NEW YORK, June 21, 2019 /PRNewswire/ -- New York, one of the largest states in the U.S., failed to reach a mutual agreement to move forward with legalizing recreational cannabis. If New York was to implement recreational cannabis legislation, it would have potentially been the 12th state to fully legalize cannabis in the country. Colorado and Washington were the first two states to legalize adult-use cannabis and more recently, Illinois became the 11th state to pass recreational legislation. Despite New York's decision to hold off on the recreational ballot, Governor Andrew Cuomo signed medical cannabis legislation into effect back in 2014. The same year, New York City's Mayor Bill de Blasio directed the New York Police Department to stop arresting cannabis offenders and instead issue tickets. Similar to New York, other states such as Connecticut, Minnesota, New Hampshire, New Jersey, and Rhode Island are exploring opportunities within the industry. In particular, Rhode Island's Governor Gina Raimondo has been cautious about entering into the industry, however, her stance has shifted recently. Raimondo noted that Rhode Island may potentially legalize cannabis due to the pressure if its neighboring states decide to legalize adult-use cannabis. Notably, Canada became the second country ever to fully legalize cannabis in October 2018. Canada's decision marks a historic milestone within the industry because it is the first time a major world power decided to legalize cannabis. Canada is expected to influence other nations as countries such as New Zealand, Australia, Spain, Germany, France, Italy, and the U.S. are possibly looking towards legalization as well. 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. Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), Aphria Inc. (NYSE: APHA) (TSX: APHA), KushCo Holdings, Inc. (OTC: KSHB)
In regions where cannabis has been legal for some time now, the industry has rapidly evolved from the stereotypical scene. The common perspective of cannabis is that most people believe consumers smoke flower through joints or other paraphernalia. However, advancements within the industry have introduced new products such as concentrates, extracts, and edibles. Overall, traditional flower is becoming rapidly outdated and less popular among consumers because producers have been able to manufacture much more potent and effective products. For instance, a cultivator can grow a sativa-dominant strain, meaning it provides users with a more cerebral-high effect. While the strain may be strong, the strain can be even stronger if it were extracted into a form of oil or wax. Additionally, waxes and oils' effects last much longer and impact the user at a quicker rate compared to flower. Moreover, cultivators can create a more potent product by altering the growing process of the cannabis plant itself. By providing plants with an optimal growing environment, cultivators can harvest higher quality buds and collect larger yields. Additionally, cultivators have discovered a new growing method: genetic modifications. Engineering-based companies have been rapidly emerging throughout the North American region. Specifically, these companies test the molecules of the cannabis plant in efforts to create new products for both the recreational and medical markets. Some scientists speculate the genetically modifying cannabis plants, cultivators can make them resistant to mold or pesticides. Also, cultivators can also make a strain more potent in either CBD or THC genetically instead of through a breeding process. "The cannabis industry should be aware that sooner rather than later, there will be Big Ag [Big Agriculture] at play in this industry," Dr. Reggie Gaudino of the Berkeley-based Steep Hills cannabis laboratory says, according to The Cannifornian. "And Big Ag uses exactly these techniques [genetic modification]. We're working to help the current population of farmers and breeders retain relevance when Big Ag comes knocking on the door."
Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV) is also listed on the TSX Venture Exchange under the ticker (TSX-V: RIV). Earlier this week, the Company announced, "an investment and strategic collaboration between Canopy Rivers and ZeaKal, a California-based plant science innovator with proprietary technologies that sustainably increase photosynthesis, improve plant yield and enhance nutritional profiles for a variety of agricultural crops. The investment from Canopy Rivers marks another significant corporate milestone this calendar year for ZeaKal, following the February announcement of its R&D collaboration with Corteva Agriscience (NYSE: CTVA), the recently spun-out and NYSE-listed agricultural science division of DowDuPont.
ZeaKal's proprietary technology, PhotoSeed™, increases a plant's intrinsic photosynthetic capacity, meaning that PhotoSeed™ plants can convert more sunlight and carbon dioxide into energy for growth. This results in substantial improvement in seed and grain yield, as well as improved macronutrient profiles that drive an increase in both oil and protein content. For farmers, this means better productivity and profit margins; for consumers, this means higher nutritional profiles and an environmentally friendly way to meet growing global demand. With multi-year field trials across diverse plant species in the United States, Canada and New Zealand, the initial commercial focus has been on major row crops. Following Canopy Rivers' investment, ZeaKal intends to expand its program to include cannabis and hemp.
'Our investment in ZeaKal, the fifth consecutive international transaction for Canopy Rivers, builds on our thesis of selecting globally scalable and innovative processes, products, and technologies from complementary industries, and applying them to the cannabis and hemp economy,' said Mary Dimou, Director of Business Development at Canopy Rivers. 'Plant sciences is a mostly overlooked but absolutely critical segment of the cannabis and hemp value chain, and we are seeking to address this gap with this investment. ZeaKal's technology has already realized success across a number of crops during field trials, and these are crops that have been commercialized for decades. The application of this innovative technology throughout the Canopy Rivers portfolio and the cannabis and hemp industry at large could be a game changer.'
Canopy Rivers believes that ZeaKal's PhotoSeed™ technology has the potential to translate into significant benefits for the cannabis and hemp industry. Due to prohibition, the cultivation of cannabis and hemp has lacked the agricultural research and advancements that have significantly improved the cultivation of other crops. Canopy Rivers believes that applying ZeaKal's PhotoSeed™ technology to cannabis and hemp represents a significant step forward - with increased crop yield, higher oil production, additional grow cycles, and enriched cannabinoid output numbering among the potential benefits of the technology. While trials on cannabis and hemp have yet to begin, the positive results already achieved give Canopy Rivers confidence in ZeaKal's experienced team and its ability to successfully optimize and adapt its technology for expansion into this industry.
'We are elated that Canopy Rivers, a cannabis and hemp industry authority, has selected ZeaKal as an agriculture partner,' said Han Chen, Chief Executive Officer of ZeaKal. 'Beyond the capital, it is further validation that PhotoSeed™ is a next-generation blockbuster trait that can be utilized across diverse industries. With its rich domain and technical expertise, Canopy Rivers is supporting our entry into the cannabis and hemp markets with a technology we expect to be transformative for the sector.'
As a result of its US$10,000,000 investment, Canopy Rivers owns approximately 8.7% of ZeaKal on a fully diluted basis and holds an observer seat on ZeaKal's board of directors.
About Canopy Rivers: Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers works collaboratively with Canopy Growth Corporation (TSX: WEED,NYSE: CGC) to identify strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.
About ZeaKal: ZeaKal is a plant science company developed from the incubation pipeline of Kapyon Ventures in partnership with AgResearch Ltd. The company is focused on developing, PhotoSeed™, a next-generation trait technology that has been proven to increase the photosynthetic capacity and yield of several major crops."
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Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms, as well as medical devices through the Company's subsidiary, Storz & Bickel GMbH & Co. KG. Canopy Growth Corporation recently introduced Spectrum Therapeutics, a new global brand that will encompass all of the Company's ongoing commercial medical and clinical research operations including Spectrum Cannabis, Canopy Health Innovations (CHI), and the most recent addition to Canopy Growth's medical portfolio, Bionorica SE-founded C3 Cannabinoid Compound Company ("C3"), a European leader in cannabinoid-based medical therapies. Incorporating these entities into one unified ecosystem will integrate the Company's medical efforts as one global healthcare enterprise. Spectrum Therapeutics now encompasses the production and distribution of full-spectrum and single cannabinoid medical cannabis products; industry-leading education, resources and support for patients and healthcare practitioners; as well as pre-clinical and clinical research and the development of cannabinoid-based medicines. "We've always been a company that provides more than medical cannabis to our patients," commented Dr. Mark Ware, Chief Medical Officer, Canopy Growth. "We also offer education for patients and healthcare professionals and are engaged in research to define the safety and efficacy of cannabinoid medicines and the development of new cannabinoid-based treatments. Integrating our commercial medical businesses and clinical research arm under a single entity better reflects our position as a healthcare company that's driving further acceptance of cannabinoids as mainstream medicine and addressing the medical and wellness needs of our patients worldwide."
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) is a globally diversified and vertically integrated cannabis company with a presence across five continents. Cronos Group Inc. recently announced that it had entered into a sponsored research agreement with the Technion Research and Development Foundation of the Technion - Israel Institute of Technology to explore the use of cannabinoids and their role in regulating skin health and skin disorders. The preclinical studies will be conducted by Technion over a three-year period and will focus on three skin conditions: acne, psoriasis and skin repair. The endocannabinoid system and the cannabinoids that modulate its activity are believed to have an important role in regulating skin health and skin disorders. The research will utilize Dr. Meiri's cannabis strain database of over 80 cultivars and Cronos Group's strain specific cannabis oils to isolate and investigate the effects of individual and combinations of cannabinoids, potentially including rare cannabinoids, for treating acne, psoriasis and wounds using stem cell-derived organoid cultures developed by Dr. Fuchs' laboratory and mouse models. Cronos Group expects to be able to adapt the individual and combinations of cannabinoids to develop products for each of these three applications and expects to receive an exclusive, worldwide license to market and manufacture such products. "We are thrilled to begin this joint research with Dr. Meiri and Dr. Fuchs, who are among the most respected researchers in their fields," said David Hsu, Chief Operating Officer of Cronos Group. "Dr. Meiri's extensive cannabis strain database and capabilities in analytical testing provide a strong foundation for researching Dr. Fuch's world renowned stem cell organoids. Dr. Meiri and Dr. Fuchs' expertise coupled with Cronos Group's competencies in the cannabis industry make us optimistic about the future opportunities from this collaboration."
Aphria Inc. (NYSE: APHA) (TSX: APHA) is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Aphria Inc. recently entered into an exclusive agreement with Toronto-based UNOapp Inc. to collaborate on the development of technology and analytics solutions for Canada's adult-use cannabis industry. Founded in 2010, UNOapp has developed proven technology, marketing and analytical solutions that has enabled more than 4,500 customers across the globe to engage with their customers and drive revenue. As part of the Agreement, UNOapp has granted Aphria a first option to commercialize any platform or solution developed from this collaboration in any international market outside Canada. "With our innovation-focused approach, Aphria is setting the pace for the evolution of the adult-use cannabis industry in Canada," said Jakob Ripshtein, President of Aphria. "Our industry's long-term future will be driven by consumer-centric, innovation-led product, brand and technology solutions. We are excited for this collaboration with a fantastic technology partner in UNOapp and look forward to developing industry-leading solutions that shape the adult-use cannabis market for years to come."
KushCo Holdings, Inc. (OTCQB: KSHB) is the premier producer of ancillary products and services to the cannabis and hemp industries. KushCo Holdings, Inc., in line with its previously announced sustainability initiatives, recently announced it has entered a manufacturing and distribution agreement with SunGrown Packaging, LLC, a California-based provider of sustainable, customized packaging solutions to the cannabis industry. KushCo will immediately begin offering SunGrown's current biodegradable and child-resistant packaging options to its vast customer network of over 6000 businesses. In addition, the companies will work together to launch a new line of compostable and biodegradable packaging products for use in the cannabis, hemp and CBD industries. Pursuant to the agreement, SunGrown will partner with KushCo to develop products designed for the unique demands of the cannabis, hemp and CBD industries, while ensuring that all new products are environmentally friendly by featuring proprietary, biodegradable materials from renewable resources. This will have an immediate impact to KushCo's top and bottom line as KushCo expects to recognize up to USD 12 Million in revenue in the first two years of this partnership. Packaging solutions produced under the agreement have been published under protocols established by ASTM International (formerly known as American Society for Testing and Materials) and Biodegradable Products Institute to guarantee proper certification. "It is no secret that we have been working hard to transform our product portfolio to include numerous eco-friendly packaging solutions. We are thrilled to now be offering the first of those solutions in partnership with an industry leader - SunGrown Packaging," said KushCo Holdings' Chief Executive Officer, Nick Kovacevich. "Since 2010 we have been a leader in the legal cannabis industry, offering child-resistant packaging solutions to thousands of cannabis and CBD businesses. And today, on Earth Day, I am pleased to announce that our company is now a leader in offering biodegradable, compostable, and sustainable options for our customers - a huge step forward for our industry."
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