Consumers Begin to Crave Innovative CBD and Cannabis Products

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Consumers Begin to Crave Innovative CBD and Cannabis Products
FinancialBuzz.com News Commentary

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NEW YORK, May 22, 2019 /PRNewswire/ -- The alarming growth of health-related conditions has concerned the younger generation. Poor habitual lifestyle choices can lead to a variety of conditions such as obesity, heart disease, and diabetes. Now, consumers endeavor to transition towards healthier alternatives. According to a report by Nielsen, 83% of North Americans have changed their diet to a healthier option, while 74% more engaged in physical activity to lose weight. Consumers are participating in various diet plans or ingesting supplements for health and wellness benefits. Specifically, after the passage of the U.S. Farm Bill, CBD or cannabidiol-based products have begun trending within the health and wellness marketplace as extensive research has concluded that CBD can be used to treat health problems such as acne and anxiety. Furthermore, medical institutions have linked CBD to the successful treatment of chronic illnesses such as cancer, epilepsy, Alzheimer's, Parkinson's, and epilepsy. Primarily, consumer dabbling in the CBD industry are using full-spectrum oils, which are extracted from the hemp plant. Full-spectrum CBD oils contain many other cannabinoids, plant terpenes, vitamins and minerals that are beneficial to the consumer. Furthermore, the oils also contain all 20 essential amino acids, omega-3 fatty acids, B Complex vitamins, and vitamins A, E, and C, according to Terra Vida, a Colorado-based CBD retailer. Additionally, the oils also contain minerals such as calcium, iron, magnesium, potassium, zinc, and phosphorus. The therapeutic and health benefits associated with CBD have ultimately led the U.S. Food and Drug Administration to approve the first-ever cannabis-derived treatment, Epidiolex. Moreover, the U.S. Drug Enforcement Agency decided to delist CBD-based products from its standing as a Schedule 1 drug because it has been found that it does not provide consumers with psychoactive effects. Additionally, the development of the CBD industry is directly complementing the overall cannabis industry, further driving the global marketplace. According to data compiled by Mordor Intelligence, the global cannabis market was valued at USD 14.5 Billion in 2018. By 2024, the market is expected to reach USD 89.1 Billion while exhibiting a CAGR of 37% during the forecast period from 2019 to 2024. Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Tilray, Inc. (NASDAQ: TLRY), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO).

The expansion of the CBD industry has led major global corporation to begin distributing CBD products within their stores. Remarkably, companies such as Amazon, Walgreens, CVS, and Walmart have all begun selling hemp-derived CBD products. As a result, consumers in the North American region can easily find CBD products in their local convenience stores and pharmacies. Typically, brick-and-mortar retailers sell creams, topicals, and oils as opposed to selling traditional flower while many businesses are beginning to stray away from the flower business because of the declining trends. For instance, a recent study by Health Canada showed that cannabis oil sales were up near 56% over flower sales in 2018 and nearly 86% compared to 2017. Similarly, within the U.S., Colorado experienced its flower sales significantly fall since its legalization. In 2014, Colorado's flower sales accounted for 67% of all cannabis-related sales, however, four years later in 2018, flower sales accounted for 44% of total sales, according to BDS Analytics. During the same period, the concentrates market share closed the gap as it accounted for 15% of the market in 2014 to 31% by 2018. Even more recently, recreational markets like California also witnessed its flower sales decline. After California moved to legalize recreational use in 2016, during the first four months of legalization, California witnessed its flower market share fall from 43% to 40%, while concentrates rose from 30% to 31%. The data highlights that consumers are shifting from traditional cannabis products to new emerging products that are much more potent. "The increased legalization of cannabis worldwide has driven a corresponding growth in research and development. The industry has progressed from foundational products like marijuana flower, typically high in THC, the compound known for producing the "high," to derivative products such as vapes, edibles, and even hemp-based non-psychotropic CBD," said Andre Bourque, Vice President of Business Development for Verdantis Advisors. "More and more, formulation technologies, which serve as the bridge between the active components and the finished product, play an increasingly important role in cannabinoid product development. Proper formulation strategies lead to products with increased efficacy, better dose control, decreased variability, and increased patient acceptance and legal compliance."

Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV) is also listed on the TSX Venture Exchange under the ticker (TSX-V: RIV). Earlier yesterday, the Company announced that it is, "pleased to share that its portfolio company, Agripharm Corp. ("Agripharm"), has received its outdoor cultivation license from Health Canada. Agripharm will be growing its first outdoor crop this summer at its Creemore, Ontario location using award-winning genetics.

'We are pleased to see Agripharm diversify its operations and increase its growing capacity with the grant of this outdoor cultivation licence,' said Oliver Dufourmantelle, Chief Operating Officer of Canopy Rivers. 'Agripharm's outdoor production is ahead of the curve with support from Green House Brands, which provides decades of experience in choosing, and successfully growing, the best genetics for open-air crops.'

Founded in 2013, Agripharm is home to both the first cannabis production facility built from the ground up and the first supercritical Co2 extraction lab in Canada. Agripharm is located in Creemore, Ontario, and operates out of an indoor facility that has been licensed for cannabis production since 2014. Agripharm is co-owned by SLANG Worldwide Inc. ("SLANG Worldwide") (CNSX: SLNG), Canopy Growth Corporation (TSX: WEED, NYSE: CGC) and Green House Holdings North America Inc. and received a strategic investment from Canopy Rivers. Agripharm has the exclusive Canadian rights to the intellectual property, strains and brands of Green House Seed Co., the preeminent global provider of cannabis genetics, and its sister brand Strain Hunters. Agripharm is also the Canadian distributor of SLANG Worldwide's portfolio of leading U.S. consumer cannabis brands including, O.penVAPE, Bakked, District Edibles, and Magic Buzz.

'With access to strains optimized for outdoor production from the world's leading genetics portfolio, Agripharm is well-positioned to significantly increase its production capacity for extraction,' continued Dufourmantelle. 'Agripharm has robust internal extraction capabilities primed to bring SLANG Worldwide's most popular U.S. consumer brands to the Canadian cannabis market.'

As a strategic partner of Agripharm, Canopy Rivers provided the capital to finance the build-out of Agripharm's growing facilities in exchange for a long-term royalty interest subject to annual cash flow minimums. Canopy Rivers made its strategic investment in Agripharm in 2017, recognizing the strength of its extraction capabilities and its unique partnerships with Green House Seed Co. and SLANG Worldwide. For more information regarding the Company's investment in Agripharm, please refer to the joint management information circular of Canopy Rivers Corporation and the Company dated August 8, 2018, filed with Canadian securities regulators and available on the Company's profile on SEDAR at www.sedar.com.

About Canopy Rivers: Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers works collaboratively with Canopy Growth Corporation (TSX: WEED, NYSE: CGC) to identify strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem."

For our latest "Buzz on the Street" Show featuring Canopy Rivers Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=H9kciNx3qws

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. Canopy Growth Corporation recently announced that it had completed an all-cash acquisition of Spain-based licensed cannabis producer Cáñamo y Fibras Naturales, S.L. The acquisition lays the foundation for Canopy Growth to expand its European production footprint into one of the most ideal growing regions in the world, complementing the Company's existing 430,000 sq. ft. licensed production site in Odense, Denmark, as well as its world-class ISO 13485 internationally certified Storz and Bickel facility in Tütlingen, Germany. Cafina is one of three companies in Spain authorized to cultivate, distribute and export cannabis containing more than 0.2% of tetrahydrocannabinol (THC) for medicinal and research purposes, and does so today in a 1,600 sq. ft. greenhouse. It is also licensed to conduct hemp cultivation. With this acquisition and a planned corresponding expansion in Spain, Canopy Growth improves its long-term positioning to address demand across Europe for medical cannabis and CBD products. Canopy Growth is also partnered with a second licensed producer in Spain that produces cannabis flowers for the Company under an existing supply arrangement. "Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints," commented Mark Zekulin, President & Co-Chief Executive Officer, Canopy Growth. "This strategic acquisition in a scalable, low-cost production environment diversifies our owned production capabilities in Europe, similar to our approach in Canada where we have production facilities in seven different provinces. Adding Cafina will allow us to quickly build out our presence in Spain using its existing cultivation licence as a launch pad, while ensuring our Canadian footprint – the largest in the world – can continue to serve the medical and recreational needs of Canadians.'

Tilray, Inc. (NASDAQ: TLRY) is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids currently serving tens of thousands of patients and consumers in twelve countries spanning five continents. Tilray, Inc. recently announced it has entered into a definitive agreement pursuant to which Tilray will acquire all of the issued and outstanding securities of FHF Holdings Ltd., from Compass Group Diversified Holdings, LLC and other shareholders of Manitoba Harvest. Under the terms of the Agreement, Tilray will acquire Manitoba Harvest on a cash and debt-free basis, for an aggregate purchase price, including cash and class 2 Common Stock in the capital of Tilray , of up to CAD 419 Million pending the achievement of certain milestones after the closing of the Transaction. Together, Tilray and Manitoba Harvest plan to grow both companies' revenue while bringing nutritious hemp foods and supplements to more households across the U.S. and Canada. The acquisition will expand Tilray's product portfolio into the natural foods category and bring Manitoba Harvest expertise in working with cannabinoids, including cannabidiol (CBD). By leveraging Manitoba Harvest's established distribution network, Tilray plans to accelerate its expansion into the U.S. and Canadian markets, where legal, for CBD products. Manitoba Harvest also brings to Tilray an experienced team and manufacturing capabilities, including the addition of two high quality BRC AA+ certified manufacturing facilities as well as significant sales and distribution capabilities.

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000 kg of cannabis 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. and Radient Technologies Inc. (TSX-V: RTI) (OTCQX: RDDTF), recently announced that Aurora had taken delivery of Radient's first commercial batch of finished cannabis derivatives, from Radient's proprietary extraction platform. With this first batch, Radient has proven its enhanced ability to produce cannabinoid derivatives at commercial scale, and will continue to scale up production at Radient's cannabis facility in Edmonton, reaching an expected eventual annual throughput of approximately 300,000 kg of cannabis biomass at this single location. The partnership between Radient and Aurora was established in 2017 after the completion of a Research Joint Venture that validated Radient's MAPTM extraction technology was capable of superior cannabinoid extraction at a commercial scale. For Aurora, the relationship with Radient forms an important component of its derivative product strategy, providing a greater return on the biomass allocated for extraction, favorable cost advantages, and significantly increased extraction capacity. "Aurora recognized early that high-throughput, high-quality extraction technologies would be a competitive advantage in a rapidly developing cannabis industry," said Terry Booth, Chief Executive Officer of Aurora. "Our investment will begin to pay dividends with Radient achieving fully licensed, commercial status. Once scaled up, the addition of Radient's technology will significantly increase our ability to deliver high-value cannabis products at scale, complementing our existing internal extraction capabilities, which will support a full suite of derivative products."  

HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO) is an award-winning consumer packaged goods cannabis company that creates and distributes prize-winning products to serve the global cannabis market. HEXO Corp. recently completed the first harvest in its 1 million sq. ft. expansion, marking an important execution milestone in the Company's continuous growth. Since early January, plants have been moving into the greenhouse and the first plants have now been harvested. The Company continues to ramp up to full harvest capacity using the continuous harvest methodology, the latest step towards reaching the full annual production capacity of 108,000 kg of dried flower per year. HEXO Corp's headcount now exceeds 600 employees. The Company expects to hire another 500 employees in the coming months; 300 additional position at its campus in Gatineau, Quebec, and 200 in its Belleville, Toronto and Montreal locations. "Completing the first harvest in our 1,000,000 sq. ft. greenhouse expansion showcases the dedication and hard work of the entire HEXO team," said Sébastien St-Louis, HEXO's Chief Executive Officer and Co-Founder. "We are very proud of our continued ability to execute on our plans, creating value for our shareholders and demonstrating our commitment to our customers. This cultivation milestone means that an expanded HEXO product offering will be available to more Canadians shortly."

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