Consumer Spending on Cannabis Keeps Growing With New Regions Setting up Shop

NEW YORK, April 25, 2019 /PRNewswire/ -- The cannabis marketplace has continued to trend in the eyes of consumers all around the globe, as over the past decade, many countries have moved to adopt cannabis into their legislation. Meanwhile, other countries which have yet to take that larger step have begun to decriminalize the plant as well as study its potential benefits. Despite this growing international movement, the U.S. still dominates the overall industry, with states such as California and Colorado recognized as the main drivers. Specifically, California and Colorado collectively delivered over USD 3 Billion in revenue in 2017 as these two states are among the most mature marketplaces in the world. California became the first state to legalize medical cannabis back in the 1990's with the approval of Proposition 215, while Colorado legalized medicinal use in 2000. Throughout the next decade, a smattering of states began to legalize medical cannabis. Then, in 2012, Colorado and Washington became the first two states to legalize recreational use following the passage of Amendment 64 and Initiative 502. While California was the first to legalize medical cannabis, the state did not move to legalize its recreational use until 2016, when the ballot was finally approved. Overall, as more states and countries move to legalize cannabis for either medical or recreational use, consumer spending is projected to increase, thus delivering more revenue to the industry. According to data compiled by ArcView Research and BDS Analytics, the worldwide consumer spending on legal cannabis was expected to be USD 12.2 Billion in 2018. By 2022, the research suggests that legal spending will grow to USD 31.3 Billion, registering a CAGR of 26.7% over the five-year period from 2017. WeedMD Inc. WDDMF WMD, Anheuser-Busch InBev SA/NV BUD, Cresco Labs Inc. CRLBF CL, Curaleaf Holdings, Inc. CURLF CURA, Sorrento Therapeutics, Inc. SRNE.

Primarily, the majority of the cannabis revenue currently stems from medicinal sales. However, it is projected that the recreational sector will overshadow the medical sector over the course of the upcoming years. Consumers have shifted from buying traditional flower to buying concentrates, oils, tinctures, and creams, and, according to a report by New Frontier Data and MJ Freeway, retail flower prices have fallen by 25% per ounce, likely due to a 40% drop in consumer demand for it. On the other hand, shares of concentrates have grown by 138% since 2015, now accounting for 38% of all sales in 2018. Now, while the data also suggests that 60% of consumers spend less than USD 50 each time they purchase, many consumers purchase products multiple times a month. And nearly half of the consumers in the report said that they spend more than USD 100 per month on cannabis. Moreover, with the entry of other public and private industries into the market, consumer spending is expected to increase even further. Notably, the beverage and tobacco industry have already invested in the cannabis industry. Furthermore, political trends such as the U.S. Food and Drug Administration's approval of Epidiolex, a CBD-based drug to treat epilepsy, and the passage of the U.S. Farm Billion, are also expected to accelerate the industry. "The entry of some of the largest alcohol and tobacco companies into the cannabis sector, as well as the Congressional passage of a Farm Bill legalizing growing hemp in the United States, were key to making 2018 a year of historical importance," said Troy Dayton, Chief Executive Officer of The ArcView Group. "This year, we also saw two of the worlds three largest legal medical markets – California and Canada – transition to legal regimes that allow all adult consumers to buy cannabis, while voters in the other top-3 market – Michigan – approved a ballot measure to do the same."

WeedMD Inc. WDDMF WMD is also listed on the TSX Venture Exchange under the ticker WMD. Earlier last week, the Company announced breaking news that, "Pioneer Cannabis Corp. ("Pioneer Cannabis"), a national cannabis retail service provider, is pleased to announce it has signed a Master Cannabis Retail and Licensing Agreement ("Licensing Agreement") with Ontario cannabis retail lottery winner Guruveer Sangha who will be the owner and operator of the first Pioneer Cannabis retail store located at 1200 Brant Street in Burlington, Ontario. Pioneer Cannabis is a collaboration between WeedMD Inc. WMD (OTCQX:  WDDMF) (FSE:4WE) ("WeedMD"), a federally-licensed producer and distributor of medical-grade cannabis, and Pita Pit Canada ("Pita Pit"), a privately-owned Canadian fast casual franchise eatery with over 225 stores in Canada.

Mr. Sangha, an entrepreneur and lawyer from the Greater Toronto Area, recently secured a Retail Operator Licence ("ROL") from the Alcohol and Gaming Commission of Ontario ("AGCO"). The 4,000 square foot Pioneer Cannabis Co. store is expected to open in late spring following final AGCO inspection and subsequent receipt of its Retail Store Authorization ("RSA"). Located next to the main arterial highways that border Oakville and Hamilton, the high-capacity area of Burlington and its surrounding areas has a combined population of over 1.7M.

"As a keen observer of the cannabis industry and a strong proponent of local economic growth through small business, I am delighted to be working with Pioneer Cannabis. Together we look forward to setting the standard for Canadians seeking safe stewardship of cannabis in a quality retail setting," said Mr. Sangha.

'It is an important milestone for us to be able to support Guruveer's establishment of Canada's first Pioneer Cannabis store," said Kristie Smith, President of Pioneer Cannabis. "He will be a driving force behind what we expect to be a true retail success as we launch a leading Canadian cannabis retail store that combines product, education and experience. We look forward to helping Guruveer realize his plan of opening additional Pioneer Cannabis stores across the GTA as soon as regulatory rules permit."

"We are all stewards of cannabis and our pioneering spirit welcomes this retail endeavour between Pioneer and Guruveer," said Keith Merker, CEO of WeedMD.

"Congratulations to Guruveer and Pioneer Cannabis. We're pleased to see that the Burlington community and its surrounding area is in responsible hands," said Chris Fountain, CEO of Pita Pit.

Pioneer Cannabis continues to pursue retail opportunities within Ontario and other provinces in accordance with prevailing cannabis retail regulations. For additional information and updates on store openings, visit the Pioneer website www.pioneercannabis.com

About Pioneer Cannabis Corp: Pioneer Cannabis Corp. is a cannabis retail services provider resulting from the collaboration of two industry-leading Canadian companies, WeedMD Inc., a trusted licensed cannabis producer, and Pita Pit Canada, a franchising and brand expert, to develop opportunities for everyday Canadians interested in owning and operating their own cannabis retail store. The values of Pioneer are deeply rooted in community and providing small business owners with the opportunity to thrive and contribute to their local economy. We are the pioneers of cannabis retail, supporting businesses from the ground up and setting the standard for Canadian cannabis retail.

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 158-acre state-of-the-art greenhouse and outdoor facility located in Strathroy, Ontario. The Company currently has 136,000 square feet of licensed production space across its facilities 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 more information, access WeedMD's investor presentation here (https://www.weedmd.com/investing-in-weedmd/) and recently updated corporate video here (https://www.youtube.com/watch?v=ktgJ_BQtBCs&feature=youtu.be).

About Pita Pit: Founded in 1995 in Kingston, Ontario near Queen's University, Pita Pit® is an innovative fast-casual restaurant with a unique mindset that challenges consumers to Refuse to Settle™ for anything less than quality, healthy, freshly grilled food. After rapidly earning a loyal following in its home market, franchising began across Canadain 1997 and, in 1999, the brand expanded to the United States. Now boasting more than 600 stores across North America and internationally across 13 countries, Pita Pit offers its customers millions of ridiculously delicious, customizable flavour combinations of grilled meats, fresh vegetables, and zesty sauces all rolled into a unique and convenient pita package. For more information about Pita Pit, visit www.pitapit.ca/consumer or www.facebook.com/pitapitcanada."

For our latest "Buzz on the Street" Show featuring WeedMD Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=v4vOilnkTfY  

Anheuser-Busch InBev SA/NV BUD is a publicly traded company ABI based in Leuven, Belgium, with secondary listings on the Mexican ANB and South African ANH stock exchanges and with American Depositary Receipts on the New York Stock Exchange. Recently, AB InBev, the world's leading brewer, and Tilray, a global pioneer in cannabis production and distribution, announced a partnership to research non-alcohol beverages containing tetrahydrocannabinol (THC) and cannabidiol (CBD). The partnership is limited to Canada and decisions regarding the commercialization of the beverages will be made in the future. The research partnership combines AB InBev's deep experience in beverages with Tilray's expertise in cannabis products. AB InBev's participation will be through its subsidiary Labatt Breweries of Canada, one of the country's founding businesses and its leading brewery, and Tilray's participation will be through its Canadian adult-use cannabis subsidiary High Park Company, which develops, sells, and distributes a portfolio of socially responsible cannabis brands and products in Canada. Each company intends to invest up to USD 50 Million USD, for a total of up to USD 100 Million USD. "Labatt is committed to staying ahead of emerging consumer trends. As consumers in Canada explore THC and CBD-infused products, our innovative drive is matched only by our commitment to the highest standards of product quality and responsible marketing. We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities," said Kyle Norrington, President, Labatt Breweries of Canada. "We look forward to learning more about these beverages and this category in the months ahead."

Cresco Labs Inc. CRLBF CL, based in Chicago, is a leading U.S. cannabis company with experienced management, access to capital and a demonstrated growth strategy. Cresco Labs Inc. and CannaRoyalty Corp. d/b/a Origin House recently announced that they had entered into a definitive agreement pursuant to which Cresco Labs will acquire all of the issued and outstanding shares of Origin House. Under the terms of the Agreement, holders of common shares of Origin House will receive 0.8428 subordinate voting shares of Cresco Labs for each Origin House Share. Origin House has become a leading distributor and provider of brand support services in California, the world's largest regulated cannabis market. Origin House's proven strategy has been to build relationships with established dispensaries, build partnerships with established market-leading brands, develop promising cannabis product companies, and then leverage its full suite of support services to transform those products into strong California consumer brands. Origin House delivers over 50+ cannabis brands to more than 500 dispensaries in California, representing approximately 60% market penetration. "The acquisition of Origin House is another example of our focused and disciplined approach to creating a meaningful presence in key cannabis markets through excellence in brand development and distribution," said Cresco Labs Chief Executive Officer and Co-founder Charlie Bachtell.

Curaleaf Holdings, Inc. CURLF CURA is the leading vertically integrated multi-state cannabis operator in the United States. Curaleaf Holdings, Inc. recently announced the grand opening of its Gainesville dispensary as the company continues to expand rapidly throughout the state. Curaleaf has the largest cannabis dispensary footprint in the US. Over 1,100 sq. ft., the Gainesville dispensary includes 2 private consultation rooms for patients and a community meeting room.  The company will launch a series of monthly educational events this April for local patients, physicians and community members. "Strong patient demand in the Gainesville area supported the transformation of our fulfillment center into a full-service dispensary where Alachua County patients can take advantage of our compassionate, exceptional customer service and educational resources, in addition to having access to our premium quality medical marijuana products," shared Joe Lusardi, Curaleaf Chief Executive Officer.

Sorrento Therapeutics, Inc. SRNE is a clinical stage, antibody-centric, biopharmaceutical company developing new therapies to turn malignant cancers into manageable and possibly curable diseases. Sorrento Therapeutics, Inc. recently announced that it has established a new business unit to focus on the market potential for its innovative water soluble cannabidiol (CBD) formulation technology. Cannabidiol (CBD) has been under consideration within the pharmaceutical side of Sorrento for its interesting pharmacological properties and potential clinical benefits in multiple central nervous system, autoimmune or inflammatory disease and pain related indications. "Without distracting from our pharmaceutical business, we have the ability to leverage another Sorrento innovative technology – this time from our formulation experts – and make it available to the broader consumer market" stated Dr. Henry Ji, Chief Executive Officer and Chairman of Sorrento Therapeutics. "Longer-term, we may consider spinning off our CBD consumer business into an independently operated company if appropriate, while our research and clinical development team continues to explore the potential pharmaceutical applications of cannabidiol (CBD) for the medical markets".

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