Market Overview

Wider Acceptance of Therapeutic Uses for Legal Cannabis is set to Drive Market Growth

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Wider Acceptance of Therapeutic Uses for Legal Cannabis is set to Drive Market Growth

PR Newswire

NEW YORK, August 22, 2018 /PRNewswire/ --

FinancialBuzz.com News Commentary 

Recent data published by Grand View Research Inc., indicates that the global legal cannabis market is projected to reach USD 146.4 Billion by end of 2025. The wider acceptance of cannabis products for medical and therapeutic purposes for conditions such as cancer, mental disorders, chronic pain and others, is projected to boost revenue growth in the near future. Both medical and recreational cannabis market sectors are seeing a period of strong growth, thanks in part to increasing legalization and decriminalization of cannabis products across North America and Europe. The research also explains that large public and private investments for the research and development of safer consumption methods of cannabis products such as tinctures, oils, vapes and edibles, are expected to positively impact market growth rates. WeedMD Inc. (OTC:WDDMF), MedMen Enterprises Inc. (OTC:MMNFF), Cannabics Pharmaceuticals Inc. (OTC:CNBX), Terra Tech Corp. (OTC:TRTC), Auxly Cannabis Group Inc. (OTC:CBWTF)

Canada had legalized cannabis nationally this June and the U.S. is gradually moving towards legalization, as California has legalized cannabis for recreational purposes earlier this year. Canada's new laws are expected to create a friendly business environment. According to a report by CBC, University of Waterloo entrepreneurship professor, Nada Basir, explained, "Where I think we're going to see a lot of startup activity around this new legislation is in activities outside the traditional growth and transaction of the product… typically, historically, this is where we see innovation really happen because it becomes the survival of the fittest, and to survive you're going to have to figure out how to scale, how you can be more efficient, how you can save costs."

WeedMD Inc. (OTC:WDDMF) is also listed on the Toronto Stock Exchange Venture under (TSX-V: WMD). Last week WeedMD Inc. and Phivida Holdings Inc. announced the, "signing of a final definitive joint venture agreement ("Agreement") to develop and operate Cannabis Beverages Inc. ("CanBev") at WeedMD's state-of-the-art greenhouse facility in Strathroy, Ontario.

As an early mover in the cannabis-infused beverage market, CanBev is positioning itself to capture significant market share in Canada's highly-anticipated consumable cannabis market. According to Consumer Health Products Canada, the CBD-infused products market is worth USD 5.6 Billion in Canada alone. The joint venture will be focused on product development, manufacturing, marketing and distribution of cannabis-infused beverages for Canada and export to licensed international markets. 

Under the terms of the Agreement, both companies will be strategic partners in the development of CanBev. WeedMD will act as the exclusive supplier of cannabinoid extracts for use in innovative cannabis-infused consumer products to be made at the CanBev facility. In doing so, WeedMD will designate manufacturing space at its 610,000 sq. ft. state-of-the-art licensed cultivation and processing facility located in Strathroy, Ontario.

In addition to supplying CanBev with premium, high-quality cannabis, WeedMD will assist CanBev with obtaining all necessary federal licenses and permits and has also agreed to provide all current and future genetics.

'We are thrilled to begin the development of this joint venture. With the launch of CanBev, WeedMD will be one of the first to introduce an innovative and popular consumption method with our cannabis-infused beverages - adding a new brand category for the medical and adult-use markets,' said Keith Merker, CEO of WeedMD. 'WeedMD is proud to collaborate with Phivida on this joint venture and to work alongside a world-class management team that includes former senior executives from beverage and other industry leaders who worked for Red Bull®, Seagram's®, Proctor and Gamble®, and McKesson. Leveraging proven success, we will be well-positioned to execute on our growth plans for infused beverages.'

Phivida will be sublicensing its current and future trademarks, intellectual property, branding and packaging to CanBev. Phivida has also agreed to lead new product innovation, research and development, formulation, packaging and branding for CanBev.

'The Phivida team is excited to contribute our management, expertise and product knowledge to the CanBev joint venture,' said Jim Bailey, CEO and President of Phivida. 'WeedMD is an ideal partner for Phivida and we are thrilled to bring our cannabinoid-infused beverages and brands back home to Canada. WeedMD provides CanBev with solid infrastructure, strong management, world-class genetics and proven success in the Canadian healthcare market. We are very proud to partner with best in class among the Canadian licensed producers.'

Transaction Summary: The joint venture will be structured as a jointly-owned company with a dedicated board of directors and operational management team. Phivida and WeedMD will retain 50% each of the Class A shares. The shares issued will correspond to CanBev's appointment of nominees to a Board of Directors- to be made up of five individuals, two nominated by Phivida, two by WeedMD, and one independent director. Phivida and WeedMD have agreed to fund capital requirements of CanBev equally, and on a pro-rata basis, from their respective treasuries, beginning with initial shareholder advances of USD 375,000 each."

MedMen Enterprises Inc. (OTCQB:MMNFF) is a leading cannabis company in the U.S. with assets and operations across the country. The Company recently announced that based on tax revenue numbers reported recently by the State of California, MedMen stores accounted for roughly six percent of all legal retail sales of cannabis and cannabis products in the second quarter. According to the California Bureau of Cannabis Control, there are currently more than 400 licensed marijuana dispensaries across the state. MedMen's eight stores represent about two percent of all retailers, meaning on average MedMen stores outperform non-MedMen stores by a factor of three. "The strong growth in tax revenue in the second quarter of the year shows that the legal cannabis industry is delivering on its promise of economic activity and greater public resources to the people of California," said Adam Bierman, MedMen Chief Executive Officer and Co-Founder. "We are proud of our contribution to the state and our brand's phenomenal performance in the largest legal cannabis market in the world."

Cannabics Pharmaceuticals Inc. (OTCQB:CNBX) is a United States-based public company that is developing a platform that leverages big data and artificial intelligence to develop cannabinoid-based therapies for palliative care and cancer treatments that are more precise to a patient's profile and specific cancer. Cannabics recently announced a partnership agreement with Eroll Grow Tech Ltd., developer of the world's first fully-automated grow device designed specifically for cannabis. Through this new partnership, Cannabics and Seedo will develop the first controlled device for growing medical cannabis at home, ensuring sustainable quality and supply of natural, pesticide-free product. The fully-automated grow device will be managed and controlled by an artificial intelligence algorithm and monitored by a smartphone app, using technology successfully implemented by Seedo for recreational growth. "This initiative will enable patients and eventually businesses to take control of their medical cannabis supply in a revolutionary manner," said Eyal Barad, Chief Executive Officer of Cannabics Pharmaceuticals. "Seedo's high-tech devices and Cannabics' capabilities will support the sustainable delivery of the right form and quality of medicinal cannabis."

Terra Tech Corp. (OTCQX:TRTC) operates through multiple subsidiary businesses including: Blüm, IVXX Inc., Edible Garden, and MediFarm LLC. Terra Tech has recently announced that it has partnered with the Valiente Group, a beverage production company that specializes in cannabis infusion, to produce a line of cannabis-infused beverages under the IVXX brand. The Company, through the partnership, is currently developing a range of non-alcoholic, cannabis-infused beverages, including 'champagne', 'apple cider', lemonade 'margarita' mix, zero calorie lemon lime soda and cherry lime sparkling water. The infusion technology will be powered by SORSE branded technology, a product of Tarukino Holdings, a patent pending Emulsion process which leaves beverages without oily residues and without cannabis flavor. The Company is simultaneously developing a single shot flavorless, odorless 5 milligram and 10 milligram shot that can be added to any beverage or craft cocktail for at-home infusion. "Our relationship with the Valiente Group will enable our initial entrance into the cannabis-infused, non-alcoholic beverage market, which is among the least crowded segments in the adult-use cannabis industry and presents a tremendous first mover opportunity for Terra Tech," Derek Peterson, Chief Executive Officer of Terra Tech, stated. "The build out of our Dyer Road facility will serve the growing demand for cannabis-infused beverages in the California Market and, in the future, we expect it to enable distribution to other markets, including Nevada."

Auxly Cannabis Group Inc. (OTCQX:CBWTF) is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. The Company recently announced that it has entered into a share purchase agreement with KGK Science Inc. to acquire all of the issued and outstanding shares of KGK for total consideration of USD12,300,000 payable in cash and common shares of the Company. KGK is a leading health and wellness-focused private contract research organization based in London, Ontario, and the Company expects to leverage KGK's expertise and research abilities to further the Company's product development efforts through collaboration with the Company's wholly-owned subsidiary, Dosecann Inc. Pursuant to the Share Purchase Agreement, the Company will acquire all of the issued and outstanding shares of KGK. Upon the completion of the Acquisition, KGK will become a wholly-owned subsidiary of the Company. As consideration for the KGK Shares, the shareholders of KGK are entitled to receive 4,132,231 common shares in the capital of the Company priced at USD 1.21 per Common Share, with the remainder of the purchase price to be paid in cash.

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