Cannabis Cultivators Reap Benefits of Widespread Legalization Campaigns

FinancialBuzz.com News Commentary

NEW YORK, April 21, 2020 /PRNewswire/ -- Over the past several decades, researchers have discovered that hemp can offer consumers several therapeutic benefits. More recently, they have meaningfully emphasized that hemp's chemical compound, CBD or cannabidiol can be used in the healthcare industry. CBD is just one of the 113 cannabinoids found within the cannabis plant. Similarly, THC or tetrahydrocannabinol is also a cannabinoid within the cannabis plant, however, THC and CBD are widely different in their biological makeup. While THC is known to induce mind-altering effects, CBD is known for its rather relaxing and therapeutic effect on the user. As a result of this fresh understanding, U.S. federal regulators decided to pass the Farm Bill which legalized hemp in late 2018. The 2018 Farm Bill, however, explicitly preserved the FDA's authority to regulate products containing cannabis, or cannabis-derived compounds, under the FD&C Act and section 351 of the Public Health Service Act (PHS Act). This leaves a lot of uncertainties regarding which products can be sold legally. Yet, despite these uncertainties, numerous types of infused cannabis products are now available in the market including food, dog treats, beverages, beauty products, and even bedding now feature cannabis in their marketing. And, according to New Frontier Data estimates, 2020 retail sales of such high-THC marijuana and low-THC/high-CBD formulations will represent a nearly USD 3 Billion retail market in the U.S. Transcanna Holdings Inc. (OTC: TCNAF) (CSE: TCAN), Aphria Inc. (NYSE: APHA) (TSX: APHA), Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), Planet 13 Holdings Inc. (OTC: PLNHF) (CSE: PLTH), Neptune Wellness Solutions Inc. (NASDAQ: NEPT)

The federal regulatory uncertainties did not stop investors, innovators, farmers and aspiring business owners from continuing to take risks in the industry. And states that have legalized cannabis for medical or recreational purposes continue to report demand - at least 70% of the 2019 U.S. hemp harvest is intended for extract production, with Colorado leading the nation in hemp cultivation and processing land area with over 80,000 acres reported. "The 29 U.S. states reporting licensed hemp cultivation acreage total almost half a million acres in combined cultivation land area, which is a massive increase compared to 2018 figures of a total land area barely over 100,000 acres. While there continues to be uncertainty and a healthy amount of confusion around hemp cultivation for CBD production, it is clear that demand is nonetheless continuing to rise across the U.S.," noted Giadha Aguirre de Carcer, New Frontier Data CEO and Founder. "As states issue more licenses, consumer demand increases, and mass-market retailers such as CVS and Walgreens continue to expand their own product offerings, we expect the FDA may be forced to provide further regulatory clarifications sooner rather than later."

Transcanna Holdings Inc. (OTC: TCNAF) (CSE: TCAN) just announced breaking cannabis news that, "Lyfted Farms has been engaged by Central Valley Growers to Operate a Commercial Cannabis Greenhouse Facility located in Stanislaus County. Lyfted Farm's 'Higher Standard Farm Management Agreement' includes the provision of genetic stock, crop cultivation, labor, compliance oversight, and distribution of finished product over an initial 5-year term to commence May 1st, 2020, with two 5-year options to extend. Under this agreement, Lyfted Farms will receive a base fee with an incentive fee of all budgeted net proceeds.

"In building our company, we have committed to setting a 'Higher Standard of Growing' for our industry. We keep this in mind in all that we do but especially in selecting our employees, executive team members, and business partners. Endeavoring to dispel the lingering stigma around the cannabis industry serves as part of the impetus that drives us to set this standard. Thus far we have been successful in doing so, as reflected in our unwavering regulatory compliance, a track record of safe, successful operations, and impeccable performance under numerous Development Agreements in Stanislaus County over the last two years. We continue to raise this standard in formally establishing our relationship with Central Valley Growers, which is owned by a Central Valley family with a 25 year legacy in traditional agriculture", commented Bob Blink, President and CEO of TransCanna.

"Central Valley Growers could not be more excited to partner with an industry leading cannabis operation such as Lyfted Farms.  Our longstanding relationship with CEO Bob Blink makes us confident in both Lyfted Farms' future success as well our strong belief that Lyfted Farms will always have the community of Stanislaus and its constituents top of mind in conducting our operations", commented Nav Athwal, General Manager, Central Valley Growers.

About TransCanna Holdings Inc.   TransCanna is a California-based, Canadian-listed company building cannabis focused brands for the California lifestyle, through its wholly-owned California subsidiaries."

Aphria Inc. (NYSE: APHA) (TSX: APHA) announced last year it has received a cultivation licence from Health Canada for Aphria Diamond, the Company's second Leamington, Ontario cannabis greenhouse facility, bringing an additional 1,300,000 square feet of production space with an annual growing capacity of 140,000kg. Combined with the Company's Aphria One facility and its subsidiary Broken Coast Cannabis, the Company now has more than 2,400,000 square feet of cultivation space capable of reaching a total annualized production capacity of 255,000kg.  "We are extremely pleased to receive the licence for our long-awaited Aphria Diamond facility, which more than doubles our Canadian production capacity," said Irwin D. Simon. "Reaching industry-leading production levels coinciding with the expansion into new categories and new opportunities for cannabis in Canada and around the world is a transformative moment for Aphria Inc."

Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), the parent company of Organigram Inc., a leading licensed producer of cannabis, announced last month that the Company has received Health Canada's approval for the licensing of the remainder of its Phase 5 expansion together with the renewal of its licenses for standard cultivation, standard processing and sale for medical purposes under the Cannabis Regulations. The renewed and expanded licenses are effective as of March 20, 2020.  The terms of the licenses include approval of a two-floor production facility designed to support all processing activity as well as dedicated spaces for packaging of flower, pre-rolls, vape pens and powdered beverages.  The Phase 5 expansion also includes a new extraction facility with increased capacity for CO2 extraction, and winterization as well as new capabilities designed for future product development.

Planet 13 Holdings Inc. (OTCQX: PLNHF) (CSE: PLTH), a leading vertically-integrated Nevada cannabis company, announced on March 11th, that their brands, HaHa Gummies, Dreamland Chocolates, TRENDI, Leaf & Vine, and Medizin, set a record of ~$1 million in combined sales in February.  Larry Scheffler, Co-CEO said, "Our customers have a unique connection to our products, they watch as Dreamland Chocolates are poured in front of them, as Haha Gummies are molded. Customers understand that our products are made with absolute attention to detail by people who share the same enthusiasm for cannabis as they do. This unique experience combined with our award-winning packaging1, and a product that meets the brand promise of a great tasting uplifting experience results in a product that flies off the shelf."

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) announced last November that it had entered into a collaboration agreement with International Flavors & Fragrances Inc. to co-develop hemp-derived CBD products for the mass retail and health & wellness markets. App Connect Service, Inc. is also a party to the agreement to provide related branding strategies and promotional activities. In conjunction with the co-development partnership, Neptune will issue to warrants(1) to IFF. "The agreement represents a significant event in the development of our global cannabis business, expanding our business model from primarily B2B to include a robust B2C business platform. IFF has an impressive track record, remarkable capabilities and global reach. This partnership will accelerate Neptune's vision and growth strategy to be the leading producer of hemp extracts ingredients and finished products for the global health & wellness and Consumer Packaged Goods industries. We are also now better positioned to leverage our management's experience building brands and relationships with key North American retailers," stated Michael Cammarata, CEO of Neptune.

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