NEW YORK, Feb. 21, 2019
NEW YORK, Feb. 21, 2019 /PRNewswire/ -- The cannabis industry saw strong investor support throughout 2018, which had also carried over into 2019. A slew of new cannabis companies listed their stocks on various exchanges such as the Canadian Securities Exchange, the New York Stock Exchange, and the Nasdaq Stock Exchange. While many of those to have listed are still small-cap companies, the booming industry has allowed some to capitalize on the opportunity and become multi-billion dollar corporations. Large investments are also pouring into the market from other sectors such as the beverage and tobacco industry, further fueling development. Even though the industry is witnessing a robust momentum, the concern over federal regulatory laws remains. Nonetheless, based on current milestones, such as Canada legalizing cannabis entirely and more U.S. states adopting positive legislative stances on the plant, the industry has the potential to broaden into an explosive market. According to data compiled by MarketsandMarkets research, the global cannabis market size is expected to grow from USD 10.3 Billion in 2018 to USD 39.4 Billion by 2023. Additionally, the market is projected to increase at a CAGR of 30.7% throughout the forecast period. MediPharm Labs Corp. (OTC: MLCPF) (TSX-V: LABS), Trulieve Cannabis Corp. (OTC: TCNNF) (CSE: TRUL), Organigram Holdings Inc. (OTC: OGRMF) (TSX-V: OGI), HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO), Aphria Inc. (NYSE: APHA) (TSX: APHA)
Due to the illegal nature of the cannabis industry, the medical segment currently accounts for the majority of the overall market value. Many countries have legalized cannabis for medical applications to treat conditions such as arthritis, chronic pain, and cancer. However, the recreational segment is witnessing substantial acceleration, primarily driven by concentrates. Regardless of the application though, the THC-dominant sector is propelling the overall industry growth. THC remains heavily regulated as opposed to its counterpart, CBD, because of its psychoactive effects. Yet, THC is also increasingly becoming adopted for both recreational and medical purposes due to its potent effects, causing it to hold the largest market share as well as register the highest CAGR among cannabis segments. Via Forbes, Scott Greiper, the President of Viridian Capital Advisors, said that the pace of legalization is accelerating around the world, not just in the U.S., for both medical and recreational marijuana. Greiper notes that the biggest drivers for creating a large consumer market are: the lifting of the stigma of marijuana; globalization; more advanced technology for agriculture, genetics, biotechnology, and the extraction business coming into a mom-and-pop industry. "This is a very dynamic marketplace for investors and acquirers," said Greiper. "This is driving companies to become more efficient and more profitable operators."
MediPharm Labs Corp. (OTCQB: MLCPF) (TSX-V: LABS) is also listed on the TSX Venture Exchange under the ticker (TSX-V: LABS). Earlier today the company announced breaking cannabis news that, "its wholly-owned subsidiary, MediPharm Labs Inc. ("MediPharm Labs" or the "Company"), has entered into its first definitive international sales agreement, dated February 20, 2019, with AusCann Group Holdings Ltd. ("AusCann") to supply private label purified, pharmaceutical grade cannabis oil concentrates, or resin, from MediPharm Labs' own inventory of oil for export to Australia. AusCann will use MediPharm Labs' concentrates to manufacture hard-shell cannabinoid capsules to address the medical patient demand and critical need for precision and consistency of dose in cannabinoid medicines.
'MediPharm Labs has quickly established a global reputation as the go-to producer of high quality, pharmaceutical grade cannabis concentrates at commercial scale. We are thrilled to have been selected by AusCann as a supplier of choice for their medical products and clinical trials," said Patrick McCutcheon, Chief Executive Officer of MediPharm Labs. "As the first extraction-only LP to begin exporting to Australia, this agreement marks an important milestone that accelerates our expectations for future growth. Looking ahead, we expect to begin supplying additional international markets to build our robust global distribution platform.'
'MediPharm Labs' significant market share combined with proprietary methodology ensures reliable supply of pharma-grade cannabinoid extracts and AusCann's continued ability to develop and deliver quality cannabinoid medicines for distribution in Australia," said Dr. Paul MacLeman, Interim CEO of AusCann. "Critical to our process is repeatability in manufacturing, reliable dosing, and purity assurance. MediPharm Labs' concentrates will form an important foundation to our products that will allow delivery of effective, trusted and safe medicines for the treatment of chronic pain'.
This marks the Company's first international export agreement and establishes MediPharm Labs as the first extraction-only licensed producer in Canada to commence exporting pharmaceutical grade cannabis oil to Australia. To date, MediPharm Labs has completed 5 private label sales agreement since receiving its sales license in November 2018. The first export of cannabis concentrate is expected be completed in the coming months, subject to regulatory requirements. The agreement has a two-year term. The Company expects to continue expanding its international distribution of its proprietary cannabis concentrate products for resale globally on a private label basis for medical markets. Initially this demand will be serviced from its wholly-owned, leading facility in Canada, and once its Australian laboratory, now under construction, is fully licensed and operational, Australia and Asia-Pacific demand can be addressed regionally.
About AusCann Group Holdings Limited: AusCann Group Holdings Limited (ASX:AC8) is an Australian-based pharmaceutical company that is working to produce high quality, economical, and clinically validated cannabinoid medicines. AusCann is bringing together leading expertise and operations across all aspects of the medical cannabis value chain, beginning with cultivation and production, through to manufacture and distribution of products. Through partnerships with industry experts, existing leading market participants and doctors, AusCann is building operations and educating the medical community about the benefits of cannabinoid medicines. Incorporated in 2014, AusCann holds all necessary licenses to grow and manufacture cannabinoid medicines in Australia. The company is initially targeting medications for neuropathic and chronic pain in Australia and Chile, whilst exploring global export opportunities.
About MediPharm Labs Corp: Founded in 2015, MediPharm Labs has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the ACMPR without first receiving a cannabis cultivation licence. This expert focus on cannabis concentrates from our cGMP (current Good Manufacturing Practices) and ISO standard clean rooms and critical environments laboratory, allows MediPharm Labs to produce purified, pharmaceutical-grade cannabis oil and concentrates for advanced derivative products. MediPharm Labs has invested in an expert, research-driven team, state-of-the-art technology, downstream extraction methodologies and purpose-built facilities to deliver pure, safe and precisely-dosed cannabis products to patients and consumers. MediPharm Labs' private label program is a high margin business for the Company, whereby it opportunistically procures dry cannabis flower and trim from its numerous product supply partners, to produce proprietary cannabis oil concentrate products for resale globally on a private label basis. MediPharm Labs was recently named START-UP OF THE YEAR at the Canadian Cannabis Awards."
Trulieve Cannabis Corp. (OTC: TCNNF) (CSE: TRUL) is a vertically integrated "seed to sale" company and is the first and largest fully licensed cannabis company in the State of Florida. National cannabis company Trulieve Cannabis Corp. recently announced that it has signed an agreement with Colorado-based Love's Oven, LLC to bring their edible cannabis-infused baked goods, craft concentrates, and other products to Florida's growing patient base. Based in Denver, Colorado, Love's Oven is a family-run cannabis company committed to creating high-quality products, using all-natural ingredients sourced locally and organically, and using a proprietary extraction method designed to ensure consistency and effectiveness. Over the past decade, Love's Oven has built a reputation for crafting clean, natural products while remaining innovative, approachable, and potent. "Love's Oven specifically crafts their products to be the highest-quality available on the market and is dedicated to helping patients achieve relief from everything from chronic pain to insomnia and other ailments. Their products are not only delicious, they're clean, organic, and, most importantly, all natural, which is what Trulieve has focused on since the beginning," said Trulieve Chief Executive Officer Kim Rivers. "Their products are an effective, reliable treatment option for patients seeking relief in innovative ways."
Organigram Holdings Inc. (OTCQX: OGRMF) (TSX-V: OGI) is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada. Organigram Holdings Inc. recently reported that it has reached – and already surpassed – the production of one million cannabis pre-rolls since the legalization of adult use recreational cannabis in October 2018. The Company credits the automation of its processes along with surging consumer demand for the success of its large-scale production. A national player in Canada's burgeoning cannabis industry, with supply agreements in every province except Quebec, Organigram has been able to identify opportunities for both production innovation and efficiencies to help ensure the Company delivers a consistent supply of high-quality products to customers across the country. "At Organigram, we are proud to be among a select group of licensed producers who have been able to rise to the challenge of large-scale pre-roll production," says Greg Engel, Chief Executive Officer, Organigram. "Our operations team has done an amazing job introducing automation to important parts of our process, building our overall capacity while retaining our focus on product quality."
HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO) is an award-winning consumer-packaged goods cannabis company that creates and distributes award-winning products to serve the global cannabis market. HEXO Corp. recently announced it has entered into a syndicated credit facility with Canadian Imperial Bank of Commerce, as Sole Bookrunner, Co-Lead Arranger and Administrative Agent and Bank of Montreal as Co-Lead Arranger and Syndication Agent. Under the terms of the credit facility, the Lenders will provide HEXO up to CAD 65 Million of secured debt financing at a rate of interest that is expected to average in the mid-to-high 5% per annum range over its three-year term. The credit facility consists of a CAD 50 Million term loan and a CAD 15 Million revolving loan, with an uncommitted option to increase the facility by up to CAD 135 Million, subject to the satisfaction of certain customary legal and business conditions. Both loans mature in 2022. HEXO may, at its discretion, repay the balance of the loans without penalty, at any time. The proceeds of the term loan will be used to partially fund the expansion of HEXO's Gatineau, Québec facility and leasehold improvements to its newly leased facility in Belleville, Ontario. The proceeds of the revolving loan will be used for general corporate purposes and working capital.
Aphria Inc. (NYSE: APHA) (TSX: APHA) is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Recently, Aphria Inc. completed its first transfer of plant cuttings from four of the Company's cannabis strains to Denmark-based Schroll Medical, as part of the Company's previously announced Strategic Partnership with Schroll. The shipment was completed under permits issued by the relevant health authorities, including an export permit from Health Canada, an import permit from the Danish Medicines Agency and a phytosanitary certificate from the Canadian Food Inspection Agency. "We are pleased to introduce the first four Aphria strains to be produced in Europe, through our strategic alliance with Schroll," said Hendrik Knopp, Managing Director of Aphria Germany, who is overseeing the Partnership on behalf of Aphria and Schroll. "This marks another important milestone for Aphria as we extend our leadership position in the European market, and it gives me joy to be able to say today that we literally have a good thing growing in Europe."
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