Cannabis Sales Surge During Lock Down

DENVER, June 24, 2020 /PRNewswire/ --  COVID-19 devastated the economy but created a surge in cannabis sales, bolstering long-term trends.  As the pandemic wreaked havoc on the U.S. and global economies, cannabis sales rocketed higher across multiple markets in North America. California cannabis sales soared nearly 160% compared to the same day in March 2019, while sales in Washington climbed 100% and Colorado saw a 46% increase on the same day. This surge gives no indications as a one off and is strong reinforcement of long-term trends in the industry. After a lot of early hype, the cannabis sector is on firm ground and is posting impressive numbers. A strong performer in the sector, Cannabis Strategic Ventures (OTCQB: NUGS) (NUGS Profile), is now on pace for over $2.7 million in quarterly sales and approximately $11 million in annualized sales, based on its strong performance in April and May. Simultaneously, the company increased its harvest size by as much as 2.5x and is now selling product at an 11% premium to industry standard. Powerful new deals confirm sector viability and vitality.  Village Farms International Inc. (NASDAQ: VFF), one of North America's largest vertically integrated greenhouse growers, recently launched a majority-owned joint venture for a large-scale, low-cost, high-quality cannabis production. HEXO Corp. (NYSE: HEXO), an established consumer packaged goods cannabis company, just closed a public offering for total gross proceeds of C$57,546,000. Amyris Inc. (NASDAQ: AMRS), a global science and technology leader of pure, sustainable ingredients for consumer products, just announced a major breakthrough in CBD delivery, improving efficacy of CBD by 10-40X as the carrier oil chassis for the skin care market. Tilray Inc. (NASDAQ: TLRY) a global leader in cannabis research, cultivation, processing, and distribution announced a C$90.4 million registered offering. The surge in cannabis sales during lockdown only adds to a sector that is thriving.

Click here to view the custom infographic of the Cannabis Strategic Ventures (OTCQB: NUGS) editorial.

Pandemic's Unexpected Windfalls

COVID-19 has had a crippling effect on many industries. Shops and restaurants forced to close, manufacturers unable to operate their plants, companies across the manufacturing and service sectors seeing demand plummet. The layoffs and losses are very real, and no one knows yet what the long-term economic impact will be.

But some businesses actually benefited from the economic disruption the pandemic has wrought. There are obvious ones like pharmaceutical companies and those producing protective equipment for medical staff. There are the tech businesses that facilitate working from home, providing software for virtual workspaces and online meetings. And there has been a huge increased demand for home entertainment, which has spilled over into a less obvious sector – cannabis producers such as Cannabis Strategic Ventures (OTCQB: NUGS) (NUGS Profile).

COVID Lends Cannabis a Lift

Cannabis was already a boom industry in North America. This has been driven by a range of recent changes, such as recreational legalization in Canada, federal legalization of hemp in the US, and the repeal of prohibition across a growing number of states. This has allowed the growth of companies such as Cannabis Strategic Ventures, which cater to a growing market as customers move from criminal supply channels to legal ones.

Demand exploded during the early stages of COVID-19's spread through North America. According to the Bank of America Securities, there were record sales of cannabis as consumers stockpiled, preparing for a lockdown. While some people bought mountains of toilet paper or tinned food, both medical and recreational cannabis users were making sure they had enough to see them through a crisis.

The result was a spike in sales in April and May, to the benefit of companies with recognizable quality brands such as Cannabis Strategic Ventures. Sales could have been stymied as states locked down and restricted business to control the spread of COVID-19. But most states classified cannabis as an essential product, allowing sales to continue even as other parts of the economy were shutting down.

Together, these factors led to record sales for some cannabis companies, with Cannabis Strategic Ventures celebrating increased sales of cannabis product from its core cultivation facility and adding staff to address the rising demand.

Strong Contender Seizes Market Opportunity

These sales marked an extraordinary month for NUGS. Despite restrictions on business due to COVID-19, the company had record-breaking sales in the final week of April, putting monthly sales 800% higher than the monthly average for Q1.

Any fears that this might be a blip caused by panic buying at the start of the pandemic vanished the following month, when the company announced sales from its most recent harvest. With cannabis sales in the US average roughly $1,525 per pound, the company sold its product at around $1,700 per pound, 11% above benchmark levels. This was a particularly impressive price given that it had been selling at a discount relative to the benchmark only six months before.

Of course, not all cannabis companies will benefit from the crisis. Their ability to profit depends in large part on the strength of their existing business. NUGS had been building up its business prior to the crisis, with the addition of a six-acre cultivation site in 2019, capable of four or five harvests per year.

Seizing the market opportunity brought by COVID-19, the company has announced further improvements in the first half of 2020. Work on both the quantity and the quality of output has more than doubled the output of cultivation facilities while supporting rising prices for its products.

Cannabis Industry Evolves

The long-term expansion of legal markets has led to dramatic growth for cannabis companies over the past decade, and the COVID-19-related influx of revenues provides well-run businesses the resources they need for further expansion. Late April and early May saw Cannabis Strategic Ventures sell out its entire stock every week for a month.

"We have never seen anything like this," said Cannabis Strategic Ventures CEO Simon Yu. "We booked $100,000 in one day to clear out all of our remaining inventory. We anticipated this dynamic but still underestimated the force of the trend. Too much demand is always the problem you want to have."

NUGS sold $929,000 of cannabis products in May and expects to see even greater sales in June. Expanded inventory and product range have supported this growth even in a time of crisis, while reinvestment from that growth will let the company further expand its capacity.

Part of the sector's success comes from producing a varied range of brands and products. Rather than just selling weed, the more successful companies have been developing a variety of cannabis derivatives for different markets. While the recent boom in sales has come from demand for cannabis itself, related brands have diverse interests in supporting long-term growth of the market, normalizing cannabis and its derivatives as consumer products, and protecting companies against a disruption in any individual part of the market.

Cannabis Players Execute on Varied Strategies

The boom in sales brought about by the COVID-19 crisis has created an opportunity for a range of growing companies.

Village Farms International Inc. (NASDAQ: VFF) is one of the largest and longest-operating vertically integrated greenhouse growers in North America. The company announced that its majority-owned joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms, has received from Health Canada its cannabis cultivation sales license based on an initial production area within its second 1.1 million square foot greenhouse facility in Delta, British Columbia.

HEXO Corp. (NYSE: HEXO) is an award-winning consumer packaged goods cannabis company that creates and distributes innovative products to serve the global cannabis market. The company serves the Canadian adult-use markets under its HEXO Cannabis and Up Cannabis brands, and the medical market under HEXO medical cannabis. The company recently closed a public offering for total gross proceeds to the company of C$57,546,000,

Amyris Inc. (NASDAQ: AMRS) is a global science and technology leader of pure, sustainable ingredients for the Health & Wellness, Clean Beauty and Flavors & Fragrances markets. The company recently presented clinical data showcasing the superiority of its natural sugarcane squalane (marketed and sold as Neossance Squalane) as a carrier of CBD versus other oils. In order for CBD to be effective in topical applications, skin penetration is a key factor. Amyris sugarcane squalane improves the efficacy of CBD by 10-40X as the carrier oil chassis for the skin care market based on new data.

Tilray Inc. (NASDAQ: TLRY) is a global leader in cannabis research, cultivation, processing and distribution. An industry pioneer, Tilray was the first GMP-certified medical cannabis producer to supply cannabis flower and extract products to tens of thousands of patients, physicians, pharmacies, hospitals, governments, and researchers on five continents.

COVID-19 devastated the global economy but spurred a revenue spike in the cannabis industry, substantiating the opportunity in an already rapidly expanding sector.

For more information on Cannabis Strategic Ventures, please visit Cannabis Strategic Ventures (OTCQB: NUGS).

About CannabisNewsWire

CannabisNewsWire (CNW) is an information service that provides (1) access to our news aggregation and syndication servers, (2) CannabisNewsBreaks that summarize corporate news and information, (3) enhanced press release services, (4) social media distribution and optimization services, and (5) a full array of corporate communication solutions. As a multifaceted financial news and content distribution company with an extensive team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. CNW has an ever-growing distribution network of more than 5,000 key syndication outlets across the country. By cutting through the overload of information in today's market, CNW brings its clients unparalleled visibility, recognition and brand awareness. CNW is where news, content and information converge.

To receive SMS text alerts from CannabisNewsWire, text "CANNABIS" to 21000 (U.S. Mobile Phones Only)

For more information please visit https://www.CannabisNewsWire.com or The CannabisNewsAudio Podcast https://News.CannabisNewsAudio.com 

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

Do you have questions or are you interested in working with CNW? Ask our Editor

CannabisNewsWire is part of the InvestorBrandNetwork

DISCLAIMER: CannabisNewsWire (CNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with CNW or any company mentioned herein. The commentary, views and opinions expressed in this release by CNW are solely those of CNW and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable CNW and FNM for any investment decisions by their readers or subscribers. CNW and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.

The Article and content related to the profiled company represent the personal and subjective views of the Author and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer's filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer's securities, including, but not limited to, the complete loss of your investment.

CNW & FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW and FNM undertake no obligation to update such statements.

CannabisNewsWire (CNW) & NetworkNewsWire (NNW) are proud to be affiliated partners of the InvestorBrandNetwork (IBN)

About InvestorBrandNetwork

The InvestorBrandNetwork ("IBN") consists of trusted financial brands introduced to the investment public over the course of 14+ years. With IBN, we have amassed a collective audience of millions of social media followers. These distinctive investor brands aim to fulfill the unique needs of a growing base of Client Partners. IBN will continue to expand our branded network of highly influential properties, leveraging the knowledge and energy of specialized teams of experts to serve our increasingly diversified list of clients. 

Through NetworkNewsWire ("NNW") and its affiliate brands, IBN provides: (1) access to a network of wire solutions via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible; (2) article and editorial syndication to 5,000+ news outlets; (3) enhanced press release solutions to ensure maximum impact; (4) full-scale distribution to a growing social media audience; (5) a full array of corporate communications solutions; and (6) a total news coverage solution. 

Please see full terms of use and disclaimers on the InvestorBrandNetwork website applicable to all content provided by IBN, wherever published or re-published: http://IBN.fm/Disclaimer

Please feel free to visit the Investor Brand Network (IBN) http://www.InvestorBrandNetwork.com

Corporate Communications Contact:
CannabisNewsWire (CNW)
Denver, Colorado
www.CannabisNewsWire.com 
303-498-7722 Office
Editor@CannabisNewsWire.com

Media Contact:
FN Media Group, LLC
NNW@FinancialNewsMedia.com
+1-(954)345-0611