Recreational Product Sales Accelerate Growth in the Global Cannabis Market

FinancialBuzz.com News Commentary

NEW YORK, Aug. 27, 2019 /PRNewswire/ -- The cannabis industry has gained tremendous momentum throughout the past few years due to worldwide efforts to promote legalization. More and more countries are understanding the therapeutic benefits of cannabis, and therefore debunking common misconceptions surrounding the product. Globally, cannabis is predominantly being adopted for medical applications, while the recreational market is heavily prevalent within the North American region. Moreover, some countries have decided to decriminalize recreational use, meaning that the consumption of cannabis in moderate amounts will result in a fine rather than jail time. The remarkable growth of the cannabis industry has now allowed it to compete against major international industries. To put it into perspective, in the U.S., the cannabis industry now rivals large corporations such as McDonalds and Netflix, according to data published by Marijuana Business Factbook. By the end of 2019, Marijuana Business projects that sales of legal cannabis in the U.S. could eclipse those of firearms and ammunition. To note, a significant portion of the U.S. cannabis revenue is derived from recreational sales. For instance, states such as Colorado, California, Nevada, and Washington collectively deliver over billions of dollars in legal sales annually. However, medical cannabis is much more broadly available and accessible than recreational cannabis. Nonetheless, it is the large consumer base in legal recreational markets that is aggressively accelerating the global cannabis market. According to data compiled by Ameri Research, the global legal marijuana market was valued at USD 14.3 Billion in 2016. By 2024, legal marijuana global sales are projected to reach USD 63.5 Billion while exhibiting a CAGR of 21.1% from 2017 to 2024. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Aphria Inc. (NYSE: APHA) (TSX: APHA), Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT), OrganiGram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI), Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD)

As more regions move towards legalization, businesses and federal officials are tasked with meeting consumer demand. Last year, Canada fully legalized cannabis use, which allowed consumers to freely use cannabis for both medical and recreational purposes. During the first weeks of legalization, businesses witnessed their supplies deplete rapidly and struggled to meet the surge of orders. As a result, Canada witnessed a nationwide cannabis shortage. The shortage was primarily a result of restrictions and regulatory guidelines imposed by the Canadian federal government. Specifically, the Canadian government curtailed cultivation amounts as well as limited cultivation licenses. However, once the industry began to ramp up, Canadian provinces began to issue more licenses to operators. Many companies that have received cultivation licenses were geared towards large scale cultivation in order to meet consumer demands. While large companies can meet the overall consumer demands through mass production, the quality of cannabis products is severely lacking, which deters avid users. Consequently, smaller cultivators have decided to focus more on quality control rather than mass production. A handful of small cultivators have engaged in "craft cannabis," which is the artisanal profession of creating premium cannabis strains. Compared to large-scale cultivators, smaller operators tend to engage in a more natural and organic process by avoiding the use of artificial byproducts such as pesticides. Additionally, craft cultivators also hand trim plants in order to maintain the cannabinoid content within the buds. The extensive effort craft cultivators undergo ultimately produces top-shelf quality, which can compete against large cultivators that mass produce products. "Nothing evokes passionate debate in the cannabis community like the threat of big business taking over. The arguments against big marijuana fill the internet. The heartfelt plea to preserve small farms is echoed throughout the US, Canada, and Jamaica," said Michael Camplin, Sales Manager for GGS Structures. "The real reason craft cannabis will never die, is human beings want choice. We all want freedom of choice in our lives. This is the foundation that many of today's cannabis farmers started on, and this is the essential human spirit."

Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT) is also listed on the Canadian Securities Exchange under the ticker (CSE: CRFT). Earlier this month, the Company announced that "its wholly owned subsidiary, BC Craft Supply Co. Ltd ("BC Craft"), has signed a supply agreement with Canada's first licensed micro processor, North 40 Cannabis ("North 40").

Founded by Gord Nichol in Nipawin, Saskatchewan, North 40 Cannabis received its micro-cultivation and micro-processing licences from Health Canada on July 26, 2019. Under the agreement with Pasha, North 40 will supply BC Craft with North 40's annual production, to be sold as dried flower and other cannabis products in Canada.

'I'm absolutely thrilled to have signed an agreement with a company like Pasha,' said Gord Nichol, founder of North 40 Cannabis. 'They have shown micro cultivators like me that they are dedicated to ensuring craft producers in Canada will flourish under legalization. I'm excited to move ahead and looking forward to our first harvest this year.' North 40 Cannabis will plant its first legal crop in August 2019 and harvest later in the fall.

With Canada's current licensed cannabis producers only able to supply an estimated 15 per cent of what Canadians are consuming, Pasha is optimistic that, in addition to its previously established supply agreement with Hearst Organic, this new supply agreement with a licensed micro cultivator and micro processor will help correct the cannabis supply imbalance and bring exciting new products to market. Each micro cultivator in Canada will be able to produce approximately 500 kilograms of cannabis per year, while each micro processor can process up to 600 kilograms of cannabis per year. Canada has tens of thousands of craft producers operating in the illicit cannabis market and Pasha's wholly-owned subsidiary BC Craft Supply Co. is focused on helping as many small farmers transition into the regulated market as possible.

'Signing this agreement with Canada's first micro processor is very significant as it affirms BC Craft's business model with not only the micro-cultivation market but also now with processors,' said Jason Longden, CEO of Pasha Brands in reaction to the news. 'North 40 has established a state-of-the-art cultivation and processing facility and we are proud to work with such an innovative team. This is simply the next step in fulfilling our goal of becoming the biggest producer of craft cannabis products in Canada and I'm confident North 40 will help us bring Canadians more of the cannabis that they're looking for.'

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"

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=DiuXVssrpos

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 that its subsidiary Marigold Projects Jamaica Limited ("Marigold") has received a retail Herb House licence from Jamaica's Cannabis Licensing Authority ("CLA") to open its first store in Kingston, Jamaica. Marigold Projects, a 49 per cent owned subsidiary of Aphria Inc., holds a Tier 3 licence to cultivate more than 5-acres of land with cannabis for medical, scientific and therapeutic purposes. Marigold Projects cultivation farm is fully operational, and inventory at opening will exceed 2,700 kgs. The company maintains an additional 20-acres of vacant land in anticipation of expanding its cultivation operations, as well as a 10-acre farm in St Catherine. "The approval of Marigold's first Herb House signals an exciting time for Aphria. We believe that there is tremendous opportunity in Jamaica from a domestic and international perspective and we look forward to bringing Sensi products to the market," said Interim Chief Executive Officer, Irwin D. Simon. "Receiving this licence is testament to our team's hard work and dedication in growing our Caribbean and LATAM business as we provide high-quality cannabis products in regions. Aphria will continue to execute on our business plan to create long-term value, sales growth, and profitably in Canada and internationally."

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) specializes in the extraction, purification and formulation of health and wellness products. Neptune Wellness Solutions Inc. recently announced that its Solutions Business has begun offering turnkey product development solutions with hemp-derived ingredients to business customers in the United States. A U.S.-based supply chain of licenced hemp extract producers has been established, and initial purchase orders are now being processed. Neptune boasts long-standing experience in the management of custom and white label turnkey product development solutions comprising a diverse array of product forms including softgels, liquids, topicals, emulsions, and water-dispersible powders. Branded ingredients and products that have contributed to Neptune's success, such as MaxSimil® and ECSentialsTM formulations, could potentially be used in unique combinations with hemp ingredients, particularly as the U.S. regulatory framework around hemp extracts and cannabidiol (CBD) evolves. "The U.S. market for hemp is developing rapidly and represents a significant opportunity for the consumer products industry. Neptune is now offering products and services to American brands that want to create a unique hemp-based portfolio, with products made exclusively in the U.S. for the U.S." said Jim Hamilton, President and Chief Executive Officer of Neptune.

OrganiGram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI) is a NASDAQ Global Select and TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada. Organigram Holdings Inc. (NASDAQ Global Select; TSX-V: OGI) the parent company of Organigram Inc. recently announced that it has entered into an advance payment and purchase agreement (the "Payment Agreement") with 703454 N.B. Inc. (carrying on business as 1812 Hemp) ("1812 Hemp")  under which the Company will pre-fund hemp purchases to receive access to as much as 60,000 kilograms of dried hemp flower to be harvested in calendar 2019 for extraction into cannabidiol ("CBD") isolate. "Access to a large, consistent volume of CBD-producing hemp has become increasingly important as Canadians express their demand for CBD-rich products for use in both recreational and medical capacities," said Greg Engel, Chief Executive Officer, Organigram. "We've heard the call for CBD in the market and this agreement positions Organigram to meet that demand."

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 has completed its inaugural shipment to the Ontario Cannabis Store, marking the Company's entrance into Canada's recreational market. Ontario consumers will soon be able to experience TGOD's acclaimed Unite Organic dried flower, the Company's high THC signature strain. "We are thrilled to introduce Unite Organic dried flower to Ontario adult consumers. Launched earlier this year with our Grower's Circle, Unite Organic was highly praised by medical patients. Our small pilot confirmed that market demand for premium certified organic cannabis exceeds available supply," commented Brian Athaide, Chief Executive Officer of TGOD.  "Today's milestone gets us one step closer to achieving our vision of becoming the world's leading brand for premium certified organic cannabis in both medical and recreational segments.  We look forward to continuing to expand our distribution network as we ramp up production in the months ahead."

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