Market Overview

Cannabis Vape Sales Rebound as Companies Distance Themselves from Illicit Vendors

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NEW YORK, Nov. 20, 2019 /PRNewswire/ -- The North American cannabis industry has grown at a remarkable pace as more regions continue to pass legislation. However, the industry has been burdened by regulations imposed by health officials and lawmakers. More recently, the cannabis industry came into the spotlight due to the ongoing vaping epidemic, as hundreds of medical cases have emerged related to vaping. The Centers for Disease Control and Prevention noted that THC vape products have played a major role in the outbreak. To note, the CDC mentioned that vape products purchased from illicit vendors must be disposed of immediately and urged consumers to purchase their products from legally licensed vendors. As of November 5th, the CDC highlighted that there were 2,051 cases of lung injuries related to vaping, with 39 people dying thus far. Consequently, research firm New Frontier discovered that U.S. vape sales fell by 15% in the first week of September and saw no rebound through September 18th. Specifically, states such as New Mexico, Massachusetts, and Nevada witnessed their sales decline by a third, while California fell by 6%. Nevertheless, Marijuana Business Daily noted that vape sales began to stabilize in early October, primarily in recreational cannabis markets in the U.S. such as California, Nevada, and Washington. For instance, California's vape sales rebounded by approximately 1%, while Nevada rebounded by roughly 0.5%. Moreover, many licensed cannabis vape producers have mentioned that they had not received any concerns or issues related to their products. In response to the epidemic, multiple industry experts have told consumers to purchase cannabis products only from legal vendors, who explicitly mention the additives as well as the growing procedures of the product. And in light of recent events, consumers and federal officials alike are beginning to demand more stringent research and better-regulated products. And according to data compiled by Zion Market Research, the global cannabis concentrate market was valued at USD 3.73 Billion in 2018. By 2026, the market is anticipated to reach USD 13.78 Billion, expanding at a CAGR of 17.8% throughout the forecast period from 2019 to 2026. Citation Growth Corp. (OTC:CGOTF) (CSE:CGRO), KushCo Holdings, Inc. (OTC:KSHB), The Supreme Cannabis Company, Inc. (OTC:SPRWF) (TSX:FIRE), Auxly Cannabis Group Inc. (OTC:CBWTF) (TSXV:XLY), Terra Tech Corp. (OTC:TRTC)

Despite legalization efforts in specific regions, many consumers still tend to prefer obtaining their products from illicit vendors. For instance, one year after Canada fully legalized cannabis, 60% of Canadians still obtained their products from black market dealers or sources that are not entirely legal. However, the percentage has steadily fallen since Canada fully legalized cannabis in October 2018. Generally, more consumers prefer to purchase from black market channels because it is significantly cheaper compared to legal marketplaces. According to a study by Statistics Canada, legal cannabis now costs 65% more than black market products, increasing from 50% in the fourth quarter of 2018. On the other hand, a study conducted by Brightfield Group discovered that 43% of the respondents were willing to pay more for premium, while 34% were reluctant to pay more for certified organic products. Moreover, occasional consumers were more willing to pay for healthier methods of delivery such as concentrates or extracts. And the concentrate and extract market rapidly expanded because consumers were beginning to demand more potent and healthier alternative products. And according to a survey published in the U.S. National Library of Medicine, respondents that preferred vaping said it was healthier, better tasting, produced better effects, and overall was much more satisfying than from dried flower. And while there are several drawbacks to cannabis-based oils, consumers believe that vaping legal products causes much less harm than smoking flower. Additionally, oils are also much more potent and deliver the effects almost instantaneously. According to Leafly, the potency of cannabis buds is typically between 10% to 25% THC levels, while oils can fall in the range of 50% to 80%, with some exceptional extracts pushing past 90%. In fact,  oils are exponentially more potent because extractors are stripping the plant material and isolating desirable cannabinoids such as THC or CBD. Moreover, extraction processes may also remove harmful chemicals like pesticides as well as other contaminants and residual solvents. Furthermore, vaporizers heat cannabis below the temperature of combustion, but hot enough to extract beneficial compounds, making it the ideal method for health-conscious consumers. "I think vaping is a less harmful alternative to smoking," Scott Gottlieb, Former U.S. Food and Drug Administration Commissioner, said in an interview with CNBC. "There's no question if a currently addicted adult smoker migrates to a vaping product, they're gonna improve their health. There's no question about that."

Citation Growth Corp. (OTCQX:CGOTF) (CSE:CGRO) is also listed on the Canadian Securities Exchange under the ticker (CSE:CGRO). Yesterday, the Company announced breaking news that, "the Company is now in production to have dispensary shelves stocked with the Company's Proprietary organic products. Highly anticipated among dispensaries and enthusiasts, 25,000 live resin and distillate vape pens are set for distribution right ahead of the holiday rush.

'Our goal has been to retain the true essence of the plant and preserve that quality in a truly premium organic line, bringing to market a top-quality flavorful selection sure to compete well against the top contenders in its league.' stated, Rahim Mohamed, President. Products being prepared for launch are expected to hit shelves the last week of November.

These exclusive blends are sourced from exquisite sources like FIORE - TRIPLE CERTIFIED to produce specific products like Diamonds Live Resin, Sugar Wax and Live Resin Vape Pen formulations.

FIORE was born out of the necessity to bring exceptional cannabis genetics, growing standards and passion to commercial cannabis - keeping craft cannabis alive. Having passed through the ranks of the cannabis industry over the last 15 years, Management has taken the experience, the knowledge and the pride from growing exceptional cannabis and delivered it to the Nevada marketplace, enabling consumers with the opportunity to experience the simplicity, elegance and quality, in the finished product, that is decades in the making.

Diamante Labs was founded on the determination to formulate high quality extracts by using closed loop hydrocarbon processes. Based on research, management believes that up to 100% of products produced will be sold almost immediately upon delivery to dispensaries.

Vape Pen wholesale prices for Citations premium products are as follows:

Diamante Labs Live Resin Disposable Vape Pen, 0.30 grams per pen $22.00

Diamante Labs Live Resin cartridge, 0.50 grams $35.00 each

Superior Extracts distillate Disposable Vape Pen, 0.30 grams $13.00 per pen

Superior Extracts distillate cartridge, 0.50 grams $22.00 each

Superior Brand will be mostly Distillate to start and Diamante Labs Vape Pen will be mostly Live Resin to start. Citation will begin to diversify its product lines in the upcoming months to offer our customers a wide range of premium quality extracts. Our focus will be on our Triple-Certified Organic Diamante Labs products that are healthier for the end user.

About Citation Growth Corp, Citation Growth Corp. is a publicly traded company that has been investing in the medical and recreational cannabis space since 2014. Citation has rapidly expanded its operating portfolio to include cultivation, production, and dispensary locations in key North American state-legal jurisdictions and is seeking expansion opportunities worldwide."

For our latest "Buzz on the Street" Show featuring Citation Growth Corp. recent corporate news, please head over to: https://www.youtube.com/watch?v=OgTYh1sG5MA

KushCo Holdings, Inc. (OTCQX:KSHB) is the premier producer of ancillary products and services to the cannabis and hemp industries. KushCo Holdings, Inc. recently announced that it had entered an exclusive distribution agreement with De La Rue, a global leader in anti-counterfeiting and authentication solutions. In accordance with the agreement, KushCo will offer the growing cannabis industry standard and custom branded anti-counterfeit security labels. The solution will also provide unique IDs to support product serialization and a digital verification system to enable authentication throughout the regulated cannabis supply chain. The regulated cannabis industry is being actively targeted by counterfeiters aiming to benefit from the industry's explosive growth. The KushCo proposition will provide companies with enhanced packaging, with the most secure visual authentication technology using 3D photopolymer images, unique serialization, e-verification, label tracking, and data capturing capabilities. "It is our responsibility as a leader in the space to build consumer trust in addition to empowering governments and brands. Counterfeit products undermine the legitimate cannabis industry by hurting sales, cheating governments out of tax revenue, and eroding consumer confidence while putting their health at risk. KushCo wants to provide the tools for our clients to have greater transparency and accountability," said Nick Kovacevich, KushCo's Chief Executive Officer.

The Supreme Cannabis Company, Inc. (OTCQX:SPRWF) (TSX:FIRE) is a global diversified portfolio of distinct cannabis companies, products and brands. The Supreme Cannabis Company, Inc. recently announced that its wholly-owned subsidiary, Blissco, had launched a new full-spectrum CBD oil, Pūr Dew. With the launch of Pūr Dew CBD oil, Supreme Cannabis diversifies its product offerings, which currently include dry flower from 7ACRES and high-THC cannabis oil from KKE. Pūr Dew was created in British Columbia, using pure CBD cannabis oil and USDA certified organic MCT coconut oil. Blissco was able to retain the delicate terpenes, giving Pūr Dew the aromatic smell of clove, with refreshing hints of citrus and pine. Blissco is committed to sourcing packaging that is the least harmful to the environment. Continuing this commitment, Pūr Dew is available in recyclable glass bottles and the cardboard packaging is made from 100% post-consumer waste paper. "We are excited to expand our product offering to include CBD, arguably one of the fastest growing product segments on the market. As Blissco's first CBD oil, Pūr Dew offers consumers full-spectrum CBD and USDA certified organic MCT coconut oil," said Navdeep Dhaliwal, Chief Executive Officer of Supreme Cannabis. "Our team worked incredibly hard to provide consumers with a product that retains the benefits of the plant and the natural terpenes. Pūr Dew can be taken directly or mixes well into beverages, such as smoothies. We are excited for consumers to try Pūr Dew," continued Mr. Dhaliwal.

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 Robinsons Outdoor Grow, a large scale, high quality outdoor cultivation project located in the heart of Nova Scotia's award-winning wine region of Annapolis Valley. Robinsons OG is uniquely located in a region that is ideal for outdoor cannabis cultivation given its diverse soil types and microclimates; the same soil on which the Acadians grew hemp over 250 years ago. Located within 25 kilometers of Robinsons' 27,700 square foot indoor facility, Robinsons OG is comprised of over 158 acres of land in Hortonville, Nova Scotia and offers road frontage and highway access, allowing for the potential future development of tourism and point of sale opportunities. Hugo Alves, Chief Executive Officer of Auxly, commented: "We are thrilled to announce our Robinsons OG project. As you know, we are very excited to introduce Andrew's incredible dried cannabis flower to discerning Canadian consumers and Robinsons OG provides us with the perfect platform from which to expand our Robinsons branded product offering. Under Andrew's supervision, Robinsons OG will give us the ability to grow a broader range of Robinsons' genetics, using Robinsons' cultivation methodologies, and take advantage of the unique terroir of the Annapolis Valley to bring Canadian consumers Robinsons branded cannabis products, all produced with an unwavering commitment to quality and craftsmanship."

Terra Tech Corp. (OTCQX:TRTC) operates through multiple subsidiary businesses including: Blüm, IVXX Inc., Edible Garden, and MediFarm LLC. Terra Tech Corp. recently announced that it had started the process to open a CBD only retail location called Blüm CBD in downtown Las Vegas at its retail location on 121 North 4th Street. The future Blüm CBD is positioned to be easily accessible and draw high volumes of customers on North 4th Street, located just 100 feet from the world-famous Fremont Street Experience which attracts more than 14 million annual visitors. The design of the store will be reflective of new Blüm store concepts and the artful vibe of downtown Las Vegas. Blüm CBD is expected to have an eye-catching façade and a bright and modern interior with modular displays in place to keep the visual merchandising of the store fresh, clean and organized. Chief Executive Officer, Derek Peterson, said, "Converting our North 4th Street location into an exclusive one stop shop for CBD products will allow Terra Tech to excel in its retail initiatives and stay ahead of the booming CBD industry that's unfolding in the U.S. With its location in the heart of Las Vegas, the new CBD focused store will reflect high consumer demands and set standards for our CBD sales. Much planning has gone into operating as a CBD provider at this location and we are extremely excited to share our products with all who are a part of such an iconic city."

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