Analysts Projected Numbers Differ on Revenue Potentials but Agree on Continued Growth in CBD Products Market

Financialnewsmedia.com News Commentary

PALM BEACH, Florida, July 24, 2019 /PRNewswire/ -- Almost everyone has heard the term "CBD", even people who have never smoked recreational marijuana or have received a medical marijuana prescription, or even those who are not actively following the U.S. stock markets CBD is everywhere! In a recent report on this phenomenon BDS Analytics said: "Whether or not you keep up with the cannabis industry, you've likely heard the term "CBD" recently. Seemingly overnight, CBD is appearing everywhere from beauty product lines to burger joints. As it turns out, there's legitimate reasoning behind "today's" latest hype. The recent rise in use and popularity can be primarily attributed to the onset of cannabis legalization across the United States, and most recently, the passage of the 2018 Farm Bill. According to the newest service offered by BDS Analytics, CBD Market Monitor, U.S. sales of cannabis- and hemp-derived CBD products are expected to surge to $20 billion by 2024. With sales of only $1.9 billion in 2018, the forecasted 49% compound annual growth rate (CAGR) through 2024 is staggering. Active companies in the industry making moves to ready that include:  OrganiGram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI), IONIC Brands Corp., (OTC: IONKF) (CSE: IONC), Plus Products Inc. (OTCQB: PLPRF) (CSE: PLUS), Planet 13 Holdings Inc. (OTCQX: PLNHF) (CSE: PLTH), Cresco Labs Inc. (OTCQX: CRLBF) (CES: CL).

However, another well respected industry resource, has an even higher projected revenue for this same industry. Brightfield predicted the hemp-derived CBD products market at about $591 million in 2018, growing to $22 billion by 2022. It predicts a higher amount earlier than the BDS review. Brightfield's report stated: "CBD is growing faster than cannabis in the U.S. and will soon be a $22 billion industry. It has been flying under the radar but is set to explode having profound impacts on CPG and Pharma."

IONIC Brands Corp., (CSE: IONC) (OTC: IONKF) BREAKING NEWS: IONIC Brands is pleased to announce that it has completed the acquisition of Natural Extractions, Inc. d/b/a Zoots Premium Cannabis Infused Edibles ("Zoots"), based in Washington, USA, as previously announced on April 23, 2019.

Total consideration for the purchase of Zoots is approximately US$11 million, comprised of US$855,000 cash and issuance of 9,635,150 common shares ("Consideration Shares") of the Company at a deemed value of C$1.30 per share to the vendors of Zoots ("Vendors"), and the assumption of US$606,420 in outstanding debt. The Vendors have also agreed to a lock-up agreement whereby up to 70% of the Consideration Shares would be locked up and released over nine months. The issuance of shares is subject to approval by the Board and CSE.

In addition, the Company will issue up to 4.8 million common share purchase warrants to the shareholders of Zoots, with an exercise price of C$1.33 per share, exercisable over three years.

The acquisition adds Zoots' edibles and infused products to the Company's portfolio of consumer-focused cannabis concentrates. Zoots products expands the Company's current product line and is expected to increase the Company's market share in the cannabis retail and wholesale industry. Zoots is a state-of-the-art, Washington State-based, cannabinoid edibles company, a first major player in the cannabis-infused edibles market. Zoots' product line includes drops, gummies, energy shots and hard candies manufactured to offer consistent and reliable dosing. Zoots is forecasting total revenues in 2019 to be approximately US$3.0 million with US$360,000 EBITDA cash flow. Zoots has consumer proven formulas which will be preserved by IONIC BRANDS.

Zoots Premium Cannabis Infused Edibles are available at licensed marijuana retailers in Illinois, Washington, Colorado and Massachusetts. Founded by brothers Dan, Michael and Patrick Devlin, Zoots products feature cannabis oil derived from the Zoot's proprietary Cypress Extraction^TM system and blended with other premium ingredients to deliver a safe, reliable and pleasant experience. Zoots emphasizes on product safety, quality and consistency, and offers products in serving sizes as low as 5 mg THC enabling the consumer to easily manage dosage and control over serving size and effect. As part of the integration of Zoots into the Company's operations, "Both Ionic and Zoots are trusted, family-run businesses and cannabis industry front-runners," said Zoots' Co-Founder, Patrick Devlin. "Zoots and Ionic target consumers looking for an easy and intuitive way to consume cannabis. Edibles are quickly gaining in popularity worldwide and we provide highly desired cannabis consumption options." Read this entire announcement for IONC at: https://www.financialnewsmedia.com/news-ionc/ 

Additional industry related developments from around the markets: 

OrganiGram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI) recently announced its results for the third quarter ended May 31, 2019 ("Q3" or "Q3 2019").

"We continued to report strong sales in our third quarter and now have distribution in all ten provinces. In our fiscal year to date, we have generated strong operating and financial results, placing us among the leaders in the Canadian industry. While we saw a temporary reduction in yield per plant in Q3 due to temporary changes in growing protocols, not only have our yields returned to historical levels, but we have seen a meaningful increase in average cannabinoid levels in harvests to date in Q4" said Greg Engel, Chief Executive Officer.

Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) recently announced a new look for its line of low dose cannabis infused edibles. The rebrand was guided by market structure research from Henry J. Rak Associates and designed by Partners & Spade, an agency that has worked alongside brands including Peloton and Warby Parker.

PLUS has already seen success in California with the #1 and #2 best selling cannabis products over the last twelve months, both by number of units sold and dollars of retail sales according to BDS

Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) recently announced the appointment of Adrienne O'Neal to Planet 13's Board of Directors and grant of Restricted Stock Units ("RSU") to certain of its directors, employees and independent contractors.

"As the cannabis industry matures there is a greater need for cannabis companies to take a leading role in their communities, contributing to the financial, societal and cultural welfare of their community," said Bob Groesbeck, Co-CEO of Planet 13. "We are pleased to add Adrienne O'Neal to our board, her work in Nevada has been exemplary and we are confident her experience will help ensure Planet 13 is a positive addition to any community."

Cresco Labs Inc. (CSE: CL.CN) (OTCQX: CRLBF) recently announced that Angie Demchenko has joined the Company as its first Chief People Officer. Ms. Demchenko most recently served as Vice President, Head of Human Resources for Starwood Retail Partners, a leading operator of shopping malls and lifestyle centers. As Cresco Labs' Chief People Officer, Ms. Demchenko will be responsible for performance management, recruitment, compensation and employee benefits, etc.

"Angie has an impressive track record of managing the human resources functions of dynamic, high-growth companies," said Cresco Labs CEO & Co-Founder Charlie Bachtell. "Her experience in building best-in-class HR strategies and operations will be valuable in helping Cresco maintain our strong workplace culture and our focus on our core values and mission as we continue to scale. We believe that Angie is exceptionally well suited to help us achieve our goal of attracting the best talent in the cannabis industry and empowering them with the tools and knowledge to deliver exceptional performance."

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