U.S. and Canada Lead the Cannabis Industry Despite Differing Regulations

NEW YORK, June 28, 2019 /PRNewswire/ -- As of late 2018, it was legal to cultivate marijuana in the homes of 21 U.S. states and the District of Columbia. However, some states such as Rhode Island and Oklahoma strictly stated that home growers can only cultivate cannabis for medical purposes. On the other hand, states such as California and Colorado allow their residents to grow cannabis for both recreational and medical applications. In particular, Colorado allows its residents to grow up to six plants per person, but if a household has two or more people, it is limited to 12 plants maximum per householder. Before the prohibition era, many growers cultivated cannabis outdoors, largely for medicinal purposes. However, once former President Franklin D. Roosevelt signed the Marihuana Tax Act of 1937, a large influx of indoor and greenhouse facilities began to emerge. Therefore, cultivators were able to hide their grow houses from government officials. But now legalization has gained momentum across the world, resulting in more outdoor facilities once again. Indoor and greenhouse facilities are still popular, but outdoor facilities provide growers with a more natural end product. On the contrary, indoor and greenhouse facilities allow cultivators to control the growing environment, allowing them to manipulate the growing process of the plant and potentially grow more potent cannabis buds and obtain a substantially higher yield per harvest. Nowadays, greenhouse and outdoor facilities are much more popular because they're built to produce on a large scale. However, the major drawback of these facilities is that the quality of the buds can be diminished as cultivators go for quantity over quality. Whether cultivators are choosing a more natural or a more controlled approach, it is still tapping into various consumer markets. For instance, a frequent consumer may prefer a more potent strain, while a first time user might be more attracted to the organic and natural aspect of outdoor-grown cannabis. Generally speaking, cultivators can market to different consumer trends based on their growing methods and techniques. According to data compiled by Grand View Research, the global legal marijuana market is expected to reach USD 146.4 Billion by 2025 while registering a CAGR of 34.6%. Canopy Rivers Inc. CNPOF RIV, Canopy Growth Corporation CGC WEED, Aurora Cannabis Inc. ACB ACB, Curaleaf Holdings, Inc. CURLF CURA, iAnthus Capital Holdings, Inc. ITHUF IAN

Unlike the U.S., Canada's home growing regulations tend to vary across different provinces. To note, the U.S. has not federally legalized cannabis but has given states the jurisdiction to decide whether to legalize cannabis or not. On the other hand, Canada fully legalized cannabis in October 2018. Despite the legalization, it still illegal to cultivate in certain provinces, including Manitoba and Quebec. Even if home growers follow federal guidelines, growing in Manitoba or Quebec violated provincial regulations. For instance, in Manitoba, the penalty for growing between one to four cannabis plants at home is a USD 2,542 fine. Quebec has a much more lenient fine, ranging from USD 250 to USD 750 for the first offense. However, fines can double for repeat offenders. Moreover, the consumption of cannabis in provincial areas will also result in fines and also includes additional court costs. In large, the two provinces have enforced the regulations to ensure an underage person does not consume cannabis. Yet, the Canadian government has pushed to allow homeowners to grow their own cannabis. Comparatively, the Canadian federal government has also taken precautions by limiting cultivation licenses to producers and shortening retail operating hours. And as a result, Canada's total adult-use sales were weaker-than-expected. Nonetheless, industry analysts believe that the Canadian market will mature and continue to thrive over the next several years as regulations tone down. Once cultivators ramp up operations and as more consumers enter into the marketplace, the Canadian market is positioned to become a global driving force for the cannabis industry. "I would say there's a lot of adjustment that needs to take place in this sector," said Bethany Gomez, Managing Director of Brightfield Group. "The good thing is Canada has one of the highest cannabis usage rates in the world — so it's going to be a longer play."

Canopy Rivers Inc. CNPOF RIV is also listed on the TSX Venture Exchange under the ticker RIV. Earlier last week, the Company announced, "an investment and strategic collaboration between Canopy Rivers and ZeaKal, a California-based plant science innovator with proprietary technologies that sustainably increase photosynthesis, improve plant yield and enhance nutritional profiles for a variety of agricultural crops. The investment from Canopy Rivers marks another significant corporate milestone this calendar year for ZeaKal, following the February announcement of its R&D collaboration with Corteva Agriscience CTVA, the recently spun-out and NYSE-listed agricultural science division of DowDuPont.

ZeaKal's proprietary technology, PhotoSeed™, increases a plant's intrinsic photosynthetic capacity, meaning that PhotoSeed™ plants can convert more sunlight and carbon dioxide into energy for growth. This results in substantial improvement in seed and grain yield, as well as improved macronutrient profiles that drive an increase in both oil and protein content. For farmers, this means better productivity and profit margins; for consumers, this means higher nutritional profiles and an environmentally friendly way to meet growing global demand.  With multi-year field trials across diverse plant species in the United States, Canada and New Zealand, the initial commercial focus has been on major row crops. Following Canopy Rivers' investment, ZeaKal intends to expand its program to include cannabis and hemp.

'Our investment in ZeaKal, the fifth consecutive international transaction for Canopy Rivers, builds on our thesis of selecting globally scalable and innovative processes, products, and technologies from complementary industries, and applying them to the cannabis and hemp economy,' said Mary Dimou, Director of Business Development at Canopy Rivers. 'Plant sciences is a mostly overlooked but absolutely critical segment of the cannabis and hemp value chain, and we are seeking to address this gap with this investment. ZeaKal's technology has already realized success across a number of crops during field trials, and these are crops that have been commercialized for decades. The application of this innovative technology throughout the Canopy Rivers portfolio and the cannabis and hemp industry at large could be a game changer.'

Canopy Rivers believes that ZeaKal's PhotoSeed™ technology has the potential to translate into significant benefits for the cannabis and hemp industry. Due to prohibition, the cultivation of cannabis and hemp has lacked the agricultural research and advancements that have significantly improved the cultivation of other crops. Canopy Rivers believes that applying ZeaKal's PhotoSeed™ technology to cannabis and hemp represents a significant step forward - with increased crop yield, higher oil production, additional grow cycles, and enriched cannabinoid output numbering among the potential benefits of the technology. While trials on cannabis and hemp have yet to begin, the positive results already achieved give Canopy Rivers confidence in ZeaKal's experienced team and its ability to successfully optimize and adapt its technology for expansion into this industry.

'We are elated that Canopy Rivers, a cannabis and hemp industry authority, has selected ZeaKal as an agriculture partner,' said Han Chen, Chief Executive Officer of ZeaKal. 'Beyond the capital, it is further validation that PhotoSeed™ is a next-generation blockbuster trait that can be utilized across diverse industries. With its rich domain and technical expertise, Canopy Rivers is supporting our entry into the cannabis and hemp markets with a technology we expect to be transformative for the sector.'

As a result of its US$10,000,000 investment, Canopy Rivers owns approximately 8.7% of ZeaKal on a fully diluted basis and holds an observer seat on ZeaKal's board of directors.

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 WEEDCGC 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.

About ZeaKal: ZeaKal is a plant science company developed from the incubation pipeline of Kapyon Ventures in partnership with AgResearch Ltd. The company is focused on developing, PhotoSeed™, a next-generation trait technology that has been proven to increase the photosynthetic capacity and yield of several major crops."

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=5Uh3ZkzgOfU

Canopy Growth Corporation CGC 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 it had acquired AgriNextUSA, a hemp enterprise led by Chief Executive Officer Geoff Whaling, that has been at the forefront of hemp advocacy and building a vibrant hemp sector in the USA. The acquisition will accelerate Canopy Growth's entry into key American jurisdictions as regulations surrounding the full use of hemp as a crop begin to be implemented, thanks in part to the recently enacted 2018 US Farm Bill. The vision proposed by AgriNextUSA and supported by Canopy Growth would involve creating Hemp Industrial Parks such as the one previously announced in New York State, where this super crop could be fast-tracked through a production cycle that would result in commercial applications for all parts of the plant, from root to tip. American farmers will benefit from a model that provides a single, regional destination for their hemp crops and connects them with the researchers, entrepreneurs and innovators whose ideas will turn their crops into new products and industries. "The United States is the next stop on Canopy Growth's desired path to becoming a leading, revenue-generating company focused on all aspects of cannabinoids and their potential," said Bruce Linton, co-Chief Executive Officer and Chairman of Canopy Growth. "Our significant investments, acquisitions and compilation of talented leaders such as Geoff will position us for swift expansion throughout the United States. By collaborating with a pioneer like Geoff, who has been involved with our team since our earliest days in 2013, we will aim to turn hemp supplied by American farmers into a wide range of products."

Aurora Cannabis Inc. ACB ACB, headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000 kg 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. recently announced that the Company, through its wholly-owned subsidiary Aurora Deutschland, has been selected by the Luxembourg Health Ministry as the exclusive supplier in a public bid to supply a second delivery of medical cannabis to Luxembourg. Under the terms of the bid, the medical cannabis produced will be sold to Luxembourg's Division de la Pharmacie et des Medicaments, representing the second time the Company has received an order directly from the Luxembourg government. While the initial bid quantities are small, the award confirms Aurora's position as a trusted and preferred supplier to international jurisdictions and reflects the Company's ability to work with local governments and regulators in complex, restricted markets. "We are proud to continue serving as the exclusive supplier of medical cannabis to the Luxembourg Health Ministry," said Neil Belot, Chief Global Business Development Officer. "Adding to the many achievements of our European team, which also includes our recent selection as one of only three companies to establish domestic production in Germany, our expanded supply agreement with Luxembourg reinforces Aurora's ability to act as a trusted partner that can readily meet the complex needs of diverse international markets."

Curaleaf Holdings, Inc. CURLF CURA is the leading vertically integrated multi-state cannabis operator in the United States. Curaleaf Holdings, Inc. recently announced that it had signed a definitive agreement granting it an option to acquire Ohio Grown Therapies medical cannabis cultivation and processing licenses and facility in Ohio. OGT was awarded preliminary cultivation and processing licenses by the Ohio Department of Commerce in 2018. OGT is building out its 32,000 sq. ft. cultivation and processing facility in Johnstown, Ohio. At completion, the facility will be comprised of 15,000 sq. ft. for two-tier cultivation and 7,500 sq. ft. for processing. Curaleaf is advising OGT on the buildout and expects to acquire OGT's cultivation and processing licenses as well as the lease to the Johnstown facility in the second half of 2019, subject to regulatory approval. "Curaleaf's expansion into Ohio is another step in our goal to be the most accessible cannabis company in the country, providing patients with high-quality, reliable products," said Joseph Lusardi, Chief Executive Officer of Curaleaf. "This transaction is reflective of our strategy to become vertically integrated with a focus on limited license markets. As the seventh most populous state in the country, Ohio is an emerging cannabis market with strong growth potential and we plan to continue pursuing opportunities that increase our exposure to this expanding customer base."

iAnthus Capital Holdings, Inc. ITHUF IAN owns and operates best-in-class licensed cannabis cultivation, processing and dispensary facilities throughout the United States, providing investors diversified exposure to the U.S. regulated cannabis industry. iAnthus Capital Holdings, Inc. recently announced that it had opened its second New York dispensary, located in the Dutchess County town of Wappingers Falls. The dispensary will operate as "Citiva Hudson Valley" under iAnthus' "Citiva" New York dispensary brand. The 2,600 sq. ft. dispensary is located at 1147 Route 9 in Wappingers Falls, a short drive from Beacon Train Station on the Metro-North Railroad, Marist College, Vassar College, and a collection of New York historical sites. The retail location initially will offer more than 30 locally-sourced, lab-tested products, including vape cartridges, tinctures, capsules, and powders, dispensed by highly-knowledgeable patient care representatives. "The opening of our Citiva Hudson Valley dispensary is a major milestone for iAnthus, as it marks the 20th dispensary opened by the Company," said Hadley Ford, Chief Executive Officer of iAnthus. "2019 will be full of catalysts and exciting developments for Citiva, including the much-anticipated completion of our cultivation facility in Warwick, New York, and the opening of dispensaries in Staten Island and Chemung County."

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