Home / Uncategorised / Growth in Cannabis Remains Strong in North America as Companies Expand

Growth in Cannabis Remains Strong in North America as Companies Expand

NEW YORK, April 15, 2019 /PRNewswire/ — Canada moved to legalize cannabis entirely in late 2018, however, cannabis-based companies remain more attracted to the U.S. market. The U.S. has not moved to legalize cannabis federally, instead, states are given the jurisdiction to legalize cannabis for either medical or recreational use. So far, more than half of the U.S. has adopted medicinal cannabis use, while 10 states and the District of Columbia have legalized recreational use as well. Despite not having legalized cannabis entirely, the U.S. market is one of the most attractive marketplaces for cannabis companies and investors. Many of these Canadian-based cannabis companies are beginning to establish operations in the U.S., particularly in large markets such as California, Colorado, and Nevada. On the other hand, some are moving towards emerging markets such as Massachusetts, Michigan, and Oregon. According to data by Bloomberg, most U.S.-focused cannabis companies generated higher gross margins than their Canadian counterparts in the most recent quarter. However, Canadian cannabis companies trying developing operations in the U.S. are often held back by regulatory matters. Pending future clinical trials and studies, more countries are expected to adopt cannabis laws, thus restructuring cannabis regulatory laws both domestically and abroad. According to data compiled by Grand View Research, the global legal marijuana market is expected to reach USD 146.4 Billion by the end of 2025, exhibiting a CAGR of 34.6%. WeedMD Inc. (OTC: WDDMF) (TSX-V: WMD), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Molson Coors Brewing Company (NYSE: TAP) (TSX: TPX), Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB).

Despite the U.S. representing vast growth opportunities, cannabis companies are still expanding their operations in Canada. According to Arcview Market Research and BDS Analytics, Canada reported legal cannabis sales in the range of USD 755 Million to USD 1.6 Billion. Furthermore, the research suggests that the Canadian legal market is expected to reach USD 7.8 Billion by 2022. The Canadian market is even expected to become the largest marketplace, overtaking California in the process. In 2017, California delivered over a billion dollars in cannabis revenue alone, which made it one of the biggest industry market drivers. As the Canadian market continues to develop, it is projected to witness more consumers than California, as the report noted that in 2018, adults who consumed cannabis in Canada grew by 21% to 25% total. Moving forward, the U.S. and Canada are expected to be the biggest market drivers for the global cannabis industry. Moreover, as the two nations continue to deliver explosive cannabis sales, it could potentially influence other countries to consider legalization. “Predicting the future of cannabis isn’t the easiest thing to do, but there are certain things that we know for a fact will happen/change,” said Arnaud Dumas de Rauly, Co-Chief Executive Officer of The Blinc Group. “The first being that Cannabis will come off Schedule 1. The majority of the industry doesn’t think this will happen within the current administration but we believe it will happen sooner than later. This will lead to a more mainstream approach to compliance and the involvement of organizations like the FDA, if they are given a mandate. Then will come a regulatory framework and we’ll be confronted with inconsistencies regarding state-level and federal regulations.”

WeedMD Inc. (OTCQX: WDDMF) (TSX-V: WMD) is also listed on the TSX Venture Exchange under the ticker (TSX-V: WMD). The company just announced breaking cannabis news that, “a federally-licensed producer and distributor of medical-grade cannabis, is pleased to announce it has received a Health Canada Standard Processing Licence (“Processing Licence”) for its 158-acre Strathroy facility. This marks an important step in the Company’s ability to scale up production, packaging and distribution of cannabis products from its large scale production site.

“Our recently announced outdoor production expansion combined with this Processing Licence positions WeedMD with the ability to fully execute on its plans to scale up our downstream capacity in packaging and distribution,” said Keith Merker, CEO of WeedMD. “This is another critical milestone that will enable WeedMD to address the current supply bottlenecks being experienced across the Canadian cannabis industry.”

As previously announced, WeedMD plans to increase its total yield to more than 150,000 kgs of quality-driven greenhouse and outdoor cultivation – all of which is expected to be at full capacity in 2020. The Company has applied to Health Canada for an amendment to its Strathroy licence to expand beyond its greenhouse cultivation with an initial 25-acre, low-cost, outdoor grow operation in 2019. Outdoor grow video here. An additional 75 acres of outdoor grow is planned to come online in Phase II in 2020.

About WeedMD Inc. – WeedMD Inc. is the publicly-traded parent company of WeedMD Rx Inc., a federally-licensed producer and distributor of cannabis products for both the medical and adult-use markets. The Company owns and operates two facilities: a 26,000 sq. ft. indoor facility in Aylmer, Ontario and a state-of-the-art greenhouse and outdoor facility located on 158 acres in Strathroy, Ontario. The Company currently has 136,000 square feet of licensed production space between the two sites and is expected to have a total footprint of more than 550,000 square feet of indoor and greenhouse production in addition to more than 25 acres of outdoor cultivation space online in the first half of 2019. WeedMD has a multi-channeled distribution strategy that includes selling directly to medical patients, strategic relationships across the seniors’ market and supply agreements with Shoppers Drug Mart as well as six provincial distribution agencies.

For more information, access WeedMD’s investor presentation here (https://www.weedmd.com/investing-in-weedmd/) and recently updated corporate video here (https://www.youtube.com/watch?v=ktgJ_BQtBCs&feature=youtu.be).

For our latest “Buzz on the Street” Show featuring WeedMD Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=5Ye5zahoypA

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. Spectrum Cannabis, a wholly-owned subsidiary of Canopy Growth Corporation recently announced a partnership with and endorsement from CARP, Canada’s largest and most trusted advocacy association for aging Canadians and its print, online, radio and TV voice, ZoomerMedia. Spectrum Cannabis will be offering tailored educational initiatives for over 320,000 CARP members seeking more information on medical cannabis, along with preferred pricing for Spectrum Cannabis branded products which have received the “CARP Recommended” seal. Understanding the utility of medical cannabis is increasingly of interest to older Canadians, especially its potential to displace less-desirable drugs for both pain and cognitive function. The appeal of Spectrum Cannabis, particularly with this demographic, is the simplification around strength and dosage by applying a colour-coded spectrum to categorize medical cannabis according to THC and CBD levels. “This partnership with CARP, an organization dedicated to improving the lives of Canadians above the age of 45, will help to disseminate accurate information and quality products to a patient demographic that is highly engaged in learning more about how medical cannabis can improve their quality of life when conventional medicine just isn’t enough,” commented Mark Zekulin, President & Co-Chief Executive Officer, Canopy Growth.

Molson Coors Brewing Company (NYSE: TAP) (TSX: TPX) has defined brewing greatness for more than two centuries. Molson Coors Canada (MCC), the Canadian business unit of Molson Coors Brewing Company, and HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO) recently announced that they have closed the transaction announced on August 1, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer. Vye will report to the Truss board of directors consisting of three members appointed by MCC and two members appointed by HEXO. “With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running,” said Brett Vye, Chief Executive Officer at Truss. “When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer. Why “Truss”? We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future.”

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 it that it has 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 believe that the potential applications of cannabinoids to regulate skin health and treat skin disorders are vast, and we are excited to begin exploring these applications through our partnership with Technion,” said Mike Gorenstein, Chief Executive Officer of Cronos Group. “Using rigorous data to develop efficacious topical and transdermal formulations will be key to creating differentiated products that provide quality treatments to our consumers and strengthen our brand portfolio.”

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000kg 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 an update on the status of Aurora Sun, the Company’s latest and largest Sky Class facility, which is currently under construction in Medicine Hat, Alberta. To support the rapidly growing global demand for high-quality medical cannabis in Canada and abroad, the facility will be expanded to 1.62 million sq. ft., representing a 33% increase from its originally planned 1.2 million sq. ft. With the Sky Class production philosophy proven at Aurora Sky, the Company is confident in projecting an expected production capacity at Aurora Sun in excess of 230,000kg of high-quality cannabis per annum. “Aurora Sun represents the next evolution in our Sky Class facility design, delivering massive scale, low cost production, and consistent, high-quality cannabis,” said Terry Booth, Chief Executive Officer of Aurora. “Particularly in newly-opened markets, establishing first-mover position and embedding Aurora’s market share and brand requires a stable and reliable supply of high-quality cannabis for these markets. The increased scale of Aurora Sun reflects our expectations for the long-term growth in global demand, especially the higher margin international medical markets which will be faced with significant supply shortages for the foreseeable future. Sun is also designed with flexibility in mind to enable us to quickly meet changing market demands, particularly as breeding and cultivation technologies evolve and as customer preferences and requirements change.”

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