The cannabis industry experienced uplifting news after the U.S. Food and Drug Administration announced it is expediting processes to address the matter regarding cannabidiol or CBD. FDA Principal Deputy Commissioner and Acting Chief Information Officer Amy Abernethy announced in a series of tweets that the matter is an “important national issues with public health impact.” Moreover, Abernethy says that the FDA is enthusiastic about researching regarding the therapeutic benefits of CBD products. Similarly, former FDA commissioner Scott Gottlieb also made it a goal to expedite research regarding CBD. The conjoined efforts of the public and the FDA ultimately led to the passage of the U.S. Farm Bill and the descheduling of CBD by the U.S. Drug Enforcement Administration. Additionally, the FDA approved the use of Epidiolex, a CBD-based drug, to treat epilepsy common among children. Following the passage, CBD products rapidly emerged throughout the U.S. from local brick-and-mortar stores to giant e-commerce portals. However, the FDA has made it clear that the addition of CBD in foods and beverages is still prohibited. Nonetheless, consumers can still obtain these health and wellness products containing CBD in some areas. Furthermore, CBD has also become prevalent in nations such as Australia, Chile, Colombia, France, Germany, and Spainas they have legalized cannabis for medical applications. Primarily, most of the regions are using CBD to treat patients suffering from conditions such as multiple sclerosis, cancer, chronic pain, epilepsy, and depression. While the CBD marketplace is thriving globally, the THC market is experiencing growth in regions where recreational cannabis is legal. Overall, the combination of the two markets is causing the broader cannabis industry to undergo exponential growth and development. According to data compiled by Mordor Intelligence, the global cannabis industry was valued at USD 14.5 Billion in 2018. By 2024, the market is expected to reach USD 89.1 Billion while registering a CAGR of 37% during the forecast period from 2019 to 2024. MediPharm Labs Corp. (OTC: MEDIF) (TSX-V: LABS), Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD), Charlotte’s Web Holdings, Inc. (OTC: CWBHF) (TSX: CWEB)
As hemp production increases, Californian legislators have extended the duration of thousands of cannabis cultivation licenses to support the state’s thriving industry.
The steady decrease in alcohol consumption has led consumers to find new alternatives. And specifically, the rise of cannabis is directly correlated with declining alcohol consumption rates. Investment bank firm Cowen & Co. reported that legal adult use cannabis states witnessed binge drinking rates fall by 9% below the national average, and 11% below non-cannabis states. However, newly added states such as California and Nevada currently have higher rates of binge drinking intensity and lower levels of cannabis consumption. As a result, Cowen said it is reasonable to assume that as more states legalize adult use cannabis, the alcohol binge drinking rates will begin to falter. The Centers for Disease Control and Prevention estimated that 17% of the U.S. population engaged in binge drinking, meaning that 1 in 6 reported doing so 4 or more times a month. In states that legalized adult use, the number of binge drinking sessions per month was 9% below the national average. In particular, many millennials have opted to consume cannabis over drinking alcohol. For instance, according to a MarketWatch article, a millennial said that she prefers to consume cannabis over alcohol because it saves her more money and doesn’t cause intoxicating effects of alcohol. According to a Yahoo News poll in 2017, it was concluded that the majority of the 55 million recreational marijuana users in the U.S. are millennials. Meanwhile, a national survey conducted by the Monitoring the Future Study uncovered that the share of college students drinking alcohol daily fell from 4.3% in 2016 to 2.2% in 2017. Furthermore, Cowen & Co. analysts project the U.S. cannabis market to reach sales of approximately USD 75 Billion by 2030. And while the U.S. accounts for a majority of the global cannabis market share, other regions are rapidly emerging and witnessing faster growth rates. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Aphria Inc. (NYSE: APHA) (TSX: APHA), Organigram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD).
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Consumer buying habits are shifting, as the cannabis industry evolves. As that happens, investors are being offered incredible opportunities. For example, according to GMP Securities, “demand for extracted products is going to explode this fall with the arrival of vape pens and infused products,” as quoted by Marijuana Business Daily, adding that vape pens could lead with 20% of the extracts sector. In addition, Aphria Inc. says, “The expected legalization of vapes and concentrates will mark a significant turning point in the Canadian market, providing more choice and new experiences, while opening the door to a range of new consumers,” adding that vapes and concentrates will represent close to 30% of the entire Canadian adult-use market by 2021. Better, Canadian consumers will be able to buy edibles, concentrates, and vape pens in mid to late December 2019 after Health Canada released the final version of regulations. That’s opening a wide range of opportunity for companies including Vapen MJ Ventures (CSE: VAPN), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF), Aphria Inc. (NYSE:APHA) (TSX: APHA), and GW Pharmaceuticals PLC (NASDAQ: GWPH).
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With the spread of pharmaceutical therapy, the cannabidiol market is positioned to experience immense growth in the shortcoming years. Cannabidiol, or CBD, is a derivative found within the cannabis plant. While CBD stems from the cannabis plant, it does not offer the same effects that cannabis is commonly associated with. Instead, CBD offers consumers a more relaxing and therapeutic effect as opposed to a psychoactive “high.” Typically, legally sold CBD is derived from the hemp plant, which falls within the cannabis family. Compared to its marijuana counterpart, hemp generally contains less than 0.3% THC levels, which cannot cause any cerebral-altering effects. Henceforth, many medical institutions are evaluating the efficacy of CBD and potentially leveraging it for medical applications. Furthermore, current studies have linked CBD to the successful treatment of a number of ailments such as cancer, chronic pain, multiple sclerosis, and epilepsy. Primarily, most studies have returned promising results and as a result, the U.S. Food and Drug Administration ultimately approved Epidiolex, the first ever cannabis-derived drug, in order to treat epilepsy among children. The approval of Epidiolex marked a historic milestone for the cannabis industry because it is the first time a cannabis-based product has been recognized by a U.S. agency since the prohibition era began. The FDA’s decision highlights the medical importance that CBD can offer for consumers. However, in order to progress further in the medical cannabis marketplace, the FDA said it requires more large-scale positive clinical trials to fully understand CBD. Nonetheless, more and more countries around the world are beginning to explore opportunities within the CBD industry. Significant economic, political, and legislative shifts across the world are expected to impact the approval of CBD. According to data compiled by Reports and Data, the global CBD market is expected to grow from USD 1.04 Billion in 2018 to USD 16.32 Billion by 2026. Additionally, the market is projected to witness a CAGR of 27.7% during the forecasted period. Pressure BioSciences, Inc. (OTC: PBIO), Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE), Charlotte’s Web Hldgs Inc. (OTC: CWBHF) (CSE: CWEB), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD), MariMed, Inc. (OTC: MRMD)
The date has been set for the rollout of new cannabis products in Canada, such as vape pens, edibles, beverages, topicals, and extracts. Regulations for this second wave of legalization, dubbed “Cannabis 2.0”, go into effect on October 17th, with products hitting shelves about two months later. Companies are well-positioned for this new growth opportunity are emerging, such as Organigram Holdings Inc. (NASDAQ:OGI) (TSX.V:OGI), Namaste Technologies (TSX.V:N) (OTCQB:NXTTF), The Supreme Cannabis Company (TSX:FIRE) (OTCQX:SPRWF), The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) and HEXO Corp. (NYSE:HEXO) (TSX:HEXO).
In October 2018, Canada made history and became the second nation to legalize cannabis. Adding to the legislation’s significance is the fact that Canada enjoys the status of a G-7 nation. Furthermore, the remaining G-7 nations have all since adopted full or partial medicinal cannabis legislation, except for Japan. And since legalizing the plant, Canada has seen a large influx of new users willing to try it out. In the first quarter of 2019, Statistics Canada reported that about 5.3 million Canadians, or 18% of the population, 15 years and older reported using cannabis during the period. Remarkably, the estimated figure was 14% higher compared to the same period a year ago when recreational cannabis was still illegal. Among the reported consumers during the quarter, approximately 646,000 said they used cannabis for the very first time, nearly doubling year-over-year. The statistics suggest that first-time users are now more inclined to try cannabis due to its newfound legal status. Despite having access to sanctioned cannabis, an abundance of Canadians still receive their cannabis supply from a black market vendor. However, the number of Canadian dabbling in the black market has significantly fallen following legalization. During the quarter, it was reported that an estimated 47% of cannabis users, or 2.5 million Canadians, obtained their cannabis from legal sources such as dispensaries and retailers, which have more than doubled year-over-year. Government agencies have stressed the importance of purchasing cannabis from a credible and authorized source because the supply is generally much safer, as typically, most consumers who purchase on the black market have no idea where their supply came from and what it was treated with throughout the growing process. On the other hand, licensed cannabis operators are required to fully disclose the process from when it is first planted to when it is sold to the consumer, or seed-to-sale. As the legal market continues to mature throughout Canada, more and more users are expected to dive into the industry for the first time. And if Canada’s market continues to thrive and show positive results, other countries may be influenced and move towards legalization as well. According to data compiled by Verified Market Research, the global marijuana market was valued at USD 42.20 Billion in 2016. By 2025, the market is expected to reach USD 466.81 Billion while registering a CAGR of 35.3% from 2018 to 2025. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Aphria Inc. (NYSE: APHA) (TSX: APHA), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD), iAnthus Capital Holdings, Inc. (OTC: ITHUF) (CSE: IAN)
Cannabis wellness products have gone mainstream. As CBD products find their way onto the shelves of Sephora, Barney’s, Estee Lauder, Vitamin Shoppe, and Ulta Beauty, analysts believe the trend could be a significant catalyst. In fact, given sizable interest, Piper Jaffray believes the CBD market could be worth up to $100 billion. That’s opening a wide range of opportunity for companies including The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF), Green Growth Brands Inc. (CSE:GGB)(OTC:GGBXF), The Green Organic Dutchman Holdings Ltd. (TSX:TGOD)(OTC:TGODF), Charlotte’s Web Holdings Inc. (CSE:CWEB)(OTC:CWBHF), and SLANG Worldwide Inc. (CSE:SLNG)(OTC:SLGWF).