Various Regions Delve Into Cannabis as the Market Spreads Globally

Various Regions Delve Into Cannabis as the Market Spreads Globally

PR Newswire

NEW YORK, April 11, 2019

FinancialBuzz.com News Commentary

NEW YORK, April 11, 2019 /PRNewswire/ --Over a dozen countries have legalized cannabis for medicinal purposes while others have also decriminalized it, allowing for moderate personal consumption. Primarily, countries in the Latin American and European regions are largely leveraging cannabis in order to treat certain medical applications. However, the U.S. represents the largest cannabis market despite not having legalized cannabis on a federal level for either recreational or medical purposes. Yet, more than half of U.S. states have already moved to legalize medical cannabis under state jurisdiction, circumventing the lack of federal approval. Moreover, about a fifth of the U.S. has legalized the recreational use of cannabis. Nevertheless, the industry's growth is currently heavily hindered by the lack of large-scale clinical trials and studies. The main reason why cannabis hasn't been studied on a large-scale is that it is classified as a Schedule 1 drug under international regulations, meaning it is one of the most heavily regulated drugs in the world. Despite cannabis' classification, countries across the world have acknowledged the therapeutic benefits of the plant and have adopted various medicinal legislation. Countries to have legalized medical cannabis include Argentina, Australia, Canada, Colombia, Germany, Israel, and Mexico. Additionally, there are a handful of countries that have legalized medical cannabis in certain regions or are undergoing the process to legalize it. Furthermore, countries such as the U.S. and India have allowed medical use in specific regions, while the Philippines is also exploring opportunities within the industry. According to data compiled by MarketsandMarkets, the global cannabis market was valued at USD 10.3 Billion in 2018. By 2023, the market is expected to reach USD 39.4 Billion, while registering a CAGR of 30.7% during the forecast period. WeedMD Inc. (OTC: WDDMF) (TSX-V: WMD), Innovative Industrial Properties, Inc. (NYSE: IIPR), Charlotte's Web Holdings, Inc. (OTC: CWBHF) (CSE: CWEB), Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB)

The U.S., in particular, has made major movements within the medical cannabis market. Under federal regulatory laws, cannabis is still considered a Schedule 1 drug within the U.S. However, the U.S. Drug Enforcement Agency has delisted CBD, a cannabis derivative, and reclassified it as a Schedule 5. Furthermore, research has concluded that CBD is the non-psychoactive derivative of hemp, which also falls under the cannabis family. While CBD has a different biological makeup from its counterpart, THC, the two offer similar therapeutic effects. The U.S. Food and Drug Administration approved its first CBD-based drug last year, which is intended to treat two rare forms of epilepsy in children: Dravet syndrome and Lennox-Gastaut syndrome. However, the DEA still believes that THC can be addictive and abused, which is why regulations regarding the overall plant haven't yet been reclassified. On the other hand, cannabis advocacy has been growing exponentially each year: In 2018, 61% of Americans supported the legalization of cannabis, up from 57% two years ago, according to General Social Survey. Furthermore, 54% of Republicans and 76% of Democrats support the federal legalization of cannabis. The growing support between citizens and government officials can ultimately lead to the end of the cannabis prohibition era. "Never in modern history has there existed greater public support for ending the nation's nearly century-long experiment with marijuana prohibition," said Justin Strekal, Political Director, NORML.

WeedMD Inc. (OTCQX: WDDMF) (TSX-V: WMD) is also listed on the TSX Venture Exchange under the ticker (TSX-V: WMD). Yesterday, the Company announced that, "it has closed on the purchase of an additional 60 acres of prime land located directly adjacent to its 98-acre Strathroy property. WeedMD's outdoor grow now has the potential to increase to more than 100 acres. As previously announced, 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. Link to release here. An additional 25 acres had previously been planned to come online as Phase II in 2020. With today's announcement, Phase II will increase to 75 acres for an overall outdoor cultivation of 100 acres online by 2020.

Pending Health Canada approval, WeedMD's outdoor grow is expected to increase its total yield to more than 100,000 kgs of cannabis in 2020 and more than 150,000 kgs when combined with its greenhouse cultivation. Outdoor grow video here. https://www.youtube.com/watch?v=QnApYAnXDtw

"With the amalgamation of this property and our existing licensed footprint, we now own more than 160 acres of contiguous land in Strathroy – that's 100 adjoining acres of prime workable agricultural land for outdoor cultivation. WeedMD is well-positioned to be the industry leader setting the benchmark for low-cost, scalable, quality-driven outdoor production in Canada," said Keith Merker, CEO of WeedMD. "As one of the first out of the gate, our experienced cultivation team has started onsite preparedness with ready-tested genetics and clones being propagated at our state-of-the-art greenhouse. The ability to produce consistent strains for dried flower, extracts and concentrates at a fraction of the cost of other production platforms will give us a strategic edge as we expand our product lines and commercial reach with our first outdoor harvest expected in fall 2019."

"Our Strathroy property was strategically selected in 2017 for its modern greenhouse and future growth potential. The vast outdoor property has full sunlight, an abundance of air flow, a protective buffer zone of trees and proximity to our infrastructure and propagation operations at the greenhouse. We have now capitalized on the opportunity to expand across perfectly-maintained adjacent lands already primed for outdoor cultivation - all of which can now be easily folded into our licensed property," said Derek Pedro, Chief Cannabis Officer of WeedMD. "With the purchase of the adjacent 60 acres of land for outdoor grow, we're well on our way to rapidly scaling production, with Phase II bringing us to full capacity in 2020."

For more information, access WeedMD's investor presentation here and recently updated corporate video here.

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 in Strathroy, Ontario. The Company currently has 136,000 square feet of licensed production space 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 our latest "Buzz on the Street" Show featuring WeedMD Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=5Ye5zahoypA

Innovative Industrial Properties, Inc. (NYSE: IIPR) is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. recently announced that it had closed on the acquisition of a property in Barry, Illinois, which comprises approximately 75,000 sq. ft. of industrial space situated on approximately ten acres. The purchase price for the property was USD 19 Million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with a wholly owned subsidiary of Ascend Wellness Holdings, LLC (Ascend), which intends to operate the property as a medical-use cannabis cultivation and processing facility in accordance with Illinois medical-use cannabis regulations. Ascend is expected to complete additional tenant improvements for the building, for which IIP has agreed to provide reimbursement of up to USD 6 Million. Assuming full reimbursement for the tenant improvements, IIP's total investment in the property will be USD 25 Million. As the pioneering real estate investment trust (REIT) for the medical-use cannabis industry, IIP partners with experienced medical-use cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions. "We are very pleased to close on this transaction with Ascend in Illinois, marking our ninth state where we own properties," said Paul Smithers, President and Chief Executive Officer of Innovative Industrial Properties, Inc. "We look forward to supporting Ascend as their long-term real estate partner, as they launch and continue to expand their operations in a number of states to meet the tremendous demand for patient treatment."

Charlotte's Web Holdings, Inc. (OTCQX: CWBHF) (CSE: CWEB) is the market leader in the production and distribution of innovative hemp-based cannabidiol wellness products. Charlotte's Web Holdings, Inc. recently reported its 2018 harvested hemp results. The Company reported more than a 10 times growth in harvested hemp compared to its 2017 grow season. The high-quality 100% U.S.-grown hemp will be processed through proprietary extraction methods to create whole plant hemp extract that will be used in Charlotte's Web products for sale in 2019 and 2020. "Charlotte's Web is one of only a few hemp CBD producers capable of supplying large volumes of high-quality hemp extract from its own supply chain that can meet significantly increasing market demand," said Hess Moallem, President and Chief Executive Officer of Charlotte's Web. "As the category and brand leader, our goal is to increase our market share and with this bountiful harvest we are able to satisfy our customer demands for 2019 and beyond. This incredible harvest ensures we can continue to produce our high-quality human nutrition products without being subject to constantly fluctuating market prices as is common with third-party sourced raw material. This allows us to have better control and predictability over our cost of goods sold and thereby our gross margins. In addition, these harvest levels will allow us to explore opportunities to supply future partners with our proprietary hemp extracts."

Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF) is one of the largest and longest-operating vertically integrated greenhouse growers in North America and the only publicly traded greenhouse produce company in Canada. Recently, Village Farms International, Inc. applauded the actions of the Texas Department of Health and Human Services in descheduling hemp, including its cannabinoids (except for delta-9 tetrahydrocannabinol (THC)) in compliance with the 2018 Farm Act and Texas law. Under Texas law, the removal of hemp from the controlled substances schedule will be effective on April 5, 2019, 21 days after the schedule's publication. Texas still must pass a hemp bill to enable the creation of a State Hemp Plan under the 2018 Farm Act and develop a thoughtful regulatory regime to support the hemp industry and protect consumers. Village Farms plans to commence hemp cultivation in a portion of its Monahans, Texas, greenhouse operation upon a State Hemp Plan in Texas becoming effective, or earlier if permitted by Texas law. In anticipation of the Texas legislation passing, Village Farms has begun design and development of the site-specific growing and technical systems to enable hemp production at the Monahans facility. "The descheduling of hemp in Texas is a very encouraging step forward and we would like to publicly acknowledge the efforts of all those working in support of the full legalization of hemp in Texas with thanks in particular to lobbyist Susan Hays and the U.S. Hemp Roundtable," said Michael DeGiglio, Chief Executive Officer, Village Farms. "We look forward to the opportunity to work with officials in Texas toward a roll out of hemp production, including the processing and sale of CBD products."

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 500,000kg 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 that the Company has been selected by the German Bundesinstitut für Arzneimittel und Medizinprodukte BfArM (Federal Institute for Drugs and Medical Devices) as one of three winners in the public tender to cultivate and distribute medical cannabis in Germany. The contract will be formalized at the earliest on April 17, 2019, pending the outcome of an appeal procedure on which a ruling is anticipated by April 10, 2019. The tender saw 79 companies participating, with the winners able to establish production in Germany upon the completion of the contract associated with the tender. The selection process was based on the submission of a concept for domestic cannabis production, delivery and pricing. Aurora's concept, judged on criteria such as facility design, quality, security and logistics, received the highest ranking out of all concepts submitted, validating the Company's leadership in integrated cultivation, production and delivery. The Company was awarded the maximum number of 5 of the 13 lots in the tender over a period of four years with a minimum supply of 4000kg total. The cannabis produced will be sold to the German government and supplied to wholesalers for distribution to pharmacies. "We are very proud to have been selected as one of only three companies by the German government, which is a great achievement by our team," said Neil Belot, Chief Global Business Development Officer. "Having the highest rated concept is a strong validation of the Aurora Standard cultivation philosophy, as well as of our track record in the delivery of safe and high-quality medical cannabis products to the German system. We commenced delivering dried cannabis flower from Canada to the German market in 2017, and recently added cannabis extracts to our offerings for German patients.  Winning the tender reflects a natural evolution for Aurora, establishing a more prominent local footprint in this important international market with over 82 million people."

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