The CannabisNewsAudio Podcast: Recent Episodes
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CannabisNewsAudio's latest podcast features Luis Merchan, President and CEO of Flora Growth Corp. (NASDAQ: FLGC), an internationally focused cannabis brand builder that leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its diverse business divisions.
Throughout the interview, Merchan discussed Flora Growth’s business model.
“Flora Growth was founded three years ago under the idea of learning from early adopters in the cannabis industry. We wanted to grow cannabis in an outdoor way at the lowest production cost in the world,” Merchan said. “To do so, we selected Colombia, one of the most beautiful geographies located alongside the equator in the world. Of course, we built a world-class team of agronomists who are helping us grow cannabis in an organic way at a cost that cannot be competed with anywhere, worldwide.”
CannabisNewsAudio's latest podcast features Luis Merchan, President and CEO of Flora Growth Corp. (NASDAQ: FLGC), an internationally focused cannabis brand builder that leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its diverse business divisions.
Throughout the interview, Merchan discussed Flora Growth’s business model.
“Flora Growth was founded three years ago under the idea of learning from early adopters in the cannabis industry. We wanted to grow cannabis in an outdoor way at the lowest production cost in the world,” Merchan said. “To do so, we selected Colombia, one of the most beautiful geographies located alongside the equator in the world. Of course, we built a world-class team of agronomists who are helping us grow cannabis in an organic way at a cost that cannot be competed with anywhere, worldwide.”
Even as the cannabis market continues expanding, pricing for wholesale cannabis has been under protracted pressure from oversupply and price cuts. Make no mistake — the cannabis market is still robust with large upside, and survivors of this supply side shake-out should secure ever-greater market share. The pressures may be most prevalent in California, the world’s biggest cannabis market, as light-deprivation crops reach market in 2021 and the potential for Type 5 cultivation licenses allowing for massive outdoor-growing facilities could be issued in California by 2023. To survive and thrive, companies will need to be nimble, diversify assets across the value chain and generate revenues from multiple venues. That’s preaching to the choir for Los-Angeles-based Cannabis Strategic Ventures Inc. (OTC: NUGS) (Profile). One of California’s publicly traded cannabis cultivators, NUGS has been actively diversifying into integrated operations complete with high-profile retail locations and new indoor grow facilities. NUGS views the shake-out as opportunity and fully expects to capture increased market share as the company continues to diversify. Throughout the last decade, as the “green rush” has swept across the globe, the wheat has been separated from the chaff, leaving strong companies — such as Canopy Growth (NASDAQ: CGC), Curaleaf Holdings (OTCQX: CURLF), Green Thumb Industries (OTCQX: GTBIF) and Trulieve Cannabis (OTCQX: TCNNF) — still standing as they take necessary steps to secure market share going forward.
Even as the cannabis market continues expanding, pricing for wholesale cannabis has been under protracted pressure from oversupply and price cuts. Make no mistake — the cannabis market is still robust with large upside, and survivors of this supply side shake-out should secure ever-greater market share. The pressures may be most prevalent in California, the world’s biggest cannabis market, as light-deprivation crops reach market in 2021 and the potential for Type 5 cultivation licenses allowing for massive outdoor-growing facilities could be issued in California by 2023. To survive and thrive, companies will need to be nimble, diversify assets across the value chain and generate revenues from multiple venues. That’s preaching to the choir for Los-Angeles-based Cannabis Strategic Ventures Inc. (OTC: NUGS) (Profile). One of California’s publicly traded cannabis cultivators, NUGS has been actively diversifying into integrated operations complete with high-profile retail locations and new indoor grow facilities. NUGS views the shake-out as opportunity and fully expects to capture increased market share as the company continues to diversify. Throughout the last decade, as the “green rush” has swept across the globe, the wheat has been separated from the chaff, leaving strong companies — such as Canopy Growth (NASDAQ: CGC), Curaleaf Holdings (OTCQX: CURLF), Green Thumb Industries (OTCQX: GTBIF) and Trulieve Cannabis (OTCQX: TCNNF) — still standing as they take necessary steps to secure market share going forward.
As recently as 2015, the retail sales for alkaline waters, those with a pH between 7.0 and 10.0, were less than $95 million. With consumers taking a more proactive approach towards health, alkaline sales are booming. Industry authority Beverage Marketing Corp. forecasts retail sales in the category to balloon to $1.3 billion by 2023, representing 20% of the entire value-added water category. Drivers abound to support the 42.6% compound annual growth rate for the forecast period, which are undergirding exponential growth for The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) (Profile), the largest independent alkaline water company in the United States. Major grocers, including Walmart Inc. (NYSE: WMT), BJ’s Wholesale Club Holdings Inc. (NYSE: BJ), Costco Wholesale Corporation (NASDAQ: COST) and the Kroger Company (NYSE: KR), have benefited from and are following the category trend, many bottling their own alkaline brands while stocking their shelves and distribution centers to increase options and meet consumer demand.
As recently as 2015, the retail sales for alkaline waters, those with a pH between 7.0 and 10.0, were less than $95 million. With consumers taking a more proactive approach towards health, alkaline sales are booming. Industry authority Beverage Marketing Corp. forecasts retail sales in the category to balloon to $1.3 billion by 2023, representing 20% of the entire value-added water category. Drivers abound to support the 42.6% compound annual growth rate for the forecast period, which are undergirding exponential growth for The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) (Profile), the largest independent alkaline water company in the United States. Major grocers, including Walmart Inc. (NYSE: WMT), BJ’s Wholesale Club Holdings Inc. (NYSE: BJ), Costco Wholesale Corporation (NASDAQ: COST) and the Kroger Company (NYSE: KR), have benefited from and are following the category trend, many bottling their own alkaline brands while stocking their shelves and distribution centers to increase options and meet consumer demand.
As consumers continue to insist on more healthy options in choices in their lives, the global health drinks market is projected to see consistent, continued growth, with a CAGR of 7.88% during the next five years. That growth will come from all sectors, including convenience store sales, e-commerce orders and the hospitality sector, which is recovering from COVID-19 slowdowns. Bottled water continues to be America’s favorite drink, outselling soda for the first time in 2016 and continuing that feat every year since. Leading the healthy beverage charge are companies, such as The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) (Profile), that are eager to innovate as they meet consumers calls for both taste and quality. In the most recent of a string of innovations that have earned WTER the title of largest independent alkaline company in the country, The Alkaline Water Company launched a brand new line of six natural functional waters. Earlier this year, Shaquille O’Neal, NBA Hall of Famer and Papa John’s International (NASDAQ: PZZA) board member, endorsed the company and was named an advisory board member. Other companies looking to innovate and grow in the space include Celsius Holdings Inc. (NASDAQ: CELH), Nestle SA ADR (OTC: NSRGY) and Keurig Dr Pepper Inc. (NASDAQ: KDP).
As consumers continue to insist on more healthy options in choices in their lives, the global health drinks market is projected to see consistent, continued growth, with a CAGR of 7.88% during the next five years. That growth will come from all sectors, including convenience store sales, e-commerce orders and the hospitality sector, which is recovering from COVID-19 slowdowns. Bottled water continues to be America’s favorite drink, outselling soda for the first time in 2016 and continuing that feat every year since. Leading the healthy beverage charge are companies, such as The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) (Profile), that are eager to innovate as they meet consumers calls for both taste and quality. In the most recent of a string of innovations that have earned WTER the title of largest independent alkaline company in the country, The Alkaline Water Company launched a brand new line of six natural functional waters. Earlier this year, Shaquille O’Neal, NBA Hall of Famer and Papa John’s International (NASDAQ: PZZA) board member, endorsed the company and was named an advisory board member. Other companies looking to innovate and grow in the space include Celsius Holdings Inc. (NASDAQ: CELH), Nestle SA ADR (OTC: NSRGY) and Keurig Dr Pepper Inc. (NASDAQ: KDP).
As part of the reopening economy, investors should be monitoring several trends in the healthcare space, including several that fall in the “natural wellness” or “natural alternatives” categories. The COVID-19 pandemic shone a bright light on lifestyle and self-care as people were encouraged, and often mandated, to stay at home. The trend further points to the next phase of cannabis market maturation, dubbed cannabis 3.0, against the backdrop of legislators discussing the Cannabis Administration and Opportunity Act that would create a national market for marijuana. Looking to address this opportunity, BevCanna Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) (FSE: 7BC) (Profile) has been expanding and diversifying its business in 2021 from its core business as a high-capacity cannabis beverage company into a diversified health and wellness company through a number of accretive acquisitions. BevCanna is emerging as a leader among a group of companies, including the Valens Company (TSX: VLNS) (OTCQX: VLNCF), Neptune Wellness Solutions Inc. (NASDAQ: NEPT), NewAge Inc. (NASDAQ: NBEV) and AYR Wellness Inc. (CSE: AYR.A) (OTCQX: AYRWF), that are innovating and taking aggressive approaches to capitalize on the growing cannabis consumer trend moving toward a more wholistic wellness lifestyle business.
As part of the reopening economy, investors should be monitoring several trends in the healthcare space, including several that fall in the “natural wellness” or “natural alternatives” categories. The COVID-19 pandemic shone a bright light on lifestyle and self-care as people were encouraged, and often mandated, to stay at home. The trend further points to the next phase of cannabis market maturation, dubbed cannabis 3.0, against the backdrop of legislators discussing the Cannabis Administration and Opportunity Act that would create a national market for marijuana. Looking to address this opportunity, BevCanna Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) (FSE: 7BC) (Profile) has been expanding and diversifying its business in 2021 from its core business as a high-capacity cannabis beverage company into a diversified health and wellness company through a number of accretive acquisitions. BevCanna is emerging as a leader among a group of companies, including the Valens Company (TSX: VLNS) (OTCQX: VLNCF), Neptune Wellness Solutions Inc. (NASDAQ: NEPT), NewAge Inc. (NASDAQ: NBEV) and AYR Wellness Inc. (CSE: AYR.A) (OTCQX: AYRWF), that are innovating and taking aggressive approaches to capitalize on the growing cannabis consumer trend moving toward a more wholistic wellness lifestyle business.
When Democrats took control of Capitol Hill during the elections in November 2020, there was growing optimism that federal legalization of cannabis was in the cards for Americans. Nine months into the new administration, progress has been slow in the United States. Latin American (“LATAM”) countries, on the other hand, have moved forward with new laws ending cannabis prohibition and supporting the industry, moves to generate government revenue, cut into illicit sales and bring novel therapeutic options to people in need. Colombia, Mexico and Panama are emerging as global pioneers promoting responsible cannabis commerce, which bodes well for Flora Growth Corp. (NASDAQ: FLGC) (Profile), a company with robust operations in Colombia. These countries are following the example set forth by Canada, which has given rise to some of the legal cannabis’ juggernauts, such as Canopy Growth Corporation (NASDAQ: CGC), Tilray Inc. (NASDAQ: TLRY) and Sundial Growers Inc. (NASDAQ: SNDL), as other companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) lend additional support to the growing market.
When Democrats took control of Capitol Hill during the elections in November 2020, there was growing optimism that federal legalization of cannabis was in the cards for Americans. Nine months into the new administration, progress has been slow in the United States. Latin American (“LATAM”) countries, on the other hand, have moved forward with new laws ending cannabis prohibition and supporting the industry, moves to generate government revenue, cut into illicit sales and bring novel therapeutic options to people in need. Colombia, Mexico and Panama are emerging as global pioneers promoting responsible cannabis commerce, which bodes well for Flora Growth Corp. (NASDAQ: FLGC) (Profile), a company with robust operations in Colombia. These countries are following the example set forth by Canada, which has given rise to some of the legal cannabis’ juggernauts, such as Canopy Growth Corporation (NASDAQ: CGC), Tilray Inc. (NASDAQ: TLRY) and Sundial Growers Inc. (NASDAQ: SNDL), as other companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) lend additional support to the growing market.
Hypertension, or high blood pressure, is rampant in America. An estimated 45% of adults in the United States, or 108 million people, have hypertension, yet only about one out of every four have their condition under control. That’s a big problem considering hypertension increases risks for heart disease and stroke, which are, respectively, the no. 1 and no. 5 leading causes of death in the nation each year. To that point, the CDC names hypertension as a primary or contributing cause in nearly half a million deaths annually in the U.S. Hypertension treatment options vary tremendously from meditation to conventional drugs, with what looks to be a promising new innovation on the horizon from Lexaria Bioscience Corp. (NASDAQ: LEXX) (Profile). Lexaria is proving that its proprietary DehydraTECH(TM) technology repeatedly delivers strong therapeutic responses, without the side effects of today’s drugs. Lexaria is looking to throw its hat into the ring with majors in the market today that are making billions of dollars by treating high blood pressure and other leading causes of death, including Pfizer Inc. (NYSE: PFE), Merck & Company Inc. (NYSE: MRK), AstraZeneca PLC (NASDAQ: AZN) and Moderna Inc. (NASDAQ: MRNA).
Hypertension, or high blood pressure, is rampant in America. An estimated 45% of adults in the United States, or 108 million people, have hypertension, yet only about one out of every four have their condition under control. That’s a big problem considering hypertension increases risks for heart disease and stroke, which are, respectively, the no. 1 and no. 5 leading causes of death in the nation each year. To that point, the CDC names hypertension as a primary or contributing cause in nearly half a million deaths annually in the U.S. Hypertension treatment options vary tremendously from meditation to conventional drugs, with what looks to be a promising new innovation on the horizon from Lexaria Bioscience Corp. (NASDAQ: LEXX) (Profile). Lexaria is proving that its proprietary DehydraTECH(TM) technology repeatedly delivers strong therapeutic responses, without the side effects of today’s drugs. Lexaria is looking to throw its hat into the ring with majors in the market today that are making billions of dollars by treating high blood pressure and other leading causes of death, including Pfizer Inc. (NYSE: PFE), Merck & Company Inc. (NYSE: MRK), AstraZeneca PLC (NASDAQ: AZN) and Moderna Inc. (NASDAQ: MRNA).
As the cannabis industry matures and is again heating up — a recent eye-popping report by Data Bridge Market Research projects that the global legal marijuana market will explode to more than $90 billion by 2027. Companies operating in the sector are looking to capitalize on opportunities the multibillion-dollar space offers. Recognizing the often submarginal quality of available product as well as high cost of development and land acquisition, Pac Roots Cannabis Corp. (CSE: PACR) utilizes state-of-the-art genetics to ensure premium-quality products. Using science and key strategic partnerships, Pac Roots intends to eliminate the quality and cost barriers to success and carve what could be profitable niche in a booming market. Canopy Growth Corporation (NYSE: CGC) continues expansion of its Canadian operations while Cronos Group Inc. (NASDAQ: CRON) has officially entered the Israeli medical cannabis market with the sale of its dried flower products. Aphria Inc. (NASDAQ: APHA) has also entered the Israeli market with its recently announced supply agreement with Canndoc, and Organigram Holdings Inc. (NASDAQ: OGI) has launched Trailblazer Snax, the largest cannabis-infused chocolate bar in Canada.
As the cannabis industry matures and is again heating up — a recent eye-popping report by Data Bridge Market Research projects that the global legal marijuana market will explode to more than $90 billion by 2027. Companies operating in the sector are looking to capitalize on opportunities the multibillion-dollar space offers. Recognizing the often submarginal quality of available product as well as high cost of development and land acquisition, Pac Roots Cannabis Corp. (CSE: PACR) utilizes state-of-the-art genetics to ensure premium-quality products. Using science and key strategic partnerships, Pac Roots intends to eliminate the quality and cost barriers to success and carve what could be profitable niche in a booming market. Canopy Growth Corporation (NYSE: CGC) continues expansion of its Canadian operations while Cronos Group Inc. (NASDAQ: CRON) has officially entered the Israeli medical cannabis market with the sale of its dried flower products. Aphria Inc. (NASDAQ: APHA) has also entered the Israeli market with its recently announced supply agreement with Canndoc, and Organigram Holdings Inc. (NASDAQ: OGI) has launched Trailblazer Snax, the largest cannabis-infused chocolate bar in Canada.
COVID-19 has devastated most businesses but created a surge in cannabis sales—a trend that’s likely to continue.
Strange bedfellows, COVID-19 and cannabis. As the pandemic wreaked havoc on the U.S. and global economies, cannabis sales rocketed higher across multiple markets in North America. California cannabis sales soared nearly 160% compared to the same day in March 2019, while sales in Washington rocketed 100% and Colorado saw a 46% increase on the same day. This surge doesn’t appear to be a flash in the pan either. An emerging leader in the U.S. cannabis marketplace, Cannabis Strategic Ventures (OTCQB: NUGS) (NUGS Profile), is now on pace for over $2.7 million in quarterly sales and approximately $11 million in annualized sales, based on its strong performance in April and May. Simultaneously, the company increased its harvest size by as much as 2.5x and is now selling product at an 11% premium to industry standard. Like any industry, the real winners in the cannabis markets are tied to sales and earnings growth. Canopy Growth Corporation (NYSE: CGC) has continued to release new products for a variety of markets while attracting significant investment from the beverage sector. Cronos Group Inc. (NASDAQ: CRON) has continued to work on expanding its international reach. With a similar focus on growth, Aurora Cannabis Inc. (NYSE: ACB) has acquired another company to expand its reach from Canada into markets in the United States. Organigram Holdings Inc. (NASDAQ: OGI), whose business was initially disrupted by COVID-19, has begun a phased return to work and almost immediately announced the release of new products, making the most of continuing consumer demand.
COVID-19 has devastated most businesses but created a surge in cannabis sales—a trend that’s likely to continue.
Strange bedfellows, COVID-19 and cannabis. As the pandemic wreaked havoc on the U.S. and global economies, cannabis sales rocketed higher across multiple markets in North America. California cannabis sales soared nearly 160% compared to the same day in March 2019, while sales in Washington rocketed 100% and Colorado saw a 46% increase on the same day. This surge doesn’t appear to be a flash in the pan either. An emerging leader in the U.S. cannabis marketplace, Cannabis Strategic Ventures (OTCQB: NUGS) (NUGS Profile), is now on pace for over $2.7 million in quarterly sales and approximately $11 million in annualized sales, based on its strong performance in April and May. Simultaneously, the company increased its harvest size by as much as 2.5x and is now selling product at an 11% premium to industry standard. Like any industry, the real winners in the cannabis markets are tied to sales and earnings growth. Canopy Growth Corporation (NYSE: CGC) has continued to release new products for a variety of markets while attracting significant investment from the beverage sector. Cronos Group Inc. (NASDAQ: CRON) has continued to work on expanding its international reach. With a similar focus on growth, Aurora Cannabis Inc. (NYSE: ACB) has acquired another company to expand its reach from Canada into markets in the United States. Organigram Holdings Inc. (NASDAQ: OGI), whose business was initially disrupted by COVID-19, has begun a phased return to work and almost immediately announced the release of new products, making the most of continuing consumer demand.
Cannabis Strategic Ventures (OTCQB: NUGS) is among the growing number of California cannabis companies boasting multiple cultivation, manufacturing and distribution licenses. Its wholly owned and operated flagship farm, NUGS FARM, recently completed its first harvest. Like Cannabis Strategic Ventures, Acreage Holdings Inc. (OTCQX: ACRGF) is invested up and down the supply chain, with new brands targeting markets in California and elsewhere. Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) recently announced expansion in Pennsylvania, catering to the state’s 180,000 registered cannabis users. Halo Labs Inc. (OTCQX: AGEEF) provides vital support services to the California market, using cutting-edge technology to extract active ingredients from cannabis. Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) has financed a fresh wave of expansion through a sale-and-leaseback agreement on its existing cultivation properties.
A desire to move away from smoking may be fueling growth in the edible cannabis products.
Sproutly Canada Inc. (CSE: SPR) (OTCQB: SRUTF) (FSE: 38G) is developing new technology to manufacture cannabis edibles and to accurately measure their active ingredients. Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) (LXRP Profile) has created a bold new technology to make cannabis’ active ingredients more palatable and absorbable. BevCanna Enterprises Inc. (CSE: BEV) (OTC: BVNNF) is producing white-label products, giving other brands access to the market. HEXO Corp. (TSX: HEXO) (NYSE: HEXO) is meeting its regulatory needs by acquiring other licensed cannabis producers and processors. Valens GroWorks Corp. (TSX.V: VGW) (OTCQX: VGWCF) has created a large and growing extraction and testing facility.
Hemp may be taking the first steps to overtake tobacco as a leading industry in Kentucky.
Sugarmade Inc. (OTCQB: SGMD) is among the companies moving into Kentucky, with a million-dollar investment in hemp growth. Hemp’s national prominence is growing through deals such as Aurora Cannabis Inc.’s (TSX: ACB) (NYSE: ACB) collaboration with United Fighting Championship (UFC). Research work by Tilray Inc. (NASDAQ: TLRY) may involve using hemp to treat a growing range of physical and mental ailments. Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) is serving states without a strong, homegrown hemp industry, such as Florida. In addition, companies across the cannabis sector, such as Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON), are diversifying their product ranges as more hemp crops come online.
With a powerhouse economy worth more than $3 trillion, California’s economy ranks as the fifth largest in the world. Current legislation is expected to pave the way for the state’s hemp market to explode.
With a series of smart acquisitions and brand expansions, Sugarmade Inc. (OTCQB: SGMD) appears to be a strong pick-and-shovel presence as California looks at passing hemp-friendly legislation. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) just announced a new hemp-based acquisition, while Greenlane Holdings Inc. (NASDAQ: GNLN) and The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF) (TGOD Profile) have both inked deals that strengthen their presence in the hemp industry as well. KushCo Holdings Inc. (OTCQX: KSHB), another industry supplier, just created a new sales division aimed at mass distribution, industry education and compliance, and building CBD-brand distribution networks.
While the huge increase in U.S. consumer demand from hemp extracts and hemp product is largely credited as the reason for the boom in the number of hemp acres under cultivation, there is a significant additional part of the hemp-growth story to tell.
With a pending acquisition in the cultivation supply market, Sugarmade Inc. (OTCQB: SGMD) appears to be well poised to become a strong pick-and-shovel provider to the hemp industry. Even the large cultivators and suppliers are now getting in the hemp market. One of the first companies of the larger players to make the move into hemp cultivation was Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), which just a few days ago announced that it would invest $300 million to enter the hemp market. Not to be outdone in the hemp gold rush, Greenlane Holdings Inc. (NASDAQ: GNLN), which began trading on the NASDAQ, and The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF) (TGOD Profile) have both entered the fray. KushCo Holdings Inc. (OTCQX: KSHB), another industry supplier, is also seeming to benefit for the strong growth in the hemp marketplace.
The surging hemp industry means exciting benefits for Kentucky. Hemp is big business in Kentucky. Among the companies working in the state is Sugarmade Inc. (OTCQB: SGMD), a supplier of hydroponic equipment that is now moving into hemp through an investment in Hempistry. In New York, a leading politician has been in contact with Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) to ensure the survival of a hemp project threatened by executive upheaval. Tilray Inc. (NASDAQ: TLRY) is looking even further than North America for growth. Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) is focusing on innovation in the sector. New Age Beverages Corporation (NASDAQ: NBEV) has been expanding its distribution and marketing power to reach into an ever-growing hemp market.
In between growers and sellers lie several potential places for companies with expertise to firmly establish themselves in the burgeoning cannabis space.
Savvy companies such as Youngevity International Inc. (NASDAQ: YGYI) recognize the potential payoff of being involved in the back end of the cannabis industry. The company’s wholly owned subsidiary Khrysos Industries Inc. just signed a five-year contract to purchase hemp plant biomass for extraction, end-to-end processing and production of hemp-derived products. Indiva Limited (TSX.V: NDVA) (OTCQX: NDVAF) has successfully received an amended license from Health Canada for three additional grow rooms and three additional processing rooms. Neptune Wellness Solutions Inc. (TSX: NEPT) (NASDAQ: NEPT) recently announced that its wholly owned subsidiary received a notification letter from Health Canada indicating that all requested license amendments have been approved. Other cannabis companies are making strategic moves in the industry as well. CannaRoyalty Corporation (CSE: OH) (OTCQX: ORHOF) has obtained final approval to move forward with its plan of arrangement with Cresco Labs, which will result in the largest-ever public company acquisition in the U.S. cannabis sector. And KushCo Holdings Inc. (OTCQX: KSHB) has partnered with C.A. Fortune, a leading full-service national consumer products sales and marketing agency, with the intent to grant viable CBD companies access to large-scale, conventional retail channels.
Mainstream retailers across the United States are embracing the growing popularity of the nonpsychoactive cannabinoid, cannabidiol (CBD), making room for CBD products on their prominent shelves.
With the rise of these cannabis beauty products, major stores from luxury retailers Barney’s and Neiman Marcus down to Walgreens, Rite Aid and now Kroger are stocking products from a range of CBD SKU producers, including Green Growth Brands (CSE: GGB) (OTCQB: GGBXF), Charlotte’s Web Holdings (TSX: CWEB) (OTCQX: CWBHF), CannTrust Holdings Inc. (TSX: TRST) (NYSE: CTST), Organigram Holdings Inc. (TSX.V: OGI) (NASDAQ: OGI) (OGI Profile) and HEXO Corp. (TSX: HEXO) (NYSE American: HEXO).
As hemp production increases, Californian legislators have extended the duration of thousands of cannabis cultivation licenses to support the state’s thriving industry.
Sugarmade Inc. (OTCQB: SGMD) is supporting many of these companies that have cultivation licenses by providing cultivation and extraction equipment. Canopy Growth Corporation (TSX: WEED) (NYSE: CGC), one of the biggest companies in the sector, is increasing its growing capacity while helping educate about medicines. Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) is leaning into new technology, with new facilities for R&D and processing. The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF) (TGODF Profile) has tapped into the demand for organic produce and is now expanding into global CBD market. GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF) is developing powerful new medicines, in which hemp could help tackle previously uncurable illnesses.
With demand outstripping supply, successful cannabis companies are following smart core strategies and reporting strong revenues.
Golden Developing Solutions Inc. (OTC: DVLP) has used a mix of acquisitions, diverse brands and products, and increased production footprint to meet customer demand and report significant revenue increases, including its strongest second-quarter numbers ever. Industry giant Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) has followed a similar path, though some change may follow the recent departure of its co-CEO. Tilray Inc. (NASDAQ: TLRY) has invested heavily in increasing production while reaching into new markets such as the United Kingdom. Medmen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) and Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) have both shown the potential for growing multistate businesses in the United States, despite the challenges created by federal legislation.
Rising hemp production is putting pressure on processing.
Sugarmade Inc. (OTCQB: SGMD), a provider of cultivation equipment, is adding processors to its catalog of products, focusing on next-generation machinery. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) will be among the companies with a rising demand for processing, as it increases both its cultivation capacity and its product lines. Demand is rising in part thanks to CBD’s public profile, with deals such as the partnership between Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) and UFC shining a spotlight on the plant and its potential. New uses for CBD are also increasing demand for the plant, with R&D led by companies such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) and Aphria (NYSE: APHA) (TSX: APHA).
The cannabis sector continues its steady shift toward big business, big money and a focus on the value add of immaterial assets.
TransCanna Holdings Inc. (CSE: TCAN) (FRA: TH8) has made several key acquisitions, creating a large operation with various licenses and recognized brands. HEXO Corp. (TSX: HEXO) (NYSE American: HEXO) has taken a similar path with the acquisition of Newstrike. Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) is building a positive public profile through releasing educational tools. Aphria Inc. (TSX: APHA) (NYSE: APHA) has expanded the hunt for cultivation licenses to Germany. Meanwhile, companies such as Charlotte’s Web Holdings Inc. (TSX: CWEB) (OTCQX: CWBHF) keep releasing new products into the market.
Skepticism has been squashed and all apprehension eliminated. There’s no longer any question about either the viability or the profitability of the newly respected cannabis sector. Huge money has already been made in the nascent industry, and the only real question left is: where’s the next super nova?
Quarter-over-quarter sales growth is one of the indicators used to target explosive upside potential. Similar growth patterns were exhibited by many of the cannabis behemoths prior to parabolic price increases. In what may be an equally telling indicator, Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF) revenues have now increased 11 consecutive quarters, quarter on quarter, ever since the company started selling its hemp-based CBD products. Similar quarterly sales spikes and strategic acquisitions foreshadowed dramatic price increases in some of the largest names in the cannabis universe. Last October Medmen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) soared 60% in one week when the company announced a deal to buy PharmCann. Florida-based Trulieve Cannabis Corp. (OTC: TCNNF) (CSE: TRUL) went public last September through a reverse merger in Canada and soared 200% after a strong 2018 Q2. Already up big on Canadian exchanges, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) became the first pure-play marijuana stock to list on NASDAQ around $7 and just bounced off $23 a share. Last year, Tilray Inc. (NASDAQ: TLRY) became the first cannabis company to IPO on the NASDAQ at $17 per share and by September skyrocketed to $300. Despite price surges and fluctuations in the big cannabis names, there’s bound to be more money made in the sector; the run is far from over.
Experiments with next-generation delivery systems appear certain to lead to better cannabis-based products.
Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) has recently seen spectacular improvements in the effectiveness of cannabinoids thanks to its proprietary chemical delivery treatment. GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF), which has won widespread praise for its innovative medical work, has seen good trial results for a new treatment for seizures. Tilray Inc. (NASDAQ: TLRY) is supporting studies into the uses of cannabinoids to treat behavioral problems and HIV. MariMed Inc. (OTCQB: MRMD) has set up a subsidiary focused on CBD, currently the highest-profile cannabinoid product. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has established a new research lab to develop devices for CBD consumption.
Extraction technology plays a crucial part in the production of cannabidiol (CBD) from hemp.
Sugarmade Inc. (OTCQB: SGMD), a company already established in the hydroponic equipment business, is making plans to add extraction technology to its repertoire. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has been researching new medical applications for CBD and related chemicals — medicines for which extraction will be critical. KushCo Holdings Inc. (OTCQX: KSHB) has moved from providing support services to CBD-related companies to running its own store and has recently bolstered its leadership team for further growth. Harvest Health & Recreation Inc. (CSE: HARV) (OTCQX: HRVSF) has expanded swiftly over the past six years, growing from a single operation to a presence in five U.S. states. And in a boost to CBD’s public profile, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) has teamed up with UFC to research the application of CBD and related treatments for mixed martial artists.
As the hemp and CBD markets grow, a wide variety of CBD- and hemp-based products are becoming available, including products for pets.
Geyser Brands Inc. (TSX.V: GYSR) has recently announced an acquisition that provides the company with two brands of hemp and CBD products. Indiva Ltd. (TSX.V: NDVA) (OTCQX: NDVAF), which provides infused products for humans, is working on a new extraction facility to increase its production. Viridium Pacific Group (TSX.V: VIR) (OTCQB: VIRFF) is supporting the growth of the hemp and cannabis industries through investment, both in acquisitions and in partnership with smaller companies. Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF) (WLDFF Profile) has raised the public profile of CBD through celebrity associations and entry into prestige shops. Phivida Holdings Inc. (CSE: VIDA) (OTCQX: PHVAF) is producing CBD products for both humans and their furry companions.
Fueled by an explosion of CBD-infused edibles, billion-dollar projections for the CBD market may even be conservative.
This seems possible when one considers the truly innovative work being done in the sector by the likes of Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP), which has developed a patented delivery technology with disruptive potential, delivering 475% more CBD to the bloodstream after 15 minutes than conventional formulations. Other sector innovators are making a similar impact, including the likes of noted cannabinoid biopharma GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF) and that of researchers and product developers Tilray Inc. (NASDAQ: TLRY), MariMed Inc. (OTCQB: MRMD) and Aurora Cannabis Inc. (TSX: ACB) (NYSE: ACB).
Cannabis companies are using increasingly refined acquisition tactics to create vertical integration.
TransCanna Holdings Inc. (CSE: TCAN) (XETR: TH8) has developed a refined acquisition strategy, assessing more than one hundred targets before settling on a select few to acquire. Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF), one of America’s leading multistate cannabis companies, has recently announced its agreement to acquire CannaRoyalty Corp. (OTCQX: ORHOF), giving it control over a vast distribution platform. In Canada, HEXO Corp. (TSX: HEXO) (NYSE American: HEXO) has been given approval to acquire Newstrike, as the country’s vibrant industry consolidates following recent dramatic growth. For those without vertical integration, companies such as DionyMed Brands Inc. (CSE: DYME) (OTCQB: DYMEF) provide vital support services, including logistics and distribution.
Growing demand for CBD is increasing pressure on companies that provide key cultivation equipment and industry supplies.
As part of its commitment to build a large and well-supplied sales channel, hydroponic supplier Sugarmade Inc. (OTCQB: SGMD) is in the process of making acquisition of companies that supply the hemp industry. An increasing need for supplies is coming from companies such as Canopy Growth Corporation (TSX: WEED) (NYSE: CGC), a major cultivator and processor making moves on the CBD drinks and well-being markets. Cronos Group Inc. (TSX: CRON) (NASDAQ: CRON) has entered into a supply agreement with another provider to ensure the materials it needs for its products. Global efforts by companies such as New Age Beverages Corporation (NASDAQ: NBEV) and Aphria (TSX: APHA) (NYSE: APHA) may further strain U.S. supply chains, due to greater cultivation restrictions in other parts of the world.
Companies with a presence in the CBD market are seeing their profiles rise, thanks to growing media and celebrity attention.
Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF) is one of the companies benefiting most from this attention, with its products featured in Kim Kardashian’s baby shower and the new Saks CBD store. Tilray Inc. (NASDAQ: TLRY) has seen strong market coverage as its shares rose following action to tackle product shortages in Canada. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has fostered its public profile through efforts by the company’s media-savvy co-CEO. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) drew attention as its share value rose with a large external investment. Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) has been focusing on growing better CBD-producing plants, work that has drawn attention to its VP of cultivation.
- Kim Kardashian’s CBD-themed baby shower drew attention to the range of relaxing CBD products.
- Other high-profile appearances are boosting upper-end CBD brands.
- Broad media coverage is normalizing and drawing customers to the sector.
A boom in demand for cannabidiol (CBD) has created an alarming shortage, which savvy hemp companies are aggressively looking to solve.
Cultivation supplies company Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) has acquired several other suppliers, allowing it to benefit from economies of scale. Canadian cultivator Tilray Inc. (NASDAQ: TLRY) is investing heavily in new growing space. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has expanded from Canada into the United States and is collaborating with other companies to meet demand. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has received a substantial inflow of funds from a tobacco company and is investing some of it in R&D. Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) is focusing on growing high-quality hemp to supply a range of novel products.
Last year was a year of maturation for the cannabis market.
- California’s growing pains are a recipe for success for handful of savvy operators
- Brands, consistency and scalability likely deciding factors for many companies
- Projected global market size an open-and-shut case for scaling up NA sector
The market growth resulted from retailers in nine legal adult-use states being pushed beyond the sector’s historically core demographics, targeting fast-growing new segments such as women, with an emphasis on elements such as wellness and clearly labeled/low-dose alternatives. That trend was reinforced with CBD breaking out into the mainstream, as industrial hemp became legal throughout the United States, and cannabis companies looked for ways to stand out from the crowd. Some companies were more successful at this than others, with TransCanna Holdings Inc. (CSE: TCAN) (XETR: TH8) (TCAN Profile) making huge strides recently to expand the upper-end procurement part of the business, as well as flesh-out its footprint of branded offerings. Other moves have been made by comparable sector players such as Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), DionyMed Brands Inc. (OTCQB: DYMEF) (CSE: DYME), Cresco Labs Inc. (OTCQX: CRLBF) (CSE: CL) and CannaRoyalty Corp. (OTCQX: ORHOF) (CSE: OH), which are pursuing similarly comprehensive approaches to the sector that run the gamut from raw inputs to changing branding, marketing and distribution methods.
The growth of vaping has led to the emergence of a new sector.
- Vaping is tied to the tobacco and cannabis industries but has become popular as a healthier delivery system for both products.
- Investment and mergers are fueling the industry’s expansion.
- Working smarter in the competitive market may be savvy strategy.
Many companies are jockeying for position in this new space. Interestingly, some of the more successful companies may not necessarily be the big players but those that work smart with what they have. Among these smaller smart companies is VPR Brands LP (OTC: VPRB) (VPRB Profile), which has used innovative products and marketing tactics to expand its customer base. At the opposite end of the spectrum is Altria Group Inc. (NYSE: MO), a tobacco giant that has invested heavily in vaping. Greenlane Holdings Inc. (NASDAQ: GNLN) works on the distribution side and has impressive reach, supplying nearly 10,000 stores and two major online outlets. KushCo Holdings Inc. (OTCQB: KSHB) has moved successfully from packaging into cannabis. Thanks to cannabis-based medicines such as those created by GW Pharmaceuticals plc (NASDAQ: GWPH), vaping may even develop a place in medical care.
Projections for the cannabis markets are staggering, yet there’s evidence that the lofty estimates may be understated.
- Cannabis projections often fall far short of actual sales growth.
- Cannabis-infused beverages looks to be next area of explosive upside.
- Beverage and cannabis companies striking deals to gain market access.
- New technologies could snag significant market share.
Once viewed as wild conjecture for the future of cannabis markets, forecasts in 2015 fell severely short of actuality. At that time, consensus was that Canada could reach CA$2.8 billion in legal sales by 2020. Sage prognosticators now say that the market may exceed CA$7 billion in 2019. Catering to the tastes of market demographics, intense interest is now focused on the cannabis-infused beverages market. Not even legal in Canada until this fall, the infused beverage market is already pegged to reach a mind-boggling CA$4.4 billion within five years.
Joining the ranks of the majors to meet this titanic demand, Sproutly Canada Inc. (OTCQB: SRUTF) (CSE: SPR) (SRUTF Profile) announced a joint venture with Moosehead Breweries, the largest and oldest independent beer company in Canada. Cannabis colossus Tilray Inc. (NASDAQ: TLRY) announced a research partnership into infused beverages and is bringing in executives with backgrounds in the beverage industry. The maker of Corona and Modelo beer increased its stake in Canopy Growth Corp. (TSX: WEED) (NYSE: CGC) to 38%, spurring speculation of cannabis-infused beverages to come. HEXO Corp. (NYSE American: HEXO) (TSX: HEXO) entered a joint venture with Molson Coors Canada to produce CBD-infused beverages. And New Age Beverages Corp. (NASDAQ: NBEV) is anticipated to begin roll out of Marley+CBD-infused drinks in four targeted U.S. states.
The cannabis industry presents a rare opportunity to profit from spectacular growth in a virtually untapped market.
- Legal marijuana market projected to reach $146.4 billion.
- United States and Canada current epicenter of cannabis growth.
- Brand recognition and retail reach imperative for market share.
Capturing market share and creating long-term success in this explosive market will require brand recognition and retail reach. Shortly after posting its tenth consecutive quarter of increased revenues, Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile) announced intentions to further expand its footprint with the acquisition of premier licensed cannabis retailer, City Cannabis Corp. A finalized accretive acquisition will add significant revenues to Wildflower, providing access to several valuable cannabis licenses in lucrative premium locations. Other companies in the sector are looking to grow in the market through other promising ways. Tilray Inc. (NASDAQ: TLRY) recently acquired Natura Naturals Holdings, boosting capacity to supply cannabis products across Canada. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) bought hemp company AgriNextUSA to accelerate entry into key American jurisdictions. Medmen Enterprises Inc. (OTCQX: MMNFF) (CSE: MMEN) announced the purchase of two vertically integrated operations, which include retail locations and 25,000 square feet of cultivation and production capacity. And only two weeks ago, Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) completed the acquisition of Eureka to provide access to California’s wholesale market through a large greenhouse facility.
Ever since the Farm Bill was signed into law, farmers across the United States have rushed into hemp cultivation, driving demand for the supplies needed to grow the crop necessary to meet surging CBD use.
- Global hemp industry to reach $22 billion in 2022.
- CBD market could increase 40 times in the next four years.
- Hemp farming skyrockets to meet demand.
- Serious squeeze on hydroponic and cultivation supply products.
Hemp is booming across the country, and nowhere more so than in Kentucky, where the applications to grow hemp are expected to increase fivefold, and acreage dedicated to growing the crop is set to more than triple this year. At the forefront of this explosive market growth, Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) recently inked a strategic supply contract with Hempistry Inc., a leading Kentucky-based cultivator of high CBD content hemp. Since passage of the farm bill, other major Canadian producers have also been making deals to expand hemp and CBD operations south of the border. Tilray Inc. (NASDAQ: TLRY) announced the acquisition of a large hemp foods maker, and Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is making substantial investments in New York state. Aphria (NYSE: APHA) (TSX: APHA) temporarily withdrew from the U.S. market while fighting off a hostile takeover bid. And after a $1.8 billion investment from a U.S. tobacco giant, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) is expanding globally with eyes to the U.S. markets in the future. Even the largest Canadian licensed producers are betting on hemp CBD, underscoring titanic market growth.
The CBD market is seeing strong growth and a move towards the mainstream.
- The North American CBD market, worth more than $9 billion in 2017, is projected to be worth $47 billion by 2027.
- Growth is possible partly through mainstream acceptance, with pressure on a variety of institutions to accept medical CBD.
- Leaders are emerging within the CBD and cannabis markets, as leading voices gain recognition for their work.
Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile), which focuses on health and wellness products, is benefiting from this growth through the establishment of strong distribution deals. Focused on the organic market, Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD) has significantly increased its output to meet demand. Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) has earned its CEO industry-wide recognition through strong growth and a powerful place as a market leader. HEXO Corp. (NYSE American: HEXO) (TSX: HEXO) is pushing CBD and cannabis toward the mainstream through connections with food and consumer product companies. Significant developments in science and agriculture, where Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) is making great steps forward in developing low-cost high-quality hemp, is also strengthening the plant.
The U.S. Farm Bill that recently passed into law is a game-changer for the CBD space. While it is unknown when nationwide cannabis legalization may occur, incredible opportunities exist right now for CBD-focused companies that can deliver products to the marketplace.
- Demand is growing for organic CBD products in markets where such products are legal.
- Youngevity has made a series of strategic acquisitions to help establish the company’s position
- Companies ready to deliver CBD products to market at scale are in ideal position to capitalize on growing demand.
Passage of the latest U.S. Farm Bill marked a watershed moment for CBD producers in the United States. Not only does the new body of law allow these producers to commercialize existing CBD products, the door is now open for a new generation of research into what CBD can do for consumers. Youngevity International Inc. (NASDAQ: YGYI) (YGYI Profile) is a leading producer of consumer-focused CBD products that is expanding its reach into other areas of the CBD supply chain. It joins companies such as CV Sciences Inc. (OTCQB: CVSI), Isodiol International Inc. (CSE: ISOL) (OTCQB: ISOLF), GW Pharmaceuticals plc (NASDAQ: GWPH) (OTC: GWPRF), and Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA), which are all working to commercialize CBD products in both the consumer and pharmaceutical sectors.
A surge in hemp production means big business for hydroponic suppliers.
- Hemp production set to massively increase in the United States this year.
- Increased production driving high demand for hydroponic supplies.
- Hydroponics companies are responding with expansion and acquisitions.
Sugarmade Inc. (OTC: SGMD) (SGMD Profile) has strategically acquired several companies to meet demand and expand its foothold. Canadian-based Tilray Inc. (NASDAQ: TLRY) has expanded production in both Canada and Europe while Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is developing projects in the United States, and Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has received massive outside investment to fuel its growth. Companies such as Aphria (NYSE: APHA) (TSX: APHA) are enlarging their indoor grow operations as they too rush to meet demand.
Analysts at Brightfield Group see CBD (cannabidiol) gobbling up a sizeable chunk of a projected $100 billion nutraceuticals 2022 U.S. market.
- $22 billion-plus CBD market could eclipse broader cannabis market
- Growing consensus about health benefits backed by clinical work, personal endorsements
- CBD found in everything from beverages and dog treats to pharmaceuticals and wellness products
The opening of the CBD floodgates represents a huge opportunity for plant-based wellness and health-product developers such as Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile) and Green Growth Brands Inc. (OTCQB: GGBXF) (CSE: GGB), a lifestyle-oriented developer of cannabis and CBD consumer products. Similarly, some of the fastest-growing producers in the industry today, such as Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Green Organic Dutchman (OTCQX: TGODF) (TSX: TGOD) and HEXO Corp. (NYSE: HEXO) (TSX: HEXO) all stand to benefit as the rising tide of the CBD market continues to see tremendous growth for a number of reasons.