Evolving Consumer Tastes Spur Demand for Craft Cannabis

FinancialBuzz.com News Commentary

NEW YORK, June 5, 2019 /PRNewswire/ -- Following the recent legalization of cannabis in Canada and the continued efforts in the U.S., a spur of recreational cannabis dispensaries have begun to emerge. Recreational dispensaries sell cannabis-based products such as flowers, oils, tinctures, topicals, and many others, which anyone can purchase as long as they are of legal age. Every individual consumer has a different tolerance level, meaning that the products may have varying effects. For instance, a 1:1 CBD to THC ratio is a balanced potency and recommended for users who can handle the psychoactive properties of THC. On the other hand, less avid users are more inclined to purchase an 18:1 CBD to THC ratio product. An 18:1 ratio is high in CBD and is geared towards more novice users who don't intend to get 'high', according to Care By Design. CBD is the non-psychoactive component of the cannabis plant, while THC is known as its psychoactive derivative. Generally, recreational dispensaries sell more highly concentrated THC products, while medical facilities are more likely to offer high CBD products. Additionally, CBD and THC levels can be altered by using special farming techniques. For instance, cultivators growing high THC flower are looking to produce more trichomes on the plant. Trichomes can be found on various plants, however, on the cannabis plant, trichomes can determine the strain's potency and effectiveness. The outcome of the trichomes can be manipulated by prolonging harvest time, changing light levels, and curing the bud. The fact that cultivators and growers can alter the outcome of certain plants by creating stronger or dormant strains is creating a whole new dimension to the user base. Consumers now have the option to choose from a high THC strain or a high CBD strain depending on their taste and intended use. According to data compiled by Verified Market Research, the global marijuana market was valued at USD 42.20 Billion in 2016. By 2025, the market is expected to reach USD 466.81 Billion while registering a CAGR of 35.3% from 2018 to 2025. Pasha Brands Ltd. (CSE: CRFT), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Altria Group, Inc. (NYSE: MO), Aphria Inc. (NYSE: APHA) (TSX: APHA), Curaleaf Holdings, Inc. (OTC: CURLF) (CSE: CURA)

Lower-quality cannabis buds tend to be affected by environmental factors such as a lack of light or excessive heat. These specific factors can cause trichomes and other parts of the cannabis plant to under-develop, leading to a weaker strain. In order to combat such variables, cultivators and growers began to engage in "craft cannabis." Craft cannabis is similar to other craft artisan professions where the producers pay close attention to each individual part of the process. In terms of the cannabis field, growers focus on each specific aspect from seed to sale. Specifically, craft cannabis growers stray away from using toxic chemicals and pesticides in order to produce a more natural product. Moreover, the growers are more likely to hand-trim the flowers so the buds don't lose their potency and flavor. And as a result, consumers can expect more natural, cleaner, and stronger products. "A lot of the licensed producers right now, their goal as publicly traded companies is producing the cheapest cannabis possible for the commercial market," said Lisa Campbell, Chief Executive Officer of Lifford Cannabis Solutions. "A lot of people say hand-trimmed buds is craft, so the trim is really important. If it's dense and not fluffy, it's great, and obviously, smell and flavour are factors … It's like getting a bottle of wine for thousands of dollars – there will be certain products that will fetch a premium."

Pasha Brands Ltd. (CSE: CRFT) yesterday announced the, "appointment of Jason Longden to the position of CEO, effective immediately.

Longden brings over 30 years of experience in the food and regulatory industry to Pasha. His knowledge and expertise in operating Health Canada approved facilities and his dynamic supply chain management skills will be integral in establishing Pasha as the global leader in craft cannabis and bringing the vision for the brand to life.

"I'm thrilled to have been given the opportunity to lead this dynamic organization and its highly experienced management team at such an important time for the industry," said Longden. "Much has been done to establish Pasha as the craft cannabis leader in Canada, now we will be looking to do so internationally."

Prior to joining Pasha, Longden was the Chief Operating Officer of Silver Hills Bakery—a family-owned company that includes One Degree Organic Foods and the wildly popular Squirrelly Bread^®. In this position, he played a major leadership role in building out the business to over 300 employees during a high growth period wherein the company had significant revenue growth and improved profitability. Before his time at Silver Hills Bakery, Longden was Chief Operating Officer of Garden Protein International (Gardein) where he led the company through a critical transition period resulting in the successful sale to a major US company.

"The growth stage in any organization is one of the most critical,'"said Patrick Brauckmann, Executive Chairman of Pasha Brands. "Having experienced talent lead us through this time will be a key to our continued success. We welcome Jason and are confident that his longstanding record of leading companies to successful growth will repeat itself with Pasha."

About Pasha Brands: Based in Vancouver, British Columbia, Pasha is a vertically integrated, prohibition-era brand house firmly rooted in BC's craft cannabis industry, which boasts an international reputation. With proven capabilities in cannabis cultivation, genetic research and development, product processing, and retail, Pasha is uniquely positioned in the new legal cannabis market through its network of hundreds of craft cannabis suppliers under the Pasha umbrella. Pasha's subsidiary, BC Craft Supply Co. Ltd., is developing a craft cannabis campus, which is dedicated to bringing craft quality into the newly legal cannabis market in Canada. BC Craft Supply Co. Ltd. is driven to assist craft growers in obtaining security clearance and licensing to grow as micro-cultivators, specializing in education and compliance to bring growers into the regulated cannabis supply market. Pasha's common shares trade on the CSE under the symbol "CRFT". For more information, please visit www.pashabrands.com" 

For our latest "Buzz on the Street" Show featuring Pasha Brands Ltd. recent corporate news, please head over to: https://www.youtube.com/watch?v=WHhCdxe0GyM

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. Canopy Growth Corporation recently announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. The Company has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY. Design activities will commence immediately with construction commencing this summer. The vision for the property is to build the infrastructure necessary to support hemp-derived cannabinoid extraction and related manufacturing together with providing an opportunity for participation by other businesses in the hemp industry. "As we establish a stronger foothold in the exciting US market, we want to do so in a way that prioritizes local vendors and creates meaningful career opportunities for people in the communities where we operate," said Bruce Linton, Chairman & Co-Chief Executive Officer, Canopy Growth. "The vision for our investment is to create an eco-system that inspires new entrepreneurs and generates more economic stimulus than a single company can offer. As we build the facilities, we'll also attract like-minded businesses who share our excitement for the emerging hemp and hemp-derived cannabinoid markets."

Altria Group, Inc. (NYSE: MO) wholly-owned subsidiaries include Philip Morris USA Inc. (PM USA), U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co. (Middleton), Sherman Group Holdings, LLC. Altria Group, Inc. recently announced that it had entered into an agreement to acquire newly issued shares in Cronos Group Inc. (NASDAQ: CRON), a leading global cannabinoid company, headquartered in Toronto, Canada. The transaction represents a 45% equity stake in Cronos Group, at a price of CAD 16.25 per share, for an aggregate investment by Altria of approximately USD 1.8 Billion (approximately CAD 2.4 Billion). This investment positions Altria to participate in the emerging global cannabis sector, which it believes is poised for rapid growth over the next decade. It also creates a new growth opportunity in an adjacent category that is complementary to Altria's core tobacco businesses. Altria expects its investment to help Cronos Group accelerate its growth strategies and its R&D and intellectual property development. Additionally, Altria will provide expertise to help Cronos Group thrive in the growing global cannabis market. These services may include regulatory affairs, regulatory science, compliance, government affairs and brand management. "Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria," said Howard Willard, Altria's Chairman and Chief Executive Officer. "We believe that Cronos Group's excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential."

Aphria Inc. (NYSE: APHA) (TSX: APHA) is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Recently, Aphria Inc., through its subsidiary Aphria Deutschland GmbH, launched the Company's first CBD-based nutraceutical, the first product in its CBD-based cosmetics line for the German market. Featuring CBD derived from hemp, the CannRelief brand of products are being produced in the European Union and distributed by the Company's subsidiary, CC Pharma, which has access to more than 13,000 pharmacies throughout Germany. CannRelief CBD oils are being sold in both a 5% and 10% CBD concentration and can be found in select stores across Germany. A range of skincare and other products, including creams, serums and masks will be introduced under the CannRelief brand in a phased rollout in 2019. "We are excited to introduce our first brand of CBD products for the German nutraceutical and cosmetics market," said Jakob Ripshtein, President of Aphria. "Supported by our extensive distribution network through CC Pharma, CannRelief provides a natural extension to Aphria's growing business opportunities in the German medical cannabis market. We look forward to providing a full range of CannRelief CBD products this year."

Curaleaf Holdings, Inc. (OTCQX: CURLF) (CSE: CURA) is the leading vertically integrated multi-state cannabis operator in the United States. Curaleaf Holdings, Inc. recently announced it has acquired exclusive rights to operate the Emerald dispensary in Gilbert, AZ, whose license is held by Absolute Healthcare, Inc., an Arizona non-profit corporation. The dispensary will be rebranded as Curaleaf after the transaction closes. Emerald is the only dispensary licensed to operate in the Town of Gilbert which is located in the Metro Phoenix area. It is one of Arizona's largest and longest standing medical cannabis retailers, serving over 44,000 unique patients since 2014. With over USD 1 Million in revenue in March 2019, it is one of the highest grossing dispensaries in the state. Gilbert, located in the East Valley, is highly complementary to Curaleaf's existing network of dispensaries in Phoenix. "This store fits very well into our existing footprint in Phoenix and is expected to be immediately accretive," said Joseph Lusardi, Chief Executive Officer. "Combining Emerald's large patient base with Curaleaf's established supply chain is anticipated to generate strong earnings and enhance patient care in Arizona."  

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