Loosening Regulations Herald the Expansion of the Cannabis Market
FinancialBuzz.com News Commentary
NEW YORK, Aug. 5, 2019 /PRNewswire/ -- The cannabis industry has gained tremendous momentum throughout the past year due to multiple ongoing legislative efforts to promote legalization. More and more countries are beginning to realize that the common stereotype revolving around cannabis is a misconception. Moreover, people are also understanding that cannabis is much more versatile than they initially believed. Predominantly, cannabis is being used for medicinal purposes, however, certain regions around the world also allow for moderated or completely legal recreational use. For instance, countries such as Colombia and Spain have decriminalized cannabis, meaning consumers can use it in limited and moderated amounts. On the other hand, a handful of U.S. states, Canada and Uruguay have fully legalized cannabis, allowing adults to legally purchase recreational supply from legal channels. The U.S. and Canada dominate the global cannabis scene because of their large and already established consumer bases. In particular, the U.S. is the primary global driver because of its early adoption, as the country began utilizing cannabis for medical use back in the late 1990s and now, more than half the country has authorized the use of cannabis for medical applications. Overall, the U.S. alone generates billions of dollars each year in cannabis sales. However, as the industry continues to mature, it is expected for the U.S. market share to dwindle as other global regions fill the gap, with investors and analysts focusing on the emerging Canadian market. Nonetheless, the U.S. is still expected to be the primary global growth driver and together, the U.S. and Canada are expected to create a flourishing and thriving global cannabis market. According to data compiled by Imarc Group, the North American legal cannabis market is expected to reach USD 35 Billion by 2023 from USD 8 Billion in 2017. Additionally, the market is expected to register a healthy CAGR of 28% throughout the forecast period. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Aphria Inc. (NYSE: APHA) (TSX: APHA), Charlotte's Web Holdings, Inc. (OTC: CWBHF) (TSX: CWEB), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD)
Even though Canada legalized cannabis' recreational use, the country's industry is still heavily impeded by strict government regulations. And while the government may be attempting to protect its citizens, the regulations have severely impacted business and their financials. In particular, many small businesses, like brick-and-mortar retailers, were impacted the most, causing many to shut their doors. On the other hand, large corporations that were already well established before legalization are continuing to thrive. Specifically, a handful of corporations dominate the overall marketplace because they have launched global operations and control the majority of the market share in certain Canadian provinces. Overall, the combination of the regulations, as well as fierce competition, is causing emerging businesses to struggle. However, "craft cannabis" cultivators have come into the spotlight because of their premium cannabis products. Craft cannabis is the end product of a hard, attentive process of growing high-quality and organic buds. The meticulous process is tedious because it requires cultivators to nurture each individual plant to ensure that it maintains its cannabinoids. Primarily, most small businesses engage in craft cannabis because it is much easier for them to manage. On the other hand, large corporations are mainly focused on harvesting large volume and providing consumers with inexpensive cannabis. While some consumers may prefer cheaper cannabis, enthusiasts often opt for premium cannabis that is generally more expensive. Similar to many other retail industries, consumers have a multitude of options to choose from. As a result, the cannabis marketplaces appeals to two dynamic ends of consumers, creating a larger overall user base. "Craft growers embody the genesis of this industry," says David Robertson Director of the Craft Cannabis Association. "Craft growers are the fountain from which modern knowledge and cultivars have issued forth to reignite the world's love of cannabis and we would not have any of these world changes without them."
Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT) is also listed on the Canadian Securities Exchange under the ticker (CSE: CRFT). Earlier last week, the Company announced, "the acquisition of a national brand known as Earth Dragon Organics – a leading pre-legalization manufacturer and purveyor of small batch cannabis-infused topicals, based in British Columbia.
Since its inception in 2012, Earth Dragon Organics has typified the variety of smaller, female-led and patient-focused businesses that flourished during cannabis prohibition. Earth Dragon Organics supplied THC- and CBD-infused topical products to those seeking relief from muscle pain, arthritis, nerve pain, migraines, and multiple sclerosis, among other conditions, combining cannabis with local, organic ingredients including arnica and essential oils to harness the qualities of THC and CBD.
"Becoming part of the Pasha Brands family is a huge milestone for Earth Dragon Organics in that it will allow us to scale up and make these handmade, craft products more available to the entire country," said Tessa Serra, founder of Earth Dragon Organics and Pasha's newly hired product manager. "This partnership is a great match and I'm looking forward to the evolution that is about to take place."
The line of handmade products including balms, creams, body butters, sunscreen, bath salts and more are not currently available as all sales have ceased to prepare their entrance to the regulated framework with product manufacturing located at Pasha's licenced processing facility on Vancouver Island. Pasha has acquired all of the brand's trademarks, names and intellectual property and will re-launch the brand in the Canadian regulated market after the appropriate regulations is passed on October 17, 2019. According to the federal Canadian Cannabis Survey 2018, in the last year alone, the number of Canadians using topicals for pain relief has doubled (from seven to 14 percent).
"This is exactly the kind of business legalization has been leaving behind, and Pasha is honoured to help bring Tessa's passion for creating sustainably made, handcrafted cannabis-infused topicals into the legal market," said Patrick Brauckmann, Executive Chairman of Pasha Brands. "We're lucky to have her skillset as a product developer and manufacturer on the Pasha team, and glad we will be able to make her cherished products available again soon."
Following the passing of regulations that will enable licensed producers to make and sell edibles, extracts, and topicals, Pasha will seek provincial and territorial distribution for the brand. The company has already submitted an Earth Dragon Organics product line in an application to the Ontario Cannabis Store.
About Earth Dragon Organics: Inspired by the cannabis conscious community of Salt Spring Island BC, Earth Dragon Organics is a craft cannabis topical brand embodying the natural beauty of the West Coast. Highlighting the profound benefits of cannabis and the alchemy of traditional herbal remedies, Earth Dragon Organics' innovative skincare line offers nourishing treatments for all skin types and conditions.
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 subsidiary, Medcann Health Products Ltd., is a Health Canada licensed cultivator and processor with a licence to sell medical cannabis products in Canada. Pasha and BC Craft are also developing a craft cannabis campus, which is dedicated to bringing craft quality into the newly legal cannabis market in Canada. BC Craft 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" and on the FSE under the symbol "ZZD". For more information, please visit www.pashabrands.com"
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Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000 kg per annum and sales and operations in 24 countries across five continents, is one of the world's largest and leading cannabis companies. Aurora Cannabis Inc. recently announced that it had received Health Canada licenses for outdoor cultivation at two Canadian sites. The new sites in Quebec and British Columbia will be used for cultivation research to develop new technology, genetics and intellectual property in order to drive sustainable, high-quality outdoor production. Aurora purposefully chose the outdoor sites because they represent two different growing environments. The company will conduct research on cultivation techniques to further excel at growing cannabis in varying climate conditions and will examine approaches to environmentally sustainable cannabis agriculture. "Aurora believes in innovative operations and intensive research and we're applying our approach to outdoor grown cannabis," said Aurora Chief Executive Officer Terry Booth . "Our team plans to use these areas to ensure we are able to consistently grow the high-quality cannabis Aurora has become known for around the world. We're proud to be a Canadian company and this is a further commitment to research and job creation in Canada."
Aphria Inc. (NYSE: APHA) (TSX: APHA) is a leading global cannabis company driven by an unrelenting commitment to our people, the planet, product quality and innovation. Aphria Inc. recently announced several new executive appointments including James Meiers to the role of Chief Operating Officer, Aphria Leamington, Tim Purdie as Chief Information Officer & Chief Information Security Officer, and Maureen Berry as Vice President, Corporate Human Resources. The Company also announced that Jakob Ripshtein, Aphria's President, will resign from the Company. His current responsibilities will be shared among the existing senior leadership team. "On behalf of the Board of Directors and Aphria team, we thank Jakob for his contributions to the Company over the past year and wish him well in his future endeavors. He has been instrumental in assembling the incredible team we are fortunate to have today that will carry his responsibilities forward," said Irwin D. Simon, Interim Chief Executive Officer of Aphria Inc. "I am very pleased to welcome Jim and Maureen to Aphria, and to promote Tim. A top priority for us is to continue to build our executive talent and culture. We believe today's appointments demonstrate our commitment to adding depth, experience and leadership to our team as we further advance Aphria's strategic priorities in Canada and around the world. At Aphria, we remain focused on creating long-term shareholder value by leveraging our strong brand positioning, superior distribution model, product innovation, industrial scale cultivation and automation, medical-use leadership, and our strategic global platform, which we intend to amplify using proceeds from the Company's recent USD 350 Million offering," continued Simon. "We are pleased to share that the ramp-up of our growing operations in Parts IV and V at Aphria One are progressing smoothly and Aphria One is on-track to reach its annualized production capacity of 110,000 kilograms by the end of 2019"
Charlotte's Web Holdings, Inc. (OTCQX: CWBHF) (TSX: CWEB) is the market leader in the production and distribution of innovative hemp-derived cannabidiol wellness products. Charlotte's Web Holdings, Inc. recently unveiled its newest CBD product line - hemp extract-infused CBD Gummies – made with whole-plant extract from its prized hemp genetics and featuring synergistic functional ingredients to support specific health related functions including everyday stress, sleep, and recovery from exercise or active lifestyles. The gummies feature Charlotte's Web whole-plant hemp extract made from the Company's proprietary hemp genetics that people know and trust. Charlotte's Web extracts contain a full-spectrum of 80+ naturally occurring phytocannabinoids plus terpenes and flavonoids. In addition, the three varieties of gummies are uniquely formulated and enhanced with functional herbs and botanical supplements that work in synergy to further support a targeted wellness focus. "Gummies are a very popular edible format as a result of convenience and measurable consumption," stated Kelsey Morrison, Associate Director of Product Development at Charlotte's Web. "This new delivery format from Charlotte's Web provides an easy bite-sized way to ingest full-spectrum hemp-extract CBD."
The Green Organic Dutchman Holdings Ltd. (OTCQX: TGODF) (TSX: TGOD) is a publicly-traded, premium global organic cannabis company, with operations focused on medical cannabis markets in Canada, Europe, the Caribbean and Latin America, as well as the Canadian adult-use market. The Green Organic Dutchman Holdings Ltd. recently announced that it had secured a cannabis supply agreement with Alberta Gaming, Liquor & Cannabis ("AGLC"), further expanding its footprint in Western Canada. AGLC, under the brand Alberta Cannabis, is Alberta's legal, non-medical online cannabis store. "Alberta is an important market for us as we continue to expand our distribution channels across Canada," commented Brian Athaide, Chief Executive Officer of TGOD. "With our production facilities in Hamilton, Ontario and Valleyfield, Quebec coming online in phases, we are thrilled to start distributing TGOD's premium certified organic cannabis to AGLC."
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