations, but confidence is high that this latest acquisitive foray by Sugarmade will spell share price appreciation gold for the company’s shareholders. In fact, things are apparently looking so good overall for the company that management has begun positioning for a potential NASDAQ uplisting, tapping the requisite legal team to expedite the process.

Symbiosis amid Competition

The broader market is set up nicely for SGMD to take advantage of, but the reality is more symbiotic than predatory.

Tilray, Inc. (NASDAQ: TLRY) was the first company to legally export medical cannabis from North America to Europe, Australia and New Zealand. One of the top names in both cultivation and research, Tilray is on deck to report Q3 financials this Nov. 13 after a strong quarter in which the company successfully closed a $450 million private placement funding run with qualified institutional buyers. The company is one of the pioneers in clear labeling of THC and CBD concentrations and has a public-facing dedication to compliant and effective products that lead the industry by example.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) prides itself on the highest quality cannabis, whether it is ultimately distributed as dried flower, oils and concentrates, or precisely formulated softgels. The company has a strong hand in industrial hemp for producing CBD, and now that alcoholic drinks giant Constellation Brands (which has over 100 brands to its name) recently closed its $4 billion investment in the company, Canopy is poised to strike hard and fast across the more than 30 countries worldwide that are in the process of advancing some form of permissible cannabis regulation for adult use or medicinal purposes.

Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) is increasingly a global player, with operations in Canada, Colombia, Germany, Poland, Israel and Australia. The company launched its second recreational cannabis brand this year and has two wholly owned Canada-licensed producers to its name, as well as a 21.5 percent stake in British Columbia-based Whistler Medical Marijuana Company, which is licensed to produce and sell medical marijuana and cannabis oil.

When Aphria Inc. (NYSE: APHA) (TSX: APHA) uplisted from the OTCQB to the NYSE, it was not just big news for the company but for the cannabis industry and smallcap markets as a whole. Aphria has seen an impressive rise from a relatively small player to a true global leader in cannabis. The company’s rigorous study of the end-user market and ingenious development of a variety of brands to suit every buyer segment has delivered bottom-line results across the company’s entire line of capsules, oral solutions, oil syringes and single-unit vaporizer cartridges.

Once-in-a-lifetime Early-adopter Opportunity

As attitudes and regulations open up the global market for the end products being developed in the cannabis market, from commercial drinks containing CBD to lab-grown cannabinoid biopharma indications, some of these smaller companies are starting to look to many analysts like potential all-stars. Differentiating factors such as brand presence, product execution and market access/penetration are important analytical vectors. However, key capabilities such as being a picks-and-shovels supplier are of particular note, whether one is talking about hydroponics hardware for production or producing the raw cannabis that other companies rely on.

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

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CannabisNewsWire (CNW)
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