Market Overview

The Expanding CBD Market Begins to Witness Thawing Regulations

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NEW YORK, Nov. 5, 2019 /PRNewswire/ -- As the cannabis industry continues to develop, lawmakers and federal agencies are actively working towards expanding the market. Recently, U.S. Department of Agriculture (USDA) revealed new hemp regulations that would provide farmers with a bit of leeway. Under the draft rules, the USDA is proposing that cannabis plants with up to 0.5% THC levels become eligible for commercialization. Currently, all hemp plants must contain 0.3% or lower THC levels to be commercialized. The USDA noted that many of these farmers take necessary steps and precautions to ensure their hemp meets regulatory guidelines, however, sometimes they still produce unacceptable hemp. To note, 0.5% THC levels are similarly insignificant as 0.3% and will not cause psychoactive effects on the consumer. The new draft will provide farmers with a slight cushion in order to avoid potential charges as well as profit losses. Additionally, the proposal by the USDA may hint that federal regulators are beginning to tone down regulations amid widespread legalization efforts. And while the U.S. is one of the leading markets in the hemp industry, other international regions have also moved to adopt hemp-derived products. Notably, several countries have decided to legalize hemp-derived CBD specifically for medical applications. For instance, countries such as Australia, Colombia, France, Germany, New Zealand, Thailand, and the U.K. have all adopted CBD to treat certain medical conditions. Overall, hemp-derived CBD products are having a profound breakthrough throughout the world because of their therapeutic benefits, with researchers noting that CBD can effectively be used to treat a variety of medical ailments. However, health officials have also noted that research is still very limited. Nevertheless, researchers are continuing to ramp up clinical trials in order to fully understand the efficacy of CBD. And according to data compiled by Grand View Research, the global cannabidiol market is expected to reach USD 9.69 Billion by 2025 while registering a CAGR of 32.6% during the forecast period. Newleaf Brands Inc. (OTC:NLBIF) (CSE:NLB), Valens Groworks Corp. (OTC:VGWCF) (TSXV:VGW), Sorrento Therapeutics, Inc. (NASDAQ:SRNE), iAnthus Capital Holdings, Inc. (OTC:ITHUF) (CSE:IAN), Auxly Cannabis Group Inc. (OTC:CBWTF) (TSXV:XLY)

The CBD marketplace is predominantly driven by the medical sector because of its rapid, global proliferation. Generally, most consumers intake CBD through forms of oils, creams, capsules, edibles, and vapes. However, innovative entrepreneurs have developed other ingenious forms of products such as shampoos, soaps, toothpaste, face masks, and even pet foods. Typically, these forms of CBD products are aimed towards health-conscious consumers who are looking to alleviate minor conditions such as headaches or soreness. On the other hand, some consumers use CBD products to receive essential nutrients such as amino acids and vitamins. Regardless, most consumers are using CBD primarily as a mild pain reliever and relaxant. Notably, CBD is expected to experience significant growth in the Canadian market as "Cannabis 2.0" continues to ramp up. After marking its one-year anniversary of legal cannabis, Canadian regulators have decided to allow operators to manufacture cannabis-based products such as edibles, beverages, and vapes. Now, industry experts believe that the new legislation is expected to create a multi-billion-dollar market as new products flood retailer shelves. However, experts have also noted that the process of "Cannabis 2.0" will not occur immediately, but will take several months for the effects to be felt. Specifically, CBD products are expected to experience the greatest expansion because of their widespread abundance in retail locations as well as online stores. Consequently, analysts believe that the number of CBD users is also expected to grow. "I think it's because for some consumers, it actually works as both an anti-inflammatory and anti-anxiety [product]," Cowen analyst Vivien Azer explained when asked about the popularity of the market. "Those are characteristics that are tangible to the consumers. With CBD, you know if it works for you or not. There is a tangible payback in relatively short order."

Newleaf Brands Inc. (OTC:NLBIF) (CSE:NLB) is also listed on the Canadian Securities Exchange under the ticker (CSE:NLB). Yesterday, the Company and its wholly owned subsidiary We Are Kured, LLC announced, "the launch of three new flavor profiles for its disposable vape pens and 510 thread refill cartridges.

Matthew Mograbi, US National Sales Manager of Eybna Inc. commented, "We have always enjoyed working with the Kured brand. Benjamin and his team run a great operation. We are excited to grow with them on this upcoming expansion."

The new profiles consist of three crafted flavors, available in mango, tangerine and Charlotte's Web. Each flavor has its own colored packaging expressing the product's taste and feel. In addition to the new profile offerings, Kured will donate a portion of the proceeds from the sale of the Charlotte's Web profile to select charities that directly benefit veterans all over the United States.

'Our three oil flavor profiles have been a big hit in the CBD vape industry, I honestly couldn't have asked for a better terpene partner than Eybna. Eybna terpenes are by far the best in the world and I cannot wait to see the reaction to the new oil offerings. The mango profile is my new favorite,' said Benjamin Martch, CEO of Kured and CMO of NewLeaf Brands.

ABOUT NewLeaf Brands: NewLeaf Brands, Inc. is an innovative Cannabidiol ("CBD") lifestyle Company. Through the Company's wholly-owned subsidiaries We are Kured, LLC, Drink Fresh Water, LLC, ReLyfe Brand, LLC and TeaLief Brand, LLC the Company's main business activities encompass the development, marketing, and distribution of CBD products (including vaporizer pens/cartridges, hot/cold tea, softgel capsules and beverages) throughout North America, South America, and Europe. In addition, NewLeaf Brands, Inc. has extensive retail and cultivation land investments in Oregon, USA."

For our latest "Buzz on the Street" Show featuring Newleaf Brands Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=sI3A8RCK-S4

Valens Groworks Corp. (OTCQX:VGWCF) (TSXV:VGW) is a multi-licensed, vertically-integrated cannabis company focused on being the partner of choice for leading Canadian and international cannabis brands by providing best-in-class, proprietary services including CO2, ethanol, hydrocarbon, solvent-less and terpene extraction, analytical testing, formulation and white-label product development. Valens GroWorks Corp. recently announced that it had received an amended license from Health Canada and continues to make significant progress with the build-out of the adjoining state of the art white label manufacturing facility scheduled for completion by H1 2020. Under the new license, Valens is now authorized to manufacture and supply oil products directly to provincial distributors and other authorized Canadian retail supply channels. Valens will immediately start leveraging this amended license to expand services provided to its white label manufacturing partners, delivering retail ready products including tinctures and gel caps. The Company plans to further expand its retail ready product offerings to include vaporizer cartridges, beverages, topicals and other desired products as permitted by Health Canada. "This amended license represents another significant milestone for the Company," said Tyler Robson, Chief Executive Officer of Valens. "We are excited to be able to utilize this license, our industry leading extraction, IP and formulation services along with our strategic partnerships with companies like Shoppers Drug Mart, to provide our white label partners access to a comprehensive service offering."

Sorrento Therapeutics, Inc. (NASDAQ: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."

iAnthus Capital Holdings, Inc. (OTCQX:ITHUF) (CSE: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. CBD For Life, a subsidiary of iAnthus Capital Holdings, Inc., recently announced that it is continuing to expand its retail presence with a partnership with Dillard's, Inc. "We're excited for our products to be featured on the shelves of one of the largest and most well-regarded fashion retailers in the United States," said Beth Stavola, Co-Founder of CBD For Life and Chief Strategy Officer of iAnthus. "The ability to reach an even broader audience via the well-established customer base of a great partner like Dillard's brings us another step closer to achieving our end goal of establishing CBD For Life as a household name in beauty and wellness."

Auxly Cannabis Group Inc. (OTCQX:CBWTF) (TSXV:XLY) is an international cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the medical, wellness and adult-use markets. Auxly Cannabis Group Inc. recently announced that its wholly-owned subsidiaries, Dosecann Inc. and Kolab Project Inc., have received amendments to their respective oil sales licenses from Health Canada. These amendments authorize Dosecann and Kolab to sell cannabis extracts, edibles and topical products to the Canadian market. Hugo Alves, Chief Executive Officer of Auxly, commented: "We are delighted with the issuance of the licence amendments to Dosecann and Kolab and the successful submission of the required new product notifications for over 80 unique cannabis product SKUs under three of our cornerstone brands. These amendments and notifications are necessary regulatory milestones that must be achieved by any company wishing to sell derivative cannabis products when the 2.0 market begins later this year. Having successfully achieved these milestones, Auxly is able to launch its portfolio of branded cannabis products as soon as legally permitted by the regulations. This is an important step in executing our route-to-market strategy and introducing Canadian consumers to our incredible products."

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