A snapshot Into Global CBD Insights Trends and Market Size
The global Cannabidiol (CBD) market is projected to grow at a compound annual growth rate of 125% from 2019 to 2026. The robust growth stems from growing awareness of CBD health benefits as well as the opening up of the market around the world. An increase in the number of countries that have legalized the use of CBD for its health claims has helped foster further growth, making CBD a buzzing market phenomenon.
CBD Insights
CBD is a compound extracted from hemp and marijuana for its medicinal and therapeutic properties. The compound has emerged as a remedy for addressing various medical conditions such as inflammation, pain as well as sleep disorders. CBD infused products such as cannabis oil, beauty and skincare products, gummies, and dog treats have since cropped up as manufactures continue to explore ways of leveraging CBD properties. In recent years, there has been a spike in demand for cannabidiol in pharmaceutical formulations, by virtue of the compound’s comforting properties. Likewise, hemp production has continued to edge higher as growers and producers look to take advantage of the growing market appeal. Strong demand for CBD skincare products made up of moisturizers creams, cleaners, oils and sun creams continued to trigger strong demand for CBD. The use of CBD in beauty products has gathered momentum in recent years owing to the compound’s anti-inflammatory and antioxidant properties.
Distribution Channels
Considering the fact that cannabidiol is still a controlled substance in many jurisdictions around the world, wholesalers and retailers must have a license from relevant authorities to distribute it. In countries where CBD is legal for medicinal purposes, hospitals and pharmacies have a leeway to prescribe CBD products without too many restrictions. Likewise, hospitals and pharmacies account for the biggest share when it comes to CBD distribution around the world. Retail Pharmacies come a distant second specializing mainly in offering CBD infused personal care products, food items, and medicines. Online stores such as Pure CBD Vapors, CBD Outlet Online, and Discover CBD offer multiple CBD-infused branded products and edibles as well as wax forms. CBD Regional Insights The U.S and Canada continue to lead the way, given the size of their CBD market. North America stands out in part because of friendly regulatory frameworks. A number of states in the U.S have already legalized the recreational and medicinal use of cannabis; Canada having legalized cannabis at the federal level. The Americas accounted for 78% of the global CBD market in 2018 at $2.4 billion, with Europe coming a distant second with a market value of $358 million. The beverage segment of the CBD market remains the biggest accounting for 51% of the total market valued at about $1.6 billion. This segment is projected to soar 127% by 2026.
While cannabis has remained a banned substance in most countries, some country’s attitudes are slowly changing. Asia for instance, presents an enormous untapped market opportunity. The country is considered an attractive region for laboratory proficiency owning to the territories’ large base of manufacturers as well as research laboratories.
Growing CBD Investments
Sensing a window of opportunity, a number of companies have jumped on the CBD bandwagon, creating a vast assortment of products around Cannabidiol and its byproducts. Veritas Farms, Inc. (OTCQB: VFRM), a vertically integrated agribusiness, has invested vast sums of money on the production of a full-spectrum of CBD products. The company has recently unveiled a line of natural hemp oil products that contain CBD and intend to continue to add to their assortment in the near future. Dubbed as the leader in hemp extraction products, Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) has expanded its research initiative with The Center for Discovery in New York as it seeks to develop hemp genetics. The company’s breeding program is spearheading the development of superior CBD varieties to support the efforts of local farmers. Medical cannabis firm EXMceuticals Inc. (CNSX: EXM) is another company that has set sights on the CBD landscape focusing on North America as well as Europe. The company has already secured a cannabis research and development license from the Portuguese National Authority of Medicines and Health products to lead the way in European CBD circulation and, ultimately, worldwide distribution.
Bottom line
Increased hemp production fueling the rising demand for cannabidiol rich hemp biomass should continue to bolster CBD market growth. Likewise, increased adoption of refined CBD products coupled with the legalization of medical marijuana should drive demand for CBD products worldwide. Furthermore, companies are beginning to adopt new strategies and plunging into strategic mergers and acquisitions to strengthen their CBD production capacities. As progressive CBD companies move to expand their presence in the industry, the global CBD market size should continue to clock new heights globally.
Ruchi Gupta is financial journalist, specializing in small-cap companies mainly in the cannabis space. Disclosure: Ruchi Gupta works for Momentum PR, which represents EXMceuticals on the public relations front.
This Is Why Grown Rogue International Inc. (CNSX: GRIN) Appears Undervalued
Grown Rogue International Inc. (CNSX: GRIN) share price is yet to paint an accurate picture of the company’s tremendous potential amidst improving fundamentals. Investor sentiments in the stock did take a hit if price action in the first half of the year is anything to go by. Wild price swings saw the stock rally by more than 50% before tumbling to all-time lows.
The plunge came as a surprise as it came at a time when the broader cannabis sector was flying high. In addition, the company has been on an impressive run on the execution of its core business affirming growth metrics and the need for a higher valuation in the market.
Sales Growth
Grown Rogue is enjoying its best run when it comes to sales growth. The company reported a record-breaking quarter depicted by 388% YoYo growth in sales that came in at $834,309. At the end of the quarter, the company projected continued growth throughout the year, relying on expansion plans to key cannabis markets of California, Oregon, and Michigan.
The Company did meet its promise of robust growth on reporting a 125% quarter over quarter increase in sales in Q2 that came in at $1.9 million. Sales growth is indicative of brand strength as well as distribution reach, as the company continues to expand its wings into new markets. The company has since grown from controlling just three cannabis licenses to 22 licenses further affirming its multi-state operations.
“To have gained this brand recognition and sales traction, in what is arguably the world’s most competitive legalized cannabis market, bodes very well for our expansion into California and particularly the newly legalized market in Michigan,” said CEO Obie Strickler.
Sales growth looks set to be the order of the day as the company has expanded its footprint into Michigan as part of its growth strategy. Michigan becomes the third state from which the company will operate in addition to Oregon and California.
The expansion should reduce the company’s reliance on one market for growth. It should also shield it from the effects of a downturn in one market.
Gross margins have also shown signs of improvement helped by robust growth in revenues. Gross margin in the recent quarter improved to $0.4 million, a 20% increase. Margins are likely to continue improving as cannabis prices in Oregon show signs of edging higher as demand continues to outpace supply.
Organic Growth
Grown Rogue has also underscored its push for growth at all cost. The acquisition of Decibel Farms affirms push for inorganic growth even as the company continues to refine its internal operations to accelerate organic growth.
The acquisition of Decibel Farms marks an important milestone in the company’s growth strategy. With the acquisition, the company gains access to a valuable asset poised to strengthen its cannabis cultivation and production capacity further.
According to the Chief Executive Officer, Decibel Farms will bolster Grown Rogue manufacturing capacity in Oregon where demand for cannabis products is on the rise. Production capacity could reach highs of 5,400kg by the end of the year with the scaling of cultivation operations.
“We believe that licenses, assets, and operations are of little value without an experienced team that knows how to cultivate quality cannabis products at scale and build meaningful brands. Our team has been building these core competencies for the past 3 years,” added Jacques Habra, Chief Strategy Officer.
Demand for branded products continues to exceed internal production; one of the reasons the company is turning to acquisition to ramp up capacity.
Grown Rogue Price Analysis
While Grown Rogue has lost a significant amount of market value over the past six months, price action activity indicates potential to bounce back from all-time lows. The C$0.20 mark has since emerged as a crucial support level from where bulls appear to be jostling for positions consequently fuelling a bullish momentum.
Given the descending long-term bear trend and the fact that bears appear to be in control, the stock might have to rally and take out the C$0.24 resistance level, for the short-term momentum to turn bullish. A rally followed by a close above the C$0.24 mark could arouse buying pressure from buyers who have been on the fence.
https://ca.finance.yahoo.com/news/grown-rogue-reports-388-growth-111100202.html
https://ca.finance.yahoo.com/news/grown-rogue-announces-proposed-acquisition-124100831.html
https://ca.finance.yahoo.com/news/grown-rogue-second-quarter-revenue-123800178.html
- Published in Cannabis, CBD, Grown Rogue, Marijuana
Cannara Biotech – www.shopCBD.com
Cannara Biotech (CSE:LOVE)(FRA:8CB)
Headquartered in Montreal, Cannara Biotech is entering the U.S. THC-CBD market, through a subsidiary, with an on-line e-commerce platform called shopCBD.
“We are taking a leadership role by creating a hub for vendors to showcase their products and consumers to purchase hemp-CBD products in a fast and easy way. We want to become the Amazon of CBD,” – ZOHAR KRIVOROT – CEO and Founder
Highlights
- Zohar Krivorot, president and chief executive officer of Cannara Biotech is a 15-year veteran in the tech and on-line industries.
- Cannara Biotech is building the largest indoor cannabis cultivation facility in Quebec and one of the largest in Canada
- shopcbd.com is a platform that will showcase hemp-CBD retail products including tinctures, oils, capsules, body care, vape cartridges and pet-related CBD infused treats
- The indoor facility offers lower risk of airborne infections, mold/mildew and produces a higher grade of cannabis
- The new e-commerce platform will showcase retail products from hemp-CBD manufacturers for the U.S. consumer market
- shopCBD will provide a user-friendly on-line experience where consumers can purchase, review and compare a variety of CBD products
Trending
- With the recent passing of the 2018 Farm Bill in the U.S., CBD represents an emerging sector with many vendors seeking national reach to U.S. customers.
- The company’s strategy is to offer a wide variety of products from leading CBD brands, with competitive pricing and delivery times across the U.S.
- The rise in popularity for CBD products is driven by consumers seeking natural-based health and wellness solutions to treat various ailments from inflammation, anxiety to insomnia amongst many others.
- The hemp-derived CBD market is expected to reach $22-billion (U.S.) by 2022 according to industry analysts at Brightfield Group.
Alongside the e-commerce, on-line platform, Cannara Biotech will have on-site independent THC and CBD brands, following the adoption of regulations on cannabis-infused edibles and beverages, that will produce and ship from the facility. Cannara Biotech’s facility will be a multi-purpose facility that will cultivate recreational cannabis and produce cannabinoid-infused products including edibles, cosmetics, pet products and beverages. These products will be shipped to stores and retail outlets in Canada and to international markets.
Cannara Biotech went public in Q1 of this year and is being traded on the CSE under the ticker “LOVE” and on the FRA under the ticker “8CB”. As of February 12th, 2019, LOVE closed at .22.
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Isabelle Arsenault
Media Relations
MomentumPR
- Published in Cannara, Marijuana, Medical Marijuana
Cannara Biotech – Quebec’s largest cultivation facility
Cannara Biotech (CSE:LOVE)(FRA:8CB)
Headquartered in Montreal, Cannara Biotech is building the largest indoor cannabis cultivation facility in Quebec and one of the largest in Canada, a modern and secure 625,000-square-foot facility in Farnham, Quebec.
“Being in Quebec allows us to take advantage of the low cost of electricity and gives us a cost advantage over our competitors.” – ZOHAR KRIVOROT – CEO and Founder
Highlights
- Some 100,000 kg of cannabis production is expected per year once all 3 phases are operational. Today, phase 1 is being built with completion expected end of Q2 2019. Once completed, yield is expected at 15,000 kg.
- Cannara Biotech has raised $55M to date, has acquired 19 provisional patents for product exclusivity, and has developed 8 assorted THC/CBD infused product brands to add to their offerings.
- Low electricity cost in Quebec as well as reduced labour cost compared to the rest of Canada gives the Company a cost advantage over their competitors.
- Independent THC and CBD brands will be produced on-site accelerating speed to market.
- The Company will leverage the facility with joint-ventures to produce edibles, pet-products, cosmetics and beverages once the processing license is secured which is estimated for the end of 2019.
- The advantage of growing in an indoor facility offers lower risk of airborne infections, mold/mildew and produces a higher grade of cannabis.
- Cannara Biotech is building an online e-commerce platform (shopCbd.com) that will serve as a podium and distribution channel for US-CBD brands for the American market.
Closer look
Phase 1 will provide 130,000ft2 of growing space. Growing is expected to commence in the fall of 2019 with an estimated yield of 15,000kg.
Cannara Biotech raised $55 million from private investors during the introduction of this project and still have over $40 million in the bank with Phase 1 fully funded.
Phase 2 forecasted to be running by 2020 is 205,000ft2 and likely to yield 38,000kg per year. Phase 3 aiming to be operational in 2022 is 277,000ft2 and expected to produce 55,000kg per year. Cannara Biotech is looking to produce over 100,000kg per year once fully operational.
Currently, 300 sq. ft. space for Phase 2 is being rented by occupants that contribute to a rental revenue of $2 million per year. These earnings pay the monthly fee for the whole facility.
Cannara Biotech’s strategy is also to maximize on the low electricity rates Quebec has with its Hydro and low labour rates in Quebec.
Growing indoor cannabis often results in a higher grade of cannabis. Growing in a controlled environment, protected from many outdoor ailments and mildew creates a more consistent and desirable product for buyers and consumers.
Alongside selling cannabis to intermediaries who will transform the crop into their desired product, Cannara Biotech will have on-site independent THC and CBD brands, following the adoption of regulations on cannabis-infused edibles and beverages, that will produce and ship from the facility. Cannara Biotech’s facility will be a multi-purpose facility that will cultivate recreational cannabis and produce cannabinoid-infused products including edibles, cosmetics, pet products and beverages. These products will be shipped to stores and retail outlets in Canada and to international markets.
Cannara Biotech went public in Q1 of this year and is being traded on the CSE under the ticker “LOVE” and on the FRA under the ticker “8CB”. As of February 12th, 2019, LOVE closed at .22.
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Isabelle Arsenault
Media Relations
MomentumPR
GROWPACKER – the next Amazon of cannabis?
GROWPACKER; THE NEXT AMAZON OF CANNABIS?
What could Amazon possibly offer to make them even more successful? Imagine they offered the manufacturing, branding, packaging and total distribution of every one of their client’s products.
Well that’s what California based GrowPacker does; except they do it for anything and everything related to the cannabis industry. With regards to everything I mean; non-alcoholic beverages, carbonated and non-carbonated beverages, water, candies, chocolate bars, brownies, cookies, creams, lotions, massage oils, vape oils, pre-rolls, flower and the list goes on…
Growpacker clients provide them with their cannabis and preferred product parameters, including product specs and with that information Growpacker turns it into a finished ingestible and edible product. Because let’s face it, if your still invested in cannabis stocks that don’t produce eatables, start smoking your profits away because you missed the boat.
On top of converting your THC and CBD into anything infused, Growpacker will take care of formulations, lab testing, packaging and; even the total distribution and transportation of your product. They have a turn key formula with all the required licenses to boot! And to make this even more delicious, the competitors are far behind. Growpacker was one of the first to begin this process and therefore have acquired all, I mean all, the necessary licenses to make this a growers dream come true. Currently Growpacker has +450 clients in the pipeline and nearly 100 that have started the on-boarding process for production with upwards of 10 inquires per day. If only all start-ups could be so fortunate…
Another satisfying point about Growpacker is that they do what they say. By the end of 2018 they said that they would have all their licences and they did. They also said that they are working on a high-profile brand relationship with THC infused beer start-up, Ceria Beverages Company, and it was solidified.
Speaking of Ceria, let’s look at the advisory board and shareholders of Growpacker. Keith Villa, the original founding member of Blue Moon Brewery, America’s #1 craft beer with annual revenue exceeding $250M and brand value of over $1B now owned and operated by MillerCoors, is a special advisor and shareholder to the company. He is also the one spearheading Ceria.
Furthermore, the special advisory board is made up of InterContinental Beverage Capital; (IBC) founders Joe Messina, Stephen F. Horgan and Doug Christoph who have all held top executive positions at Coca Cola and MillerCoors. (IBC) is involved in serving financial and operational planning, debt restructuring, investment, re-branding, business performance, revenue growth and profitability. These three powerhouses make it clear that Growpacker is starting on a solid business foundation.
And if this weren’t enough, Jon Cooper founding member of Ebbu Inc. a U.S hemp research company recently acquired by Canopy Growth Corporation for $429M USD is also a special advisor and shareholder. He brings everything research and development on the hemp platform to push the boundaries of cannabis tech.
Now if this is not a formula for success, I don’t know what is. Combining the turn key production and distribution formula with some of the most successful people in business along with a company who is far ahead of its competition, feels as comfortable a stock pick as a good old THC infused Ceria beer! Watch out Amazon, here comes Growpacker.
About Growpacker
Growpacker is a fully-licensed cannabis co-packing and bottling company that operates in California, now the worlds fifth largest economy and Americas largest consumer market. Taking a bifurcated approach on the industry, Growpacker will have the ability to manufacture products for both the regulated cannabis market (dispensaries) as well as the open market for products that are CBD only (grocery, convenience store, etc). They have proprietary THC & CBD infusion technologies, allowing them to design and manufacture the most premium cannabis-infused products on the market, including both water and oil-based products.
About Momentum PR
Momentum PR is a cutting-edge public and investor relations consulting agency, representing companies within the Canadian investment community.
Since 2009, Momentum PR has been servicing small and mid-cap Canadian-listed public companies, seeking to increase their exposure across North America. The focus at Momentum PR is on building and driving brand awareness. Momentum PR cultivates new audiences in the media and investment communities by proactively engaging interested parties on behalf of client companies, through online and offline channels.
Disclaimer:
All editorial content contained herein is solely the responsibility of Momentum PR and does not reflect, in any way, the opinions of Growpacker
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Isabelle Arsenault
Media Relations
MomentumPR
p:+1.450.332.6939 m: +1.514.816.2611
w:www.momentumpr.com e: isabelle@momentumpr.com
- Published in Blog, Cannabis, growpacker, Marijuana, News Home, Technology
Canadian and US Cannabis Edibles and Consumer Products Market Set to Explode to US$ 4.1 Billion by 2022
Canopy Growth CEO Bruce Linton: “…related cannabis products have the potential to disrupt as much as $500 billion annually in non-smokable areas and industries: alcohol, sleep aids, appetite aids, sports drinks, medicines and pet care.”
If you can read them, the signs are there.
The marijuana edibles industry, that part of the recreational marijuana that be ingested as a candy, a chocolate, a candy bar or in a mixed drink or a beer is going to be huge and may very well eclipse that old standby the smokeable flower or bud.
During the summer ResearchAndMarkets predicted that the global cannabis infused edible products market would grow at an expected CAGR of 25.01% from 2018 to 2022. The infused beverage market would include CBD based
recovery drinks and tonics as well as potent THC infused beers.
An October 11, press release announcing a new report, “The Tasty Future of Cannabis Edibles,” by BDS Analytics and Arcview Research predicted that by 2022 the edibles market would exceed US$4.1 billion, up from US$1.5 billion, for the Canadian and US market in 2018.
A June article in Forbes ran the headline “New Data Shows that Smoking Marijuana is a Dying Trend.” The data it references is the 2018 Deloitte report on the emerging Canadian marijuana market and the Forbes story says, A recent analysis from Deloitte shows that “smokable marijuana” in the northern nation will generate in upwards of $5 billion in 2019. But the edibles sector is predicted to hit somewhere between $12 and $22 billion by the time the market is in full swing.”
According to the BDS and Arcview report the THC infused candy and chocolate market segment took the lion’s share of the US market at 60%. The press release quotes Troy Dayton the CEO of ArcView Market Research: “Established big brand food and beverage companies are beginning to take notice of the cannabis edibles market and this is likely just the tip of the iceberg.”
If anyone doubts that edibles and beverages are the next big thing they should remember Constellation Brands $4 billion investment in Canopy Growth. Of course if that doesn’t convince you then there is also the partnering dance between Coca-Cola and Aurora that somehow didn’t get off the ground. Just how big the market is going to be is still up for grabs.
In a video on TheStreet.com, Canopy Growth CEO Bruce Linton claimed that related cannabis products have the potential to disrupt as much as $500 billion annually in non-smokable areas and industries: alcohol sleep aids appetite aids sports drinks and medicines and pet care.
If you think the $500 billion figure was a bit too high Constellation Brands COO Bill Newlands predicted that the legal cannabis product market would hit $200 billion plus. “Our View is that in the next ten plus years, this is going to be a $200 billion business worldwide. And some would argue that’s understating the case.”
It’s not difficult to see why the edibles market segment is going to take off.
Smoking is, after all, bad for you. The more difficult question to answer maybe how to profit from what will be a long term market build out and development, one that, ResearchAndMarkets.com has predicted will grow at an astonishing rate of 25.91% CAGR for the years 2018-2022. At the moment almost every major Canadian marijuana company has either a beverage in development or edibles underway in a test kitchen. Edibles and beverages are made from oils and compounds removed from the plants by volatile or non-volatile extraction methods. One way of investing in this developing market lies in investing in those companies that are extracting THC and CBDs from marijuana and then selling it business to business for use in either medical marijuana or as food grade marijuana.
North Bud Farms (CSE: NBUD) is building out its 95 acre site in Low Quebec where it is in within 10 km of a major hydro power plant. Construction is scheduled to be finished Q1 2019 and at the moment is on time and within budget.
The company is also in the process of applying of for a production license under the Access to Cannabis for Medical Purposes Regulation (ACMPR). North Bud has cleverly tagged itself as Marijuana 2.0, in reference to the second wave of legal marijuana slated for October 2019, when the edibles and infused beverage market will be open for business. The company’s strategy is to supply two underserved markets by producing and selling certified pharmaceutical grade cannabis and GMP standard raw cannabis for the food and beverage industry. The company also intends to develop and market new products.
To that end it has recently signed a number of agreements that will help turn its words into action. On September 27, 2018 the company announced that it had signed an agreement with American firm Made By Science to license its cannabinoid infusion technology for food and beverage platform.
On October 17, 2018 North Bud announced that it had created a distribution company, “1017,” so named to commemorate the date of marijuana legalization Canada, and signed a letter of intent to acquire Janey’s, one of the six licensed marijuana accessory distributers in Ontario. Janey’s is also engaged in marijuana product development. North Bud intends to develop multiple products over a variety of product segments under the 1017 brand.
As of November 15, 2018 North Bud Farms, (CSE: NBUD) was trading at $0.25.
Given the predicted explosion in the marijuana consumables and edibles market laying a bet or two on companies in that field makes sense and one such company that bears keeping an eye on is Arev Brands International (CSE: AREV), formally Arev Nutrition Sciences. Arev originally saw life as a developer and marketer of coconut oil based health products. It is focussed on two distinct market sectors, consumer products and manufacturing as an ingredients supplier. Along the way the company also developed a unique extraction technology and this is where they fit into the consumables market segment.
In a press release on Bloomberg the company announced that it had reached a major milestone in extraction development with its partner Alternative Extracts Inc. Using its proprietary extraction system Arev has developed a
system that preserves flavour and aroma and which in the case of beverages may lengthen shelf life. It intends to manufacture finished oil products with proprietary strains bred to specifically address key health issues: anxiety, pain management, central nervous system disorders, insomnia and libido.
Arev also has an exclusive distribution agreement with the award winning full line of BARE Topical products.
In September 2018 the company completed its acquisition of BC Bud Depot. BCBD has one of the world’s largest cannabis seed banks. Over the last 14 years BCBD has won over 40 awards and was the first Canadian company to win an international award with “BC God Bud,” now Canada’s most award winning strain of all time.
On November 15, 2018 AREV was trading at $0.365.
This blog should not be construed as investment advice. Every investor is obligated to perform his or her own due diligence. In the interests of transparency Arev and North Bud Farms are both Momentum Public Relations clients.
- Published in AREV Nutrition Sciences, Blog, Marijuana, Medical Marijuana, NorthBud
TD Forecasts Marijuana Will Hike GDP by $8 Billion
The Chinese Are Coming
Synthetic CBDs and THC: Better Living Through Chemistry
TD Forecasts Marijuana Will Hike GDP by $8 Billion
Momentum Public Relations
Blog: September 26 2018
Just when you thought the Canadian marijuana industry was a slam dunk for becoming a dominant global force the Chinese are beginning to set up and take notice. According to a September story in The GrowthOp, the Postmedia marijuana industry news website, here come the Chinese.
Arcview Market Research and BDS Analytics have predicted that by 2027 the global marijuana market will be worth $US57 billion and you can be sure that Chinese business will see that as an attractive market. The Chinese will have to play catch-up, but catch-up is a game the Chinese play very well. Things will kick off when CannaTech: Hong Kong’s first cannabis investor symposium takes place on November 1st.
While Chinese investors will probably start to pour into the Canadian cannabis industry, they will as legislation changes, consider starting their own industry. Chinese herbal medicine has longed used marijuana as an ingredient.
URI Capital Management, one of the symposium sponsors was quoted in the story as saying: “Asia, more specifically China, is poised to leverage its unique advantages in Hemp and agriculture to become a dominant global leader. URI is proud to become the first Chinese financial conglomerate to focus on the Asian cannabis industry and will leverage the firm’s world-class research and investment resources to lead the way.”
If there is any doubt about the marijuana market drying up Canopy Growth (TSX:WEED) spun off its investment arm last Thursday and by Friday, Canopy Rivers Corp. (TSXV:RIV) market evaluation had more than doubled, according to a story in the Financial Post, to $1.6 billion. Before its IPO Canopy Rivers was valued at $600 million.
RIV has already made ten investments in Canada and one in Italy. According to the company website the investments include licensed producers, pharmaceutical formulators and retail.
As noted by Bloomberg it was the first time a bank, CIBC, had helped a marijuana company list on a Canadian stock exchange. CIBC led the deal with GMP Securities and Eight Capital.
The Bloomberg story contained the following quote: “We’re really trying to make this smart money that goes global,” Bruce Linton, chief executive officer of Canopy Growth and acting CEO of Canopy Rivers, said, “The scouting has been pretty active.”
Tilray (NASDAQ:TLRY) showed just how volatile marijuana stocks could be by rising 98% before plunging and then climbing back up to gain 44% on September 19, 2018. Tilray stock started climbing when the US FDA granted it permission to export medical marijuana for a trial in California as a treatment for essential tremors. The stock then came down to earth when a Florida Republican came down on the deal and said that the trial should be using American produced medical marijuana.
According to Bloomberg, Tilray shares rose to US$176 a share and then dropped like a stone to US$123 a share, finally ending the week up by 12%. Since it IPO in July, Tilray has risen by 800%.
Just as Aphria sold its interest in Liberty Health Sciences last week Aurora Cannabis (TSX:ACB) has spun off its American interests by spinning off Australis Capital (CSE:AUSA). Last Fall The TMX Group ruled that American federal overruled American state law and that consequently Canadian marijuana companies with American operations faced delisting if they did not exit the American market.
Like Canopy Rivers, Australis is an investment vehicle designed to aid American marijuana companies that have problems accessing capital and expertise. In an oversubscribed non-brokered pre-IPO private placement financing Australis raised $17 million at $0.20 a share. On Friday September 21st, Australis opened at $3.90 before closing at $3.16.
The next story should be filed under the 60s rubric of Better Living Through Chemistry. Cronos Group (TSX:CRON), one of the top Canadian vertically integrated marijuana producers, has announced a partnership with Boston-based Ginkgo Bioworks, a biotech startup. Under the partnership Cronos will fund research designed to produce synthetic CBDs and THC. Cronos is targeting a production price point of a thousand dollars a kilogram. The process will involve using fermentation to produce the cannabinoids.
Ginkgo Bioworks has had success producing expensive ingredients, perfume and flavours using synthetic DNA. The end product could be used in a variety of ways: including medical therapies, vaporizer cartridges and edibles. Cronos will invest up to $22 million in Ginkgo to fund research and development and in return for milestones give Ginkgo up to 14.7 million shares. In exchange Cronos will have the right to use and commercialize the resulting intellectual property.
Cronos is not the only marijuana LP looking into the future. On September 19th The Gazette reported that LP Organigram’s parent company, Organigram Holdings (TSXV:OGI), has invested $10 million in and formed an alliance with Hyasynth Biologicals, to develop synthetic phytocannabinoids, using the same techniques as Ginkgo, biofermentation. Hysaynth will be using its proprietary technique to produce the synthetic cannabinoids. As with Ginkgo, the process uses genetically engineered strains of yeast.
Finally, on September 19th the Financial Post reported that the Toronto-Dominion Bank had predicted that after legalization the marijuana industry will add up to $8 billion to the country’s real GDP. Canada’s measure of real gross domestic product will get a boost after the legalization of marijuana adds as much as $8 billion to the country’s economy, according to the bank. After legalization. Statistics Canada will face the daunting task of including both legal and illegal marijuana industry economic statistics in its forecasts.
Just how Statscan will assemble the black market statistics remains to be seen. Given that the illegal marijuana trade isn’t big on keeping records a lot of by guess and by golly will probably be used.
- Published in Blog
Coca-Cola Planning to Have Drinks With Aurora Cannabis?
Momentum Public Relations
Blog: September 18 2018
Coca-Cola Planning to Have Drinks With Aurora Cannabis
Global Soft Drink Market Pegged at US$605.6 Billion by 2025
Marijuana Industry Acquisitions Continue
Acquisitions, partnerships, branding and product development have all been on the increase in the legal marijuana industry this year as recreational marijuana legalization comes closer to becoming reality.
You can now begin to see a consumer product rollout that is remarkable in many ways. A new industry that cuts a broad swath in consumer goods is being developed and that Canadian industry is doing its best to reach out and conquer world markets. As well as medical and recreational marijuana CBD infused cosmetic and wellness products are being developed, as well as hemp clothing and THC infused beer.
On Monday September 17, 2018 the news broke that Coca-Cola (KO-NYSE) and Aurora Cannabis (ACB-TSX) were in talks about developing a non-psychoactive cannabis infused soft drink. CNBC reported that pot stocks jumped on the news with Aurora gaining more than 15% as of mid-day. Speculation exists that Coke wants to develop a CBD infused beverage in Canada so that it can launch it in America when marijuana laws there are relaxed.
Earlier in the summer Molson-Coors announced a deal with Hydropothecary (HEXO-TSX) to develop a THC infused beer. Marijuana is going mainstream faster than imagined and industry players are scrambling to gain a piece of what may be one of the last and biggest market rollouts.
Coca-Cola is the largest beverage company in the world and if the Molson-Coors (TAP-NYSE) Hydropothecary beer agreement didn’t give the industry legitimate credibility then the forthcoming agreement with Coca-Cola should. Based on information from an anonymous source the story said that if consummated the partnership would develop health-focused beverages or recovery drinks designed to alleviate inflammation, pain and cramping.
In a statement Aurora issued to CNBC the company described the infused-beverage space as having “incredible potential.” In a statement that Coca-Cola sent to CNBC Coke said: “Along with others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world. The space is evolving quickly. No decisions have been made at this time.” The anonymous source described the discussions as “serious.”
Grand View Research has predicted that the global soft drink market will hit US$605.6 billion by 2025.
Crop Infrastructure (CROP-CSE) announced on September 13, 2018 in a press release that it too was entering the soft drink market with a cannabis-infused beverage, Canna Drink, that would have zero calories, be non-GMO, ketogenic-friendly and be available in both tea and coffee versions. Crop Infrastucture Director and CEO Michael Yorke said in the release that: “We see it as a tremendous opportunity for Crop Infrastructure’s branding & IP portfolio and as an auxiliary opportunity for each of our cultivation tenants globally.”
“Functional beverages are a new class of products that offer beyond basic nutritional ingredients, including vitamins, minerals, herbs, amino acids and probiotics. We believe that cannabis’s medically known benefits will enhance our own formulations, so we are bang on target with our CANNA DRINK line.”
Crop Infrastructures is a sophisticated company that has modelled its business plan on REITs, creating a real estate type marijuana investment trust. It owns properties in jurisdictions where recreational marijuana is legal and offers tenants infrastructure, branding and expertise. The company has recently expanded to Jamaica . Crop has also announced that by the end of the year it will open two retail locations in Northern Italy to sell the Urban Juve product line of hemp oil infused wellness, cosmetic and therapeutic products.
While the secondary market, products infused with CBDs, is roaring into life, acquisitions and agreements are still being made as legalization approaches.
Aurora Cannabis’ $290-million all share deal to buy ICC Labs is the latest acquisition to fuel rising share prices. Aurora has already bought up to 10 companies in the last two years. The deal is a reminder that Canada is not the only marijuana playing field and that industry leaders are busily paving the way for international expansion when more countries legalize recreational consumption.
In a telephone interview with The GrowthOp, Postmedia’s marijuana news website, Aurora’s chief corporate officer Cam Battley said: “We feel a significant sense of urgency to rapidly establish a powerful global footprint. We see ICC as the jewel of the South American market. This is going to be our anchor in South America and we have very big plans for that continent.”
The jewel that prompted Aurora’s purchase was the fact that ICC has 70% or more of the Uruguayan market. Uruguay legalized marijuana in 2013, becoming the first country in the world to do so. As well as having majority market share in Uruguay, ICC Labs also comes with Columbian licenses to grow medical marijuana and an agreement to sell CBD products to Mexico.
In the meantime, Aphria (APH-TSX) has more or less cleared the decks by selling its interest in Liberty Health Sciences for almost $60 million. According to a Canadian Press article published on September 6, 2018 in the Financial Post Aphria has sold the shares to several investors and the deal contains an option to repurchase the shares within five years.
Aphria now has money in its war chest to finance further acquisitions and opportunities. TSX regulations forced the company to sell its shares in Liberty because marijuana is illegal under federal American legislation and Aurora was threatened with delisting if it did not comply. The company intends to return to the American market when regulations change, hence the buyback option.
Canada’s largest marijuana producer, Canopy Growth(WEED-TSX), appears to just keep getting bigger. On September 5, 2018 it announced that it had acquired Hiku Brands in exchange for Canopy Growth shares. The deal improves Canopy’s retail and branding position.
Hiku is an attractive acquisition for Canopy. It has a subsidiary, DOJA Cannabis, a licensed ACMPR producer with two British Colombia based production facilities in the Okanogan Valley. Another subsidiary, TS Brandco Holdings has one of four master retail licenses in Manitoba. The company also has a chain of retail outlets branded as Tokyo Smoke in British Columbia, Alberta and Ontario.
All of this only goes to show that the Canadian marijuana industry is a global leader and that as countries begin to decriminalize possession, Canadian companies will be able to significantly grow their operations because of their existing footprint. All the major Canadian marijuana producers have foreign operations.
This blog was written for information purposes only and should not be mistaken for investment advice. In the interests of transparency Crop Infrastructure is a Momentum client.