The cannabis industry is set to maintain its positive trajectory as legalization sweeps throughout the U.S., Europe, and Latin America. For instance, Jefferies Group, an investment bank, predicts that these regions will legalize cannabis for both medical and recreational use in the shortcoming years. Moreover, Jefferies projects that the cannabis industry will also penetrate into various industries such as pharmaceutical, alcohol, health and wellness, and pet supply industries. Notably, Canada made headlines in 2018 after it became the second country to ever legalize cannabis and the first G-7 nation to do so. Additionally, the remaining G-7 nations, with the exception of Japan, have all adopted partial or full medical cannabis programs, while several have decriminalized the recreational use of cannabis. Uruguay was the first country to fully legalize cannabis back in 2013. And while Canada and Uruguay have both legalized cannabis entirely, the U.S. remains the largest sole market in the industry. Despite not having federally legalized cannabis, the country still delivers billions of dollars in cannabis sales annually, largely thanks to states such as California, Colorado, Nevada, and Washington. Jefferies predicts that less regulated markets can account for nearly USD 80 Billion of the total global cannabis market value. Specifically, Jefferies projects the U.S. cannabis market to reach a value of USD 21.7 Billion by 2029, compared to Canada’s estimate of just USD 5.8 Billion. Additionally, the estimated value is added onto Jefferies’ base valuation for the global cannabis industry of USD 50 Billion by 2029, a figure that accounts for the countries that have already legalized cannabis for either medical or recreational use. As a result, Jefferies forecasts that the total global legal cannabis industry is positioned to reach USD 130 Billion by 2029. Pasha Brands Ltd. (OTC:CRFTF) (CNSX:CRFT.CN), HEXO Corp. (NYSE-A:HEXO) (TSX:HEXO.TO), Charlotte’s Web Holdings, Inc. (OTC:CWBHF) (TSX:CWEB.TO), The Supreme Cannabis Company, Inc. (OTC:SPRWF) (TSX:FIRE.TO), Emerald Health Therapeutics Inc. (OTC:EMHTF) (TSXV:EMH.VN)
While the legal cannabis industry is growing worldwide, the black market is still heavily prevalent in many regions. Jefferies’ analysts accounted for the global illicit market in its research, which the firm estimated it to be valued at around USD 150 Billion to USD 200 Billion. Jefferies’ estimates note that the overall cannabis market, including both legal and illicit channels, would be currently valued at approximately USD 210 Billion. Jefferies did also mention that the eradication of the black market would take some time because it would require global legalization. Nonetheless, the number of consumers purchasing from the black market have dwindled in regions where cannabis is legalized. For instance, during Canada’s first quarter of legalization, it was reported that an estimated 47% of cannabis users or 2.5 million Canadians purchased their supply from a legal vendor, which has more than doubled year-over-year, according to Statistics Canada. Many companies within the cannabis marketspace have also made it their mission statement to eliminate illicit sources and provide consumers with high-quality products. For this reason, cultivators have engaged in advanced growing methods and techniques to outshine the black market. In recent years, cultivators have practiced the artisanal profession of growing “craft cannabis,” which is known to be a meticulous process of growing cannabis. Craft cultivators pride themselves on premium and naturally grown cannabis that stands out when compared to large-scale producers and illegal vendors. To emphasize, craft cultivators stray away from artificial byproducts such as pesticides to create a more organic end product. By avoiding the use of pesticides, cultivators are required to tend to each individual plant to avoid molding or infestations, while the attentive procedure also ensures that each and every plant grows high-quality buds. While craft cannabis is generally costlier than wholesale-produced cannabis, the quality between the two is drastically different. Generally, craft cultivators engage more hands-on, meaning that plants are hand-trimmed and carefully packaged to assure that the buds are intact and maintain their cannabinoids. “Large-scale production has such a negative connotation right now that everyone is rushing to be ‘craft’ or ‘small-batch’ or ‘artisanal,'” Jake Browne, Co-Founder of The Grow-Off said. “In reality, a lot of this product [large-scale producers] is machine trimmed and packed by temp workers barely making minimum wage.”
Pasha Brands Ltd. (OTC:CRFTF) (CNSX:CRFT.CN) is also listed on the Canadian Securities Exchange under the ticker (CNSX:CRFT.CN). Earlier last month, the Company announced the “addition of three well-respected cannabis experts to the growing Pasha family: Scientific researcher Dr. Cris Felipe Alves, second-generation cultivator and consultant Travis Lane, and lifelong cultivator Kemal Morris.
As a solution provider to the craft cannabis industry, Pasha subsidiary BC Craft Supply Co. Ltd. (“BC Craft Supply”) aims to provide cannabis farmers with the tools to transition to new regulations governing the micro-cultivation licence category. These experts will assist farmers in making that transition.
‘I’m thrilled to have these experts join our team, and, with their support, I look forward to disrupting the market with craft products that will help solve Canada’s ongoing supply chain issues,’ said Patrick Brauckmann, Executive Chairman of Pasha Brands. ‘With these additions to the Pasha family, I’m confident that enthusiasm for craft products will continue to grow.’
Dr. Cris Felipe-Alves has worked in academic and commercial settings in Australia, Asia, and North and South America, and holds a B.Sc in Biological Sciences from the University of Brasília, and a PhD in Molecular Biology and Biochemistry from Nagoya University. While working as a senior scientist at a global diagnostics company, he led a team of researchers from discovery to R&D and sales of molecular tools designed to detect cancers non-invasively. During this time, he became interested in the potential for cannabis as a curative agent against several types of cancer. Since then, he has worked as an extraction specialist and a Quality Assurance Manager. He will act as the Senior Quality Assurance Person at BC Craft Supply.
‘Here at Pasha, I feel at home and am proud to be part of a brand house that has a focus on craft products,’ said Dr. Felipe-Alves. ‘I look forward to helping Pasha generate safe and efficient cannabis-based products that suit the needs of both recreational and medical consumers both in Canada and around the world.’
Renowned cultivator and consultant Travis Lane has been growing cannabis for more than 20 years. An organic, living-soil-based cultivator who has advocated for the facilitation of pesticide-free, sun-grown cannabis production, Lane has been involved in the founding of numerous small cannabis businesses over the last decade, including a successful chain of storefront dispensaries, a thriving online mail order service, and was a founding partner in one of the most successful hydrocarbon extraction brands in the country. Under legalization, Lane has divested from the illicit market to focus on multiple Cannabis Act license applications, as well as his work with Groundwork Consulting, focused on government relations and licensing for cultivation and retail, and Levity Solutions, a multi-purpose cannabis consultancy focused on assisting aspiring legal cultivators. He will act as a consultant for Pasha Brands and its subsidiaries.
‘The level of talent and expertise that exists in the prohibition-era marketplace is beyond impressive,’ said Lane. ‘These long-time innovators will represent a huge market factor once licensed, and I am proud to help Pasha facilitate this next wave.’
Kemal Morris is a lifelong cultivator who has had his hands in the soil ‘since before he could walk’. He watched his parents grow their own food – and cannabis – on Saltspring Island, British Columbia. Soon after Canada launched its first medical cannabis program in 2001, he spent 14 years learning the intricacies of breeding and extract production. In addition, Morris has spent the last four years launching a prominent Canadian Licensed Producer. He is passionate about patients and has connected hundreds of struggling patients with medicine. As the Master Grower for Pasha Brands’ owned Vancouver Island Licensed Producer, MedCann, Morris will act as facility designer, cannabis expert, educator and facilitator.
‘After completing a four-year term in the regulated industry, I am excited to work with Pasha,’ said Morris. ‘I finally have the opportunity to share all that I have learned with the cannabis enthusiasts I came up with, and I’m proud to be part of a company that is breaking the big business mold – affording a rightful place to the people who risked everything to create this thriving industry.’
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”. For more information, please visit www.pashabrands.com”
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HEXO Corp. (NYSE-A:HEXO) (TSX:HEXO.TO) is an award-winning consumer packaged goods cannabis company that creates and distributes prize-winning products to serve the global cannabis market. HEXO Corp. and Newstrike Brands Ltd. recently announced that they had entered into a definitive arrangement agreement under which HEXO will acquire, by way of a plan of arrangement under the Business Corporations Act (Ontario), all of Newstrike’s issued and outstanding common shares in an all-share transaction valued at approximately USD 263 Million. The Transaction gives HEXO the capacity to produce approximately 150,000 kg of high-quality cannabis annually. The Transaction also provides HEXO access to four cutting-edge production campuses totalling close to 1.8 million sq. ft. of near-term cultivation space and diversified growing and production techniques. This is in addition to HEXO’s 579,000 sq. ft. facility for a manufacturing and product development center of excellence in Belleville, Ontario. Combined, HEXO and Newstrike have established distribution agreements in 8 provinces including Ontario, Quebec, British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, and Prince Edward Island, allowing broad consumer access to HEXO’s products across Canada. Newstrike’s licensed indoor facility provides HEXO with access to diversified growing techniques and positions HEXO for flexibility for international exports as global cannabis markets continue to open. “We’re thrilled to welcome the Newstrike team into the HEXO family. Jay Wilgar, Chief Executive Officer of Newstrike, and his team have built incredible relationships, including teaming up with The Tragically Hip, and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere,” said Sebastien St-Louis, Chief Executive Officer and Co-Founder of HEXO Corp. “With Newstrike, we’re adding talented employees and infrastructure to take HEXO to the next level on our journey to become one of the largest cannabis companies in the world. We’re extremely proud of our record of execution, and today are committing to achieving over USD 400 Million in net revenue in 2020.”
Charlotte’s Web Holdings, Inc. (OTCQX:CWBHF) (TSX:CWEB.TO) is the market leader in the production and distribution of innovative hemp-derived cannabidiol (“CBD”) wellness products. Charlotte’s Web Holdings, Inc. recently reported final hemp planting for its 2019 growing season. In order to meet growing demand from consumer and retail channel partners, total acres planted for 2019 has been increased to 862, an 187% increase from 300 acres planted in 2018. In 2016, 2017 and 2018, the Company produced 41,000 lbs., 63,000 lbs. and 675,000 lbs., respectively, of dried hemp biomass. “Interest and demand for our products has been exceptional and growing rapidly. Our 2019 planting strategy ensures we will have the required raw materials to deliver on production targets for Charlotte’s Web products through 2020 and into 2021,” stated Deanie Elsner, Chief Executive Officer of Charlotte’s Web. “Our leading CBD hemp varieties under cultivation today are the foundation of our 2020 production plan. Tens of thousands of Americans have come to rely on Charlotte’s Web products daily making it essential that our products are always available, efficacious and consistent day-to-day, bottle-to-bottle, year-to-year.”
The Supreme Cannabis Company, Inc. (OTCQX:SPRWF) (TSX:FIRE.TO), is a globally diversified portfolio of distinct cannabis companies, products and brands. The Supreme Cannabis Company, Inc., in partnership with Khalifa Kush Enterprises Canada ULC, recently launched KKE Oil, the first product under the KKE brand line. KKE Oil is a premium, recreational focused oil, developed for the consumer who wants the convenience, high THC potency and precise dosing offered by a cannabis oil. KKE Oils are one of the first ever recreational-focused cannabis oils available to consumers in Canada. Wiz Khalifa and the KKE team specifically selected the Supreme Cannabis’ wholly-owned subsidiary, 7ACRES Sensi Star strain for the debut of the line. “We firmly believe that a high-quality input supports high-quality output and KKE Oil embodies this belief. We are excited to launch one of the first recreational focused cannabis oils in Canada with Wiz Khalifa and the KKE team. KKE Oils are easy to consume, effective and deliver the aromatic terpene profile 7ACRES’ Sensi Star is known for. We can’t wait to launch the full suite of KKE products, including KKE Jean Guy Oil, later this year,” said John Fowler, President and Founder of Supreme Cannabis.
Emerald Health Therapeutics Inc. (OTCQX:EMHTF) (TSXV:EMH.VN) is a Canadian licensed producer of cannabis. Emerald Health Therapeutics, Inc. recently reported that is had expanded its agreement to purchase harvested hemp flower and leaf, or hemp chaff, from Emerald Health Hemp Inc. (“EHH”) from 1,000 to 1,200 acres for 2019. EHH is a wholly owned subsidiary of Emerald Health Sciences Inc. and a related party of Emerald. Based on last year’s harvest, Emerald expects production from the 1,200 acres to be at least 270,000 kg of hemp chaff in 2019 with, conservatively, approximately 2% cannabidiol (“CBD”) content. Emerald estimates that this hemp may yield 3,500 kg of extracted CBD, which it plans to use to manufacture premium oils, softgels and associated value-added products for Canadian adult-use and medical consumers. “Emerald, through its partnership with the Factors Group and their scalable processing capacity, is uniquely situated to become one of Canada’s leading producers of premium CBD products from hemp,” said Dr. Avtar Dhillon, President and Executive Chairman. “We established our first-mover advantage in 2018 by securing hemp on a large scale and gaining production insights that will benefit us in 2019. With even more supply contracted for this year, we expect significant near-term growth in this market segment.”
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