Demand for Legal Cannabis Continues to Rise Around the World
FinancialBuzz.com News Commentary
NEW YORK, Feb. 21, 2019 /PRNewswire/ -- As the cannabis market continues its rapid development, cultivators and suppliers alike are tasked with meeting the demands of various consumers. Various cannabis companies are locking in contracts and agreements to provide businesses and even certain countries with cannabis. Some of these countries are seeking suppliers for medical cannabis to treat cumbersome conditions such as cancer, mental disorders, and chronic pain. Meanwhile, there is still a growing demand within the recreational market, where businesses are developing cannabis in various forms such as tinctures, oil, vapes, and edibles. As legalization continues to spread around the globe, the demand will gradually increase, thus accelerating the overall cannabis industry growth. According to data compiled by Grand View Research, the legal marijuana market is expected to reach USD 146.4 Billion by the end of 2025, while also reaching a CAGR of 34.6%. Biome Grow Inc. (OTC: BIOIF) (CSE: BIO), Aleafia Health Inc. (OTC: ALEAF) (TSX-V: ALEF), AXIM Biotechnologies, Inc. (OTC: AXIM), Auxly Cannabis Group Inc. (OTC: CBWTF) (TSX-V: XLY), United Cannabis Corporation (OTC: CNAB)
After Canada legalized cannabis entirely, various countries and governments are mulling over the legalization of recreational use. However, with the growing adoption of cannabis, many suppliers and cultivators are struggling to meet the demand. Due to shortages, companies are working to establish more facilities to help efficiently produce more cannabis. Via Forbes, Scott Greiper, the President of Viridian Capital Advisors, said that the pace of legalization is accelerating around the world, not just in the U.S., as well as for both medical and recreational marijuana markets. Greiper highlights that the biggest drivers for creating a large consumer market are: the lifting of the stigma of marijuana; globalization; more advanced technology for agriculture, genetics, biotechnology, and the extraction business coming into a mom-and-pop industry. "This is a very dynamic marketplace for investors and acquirers," said Greiper. "This is driving companies to become more efficient and more profitable operators."
Biome Grow Inc. (OTCQB: BIOIF) (CSE: BIO) also listed on the Canadian Securities Exchange under the ticker (CSE: BIO). Earlier last week the company announced, "a Memorandum of Understanding ("MOU" or the "Agreement") providing Biome with preferential access to a high quality and low cost supply of Cannabidiol ("CBD") concentrate from CBD Acres Manufacturer Inc. ("CBD Acres").
The MOU is for a period of five years pursuant to which Biome may acquire up to 20,000 kilograms per year of sun-grown, hemp-based CBD extract from CBD Acres using its unique Nano lipid, solventless extraction process.
CBD Acres is founded by Canadian hemp farming pioneer, Mark Gobuty, who is also the founder of the Peace Naturals Project, Canada's first Marijuana for Medical Purposes Regulations licensed cannabis grower. CBD Acres is currently working with 4,500 acres of hemp farmland in Canada, including 1,000 acres of organic grow, which it expects to produce volumes that are equivalent to a 180 million square foot indoor cannabis production facility under the Canadian Cannabis Act.
'Through this Agreement Biome is demonstrating a cannabis company can offer significant quantities of high-quality product at industry disrupting economics with a made in Canada product. This can also be accomplished without spending substantial capital to build internal production facilities. Moreover, Biome will now be in a position to supply both its domestic and international customers with affordable medicinal and therapeutic products based on CBD in the volumes that are required.'
'CBD Acres is thrilled to have the visibility of a long-term partner for its bulk products business entering the market in the second half of 2019, and more importantly a strategic partner focused on commercialization in key medical-CBD markets, allowing CBD Acres to focus on growing and extraction innovation as well as its consumer products business,' said CBD Acres CEO Mark Gobuty.
Biome is considered a "related party" to CBD Acres as such term is defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") on the basis that Jacob Capital Management Inc., a significant shareholder in the capital of the Company, is also a significant shareholder in the capital of CBD Acres. However, due to the service-type nature of the arrangement with no commitment or obligation for Biome to utilize the service provided by CBD Acres or to acquire an asset or assets from CBD Acres, the MOU is not considered to be a "related party transaction" as defined under MI 61-101."
Aleafia Health Inc. (OTCQX: ALEAF) (TSX-V: ALEF) is a vertically integrated, national cannabis health and wellness company with major medical clinic, cannabis cultivation and R&D operations. Aleafia Health Inc. recently announced its global expansion with the closing of its previously announced investment in CannaPacific Pty Limited, a federally licensed Australian medical cannabis company located in New South Wales, Australia. CannaPacific is licensed by the Office of Drug Control (ODC) of Australia to cultivate medical cannabis (License MC020/18) and to research medical cannabis (License RL 012/18). CannaPacific has also applied for a manufacturer's license which has been reviewed by the ODC. Aleafia will assist CannaPacific in the establishment of dedicated medical cannabis clinics, with shared expertise across patient treatment and education, physician recruitment and training, treatment best practices and clinic operations. "This transaction will place Aleafia at the epicentre of what we expect will be a major growth centre in the global medical cannabis market," said Aleafia Chief Executive Officer Geoffrey Benic. "Aleafia will soon boast global distribution networks in Germany (upon completion of the Emblem acquisition) and Australia, complementing our cannabis cultivation, clinics and adult-use retail in Canada."
AXIM Biotechnologies, Inc. (OTCQB: AXIM) is a world leader in the research and development of cannabinoid-based pharmaceutical products. AXIM Biotechnologies, Inc. recently announced that the company has received a significant initial purchase order from Kannaway®, the first hemp lifestyle network to offer cannabidiol ("CBD") hemp botanical products, for its nutraceutical chewing gum product. "We are excited to work with such a large and well respected direct-selling company such as Kannaway® and to bring our nutraceutical chewing gum product to their worldwide audience," AXIM Chief Executive Officer John W. Huemoeller said. "This is our largest initial order from a singular customer to date and it presents a whole new revenue opportunity for the nutraceutical division of AXIM. Our flagship nutraceutical chewing gum product utilizes AXIM's patented chewing gum delivery system for cannabinoids that creates a high-quality and user-friendly experience that we are confident Kannaway® consumers will enjoy and be able to distribute through their networks successfully."
Auxly Cannabis Group Inc. (OTCQX: CBWTF) (TSX-V: XLY) announced on January 24th, that the Company has signed a definitive agreement with 2368523 Ontario Limited (d/b/a) Curative Cannabis. The Company will acquire 46% of the common shares of Curative and enter into a long-term cannabis purchase and sale agreement to fund the construction and development costs of Curative's cannabis cultivation facility in Chatham-Kent, Ontario.
United Cannabis Corporation (OTCQB: CNAB) is a biotechnology company dedicated to the development of phyto-therapeutic based products supported by patented technologies for the pharmaceutical, medical, and industrial markets. United Cannabis Corporation recently announced that it has entered into a Joint Venture with Blue Water Green Bridge, LLC (Blue Water) a South Carolina company, to establish an industrial hemp processing plant. The new venture is named Magnolia Botanicals LLC, (''Magnolia''). Initially, Magnolia will provide industrial hemp extraction services for South Carolina farmers working under the 2018 Federal Farm Bill and the South Carolina Department of Agriculture's Industrial Hemp Pilot Program. The Company expects to expand the services offered to include purification, testing and processing, as well as packaging, fulfillment, and secure storage capabilities. Longer term, Magnolia intends to cultivate and grow industrial hemp in the State. Earnest Blackmon, Chief Executive Officer of United Cannabis, commented on the announcement, ''The Company's successful expansion into Colorado's industrial hemp sector was the impetus for us to seek other regions where market demand was not being met and our expertise could provide value. Working in conjunction with Blue Water not only gives us a foothold in the South East's burgeoning industrial hemp market, it also provides us with a strong financial partner.''
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