Big Growth Is Expected for Retail Cannabis Sales

Tuesday, July 3, 2018 Drug News
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NEW YORK, July 3, 2018 /PRNewswire/ --

FinancialBuzz.com News Commentary  

According to a research

report provided by Marijuana Business Daily, cannabis retail sales growth-rates remain strong year-over-year as new markets emerge and more States legalize medical and recreational cannabis. Sales in 2018 are expected to increase by roughly 50% compared
to last year, meaning sales value is on track to reach USD 8 Billion - USD 10 Billion by December of this year. The research also estimates that by 2022, annual retail cannabis sales in the United States could top USD 20 Billion, a 200% increase from 2017. As for the economic impact that the new and growing industry is expected to have, the data projects an estimated USD 28 Billion - USD 34 Billion in economic impact in 2018. Tidal Royalty Corp. (CSE: RLTY.U), Kush Bottles, Inc. (OTC: KSHB), Vitality Biopharma, Inc. (OTC: VBIO), Auxly Cannabis Group Inc. (OTC: CBWTF), mCig, Inc. (OTC: MCIG)

The recent progress, from both the political and technological grounds, has helped push the market in new directions. Editor-in-Chief at Arcview Market Research and Principal Analyst at BDS Analytics, Tom Adams, explained: "Our data shows positive indicators across the board for the legal cannabis industry, in North America and around the globe. The passage of the 2016 ballot initiatives and continued maturation of the existing Adult-Use markets are the primary drivers of the growth this year. That's nothing compared to what we can expect in 2018 and beyond from Nevada's tourism, and California and Canada planning to launch Adult-Use sales in 2018."

Tidal Royalty Corp. (CSE: RLTY.U) just announced breaking news on Tuesday morning that, "The final terms of the Letter of Intent ("LOI") entered into on April 30, 2018 with an established Oregon licensed operator ("Oregon Cannabis Company") to finance the company's expansion into the Massachusetts market. The Oregon Cannabis Company is a vertically-integrated operator led by a sophisticated management team with operational experience gained at JP Morgan, other Fortune 500 companies, and a number of high-growth start-ups. It currently operates multiple cultivation facilities in Oregon, as well as a network of dispensaries, and an e-commerce and delivery platform in the state. Known for its unique and inclusive store branding, the Oregon Cannabis Company has plans for multi-state growth, starting with its expansion into the Massachusetts market.

Pursuant to the LOI, Tidal Royalty will provide the Oregon Cannabis Company with up to US $12.5MM to finance the purchase and construction of a large-scale cultivation and processing facility, and the purchase and construction of 3 dispensaries. In return, the Oregon Cannabis Company will pay Tidal Royalty 15% of all net sales generated by the financed operations in Massachusetts in perpetuity.

"We are very pleased to announce this letter of intent," said Paul Rosen, CEO & Chairman of Tidal Royalty. "This is a team that has built an enviable operation in the ultra-competitive Oregon market. The fact that they've managed to do so with limited resources speaks volumes to the talent and ability of their management team. With Tidal Royalty's financial backing behind them, we expect that they will quickly establish themselves as a formidable competitor in the Massachusetts market."

The Massachusetts adult-use marijuana market has the potential to be one of the most prosperous in the nation, according to Marijuana Business Daily. Massachusetts' regulations took effect on March 29, 2018, and the Cannabis Control Commission began accepting recreational license applications on June 1, 2018. The LOI includes an exclusivity period during which the Oregon Cannabis Company will not negotiate with any other party. It further provides Tidal Royalty with a right of first negotiation on any future financing with respect to the company or any of its affiliates. Closing of the transaction contemplated by the LOI is subject to, among other things, the satisfactory completion of Tidal Royalty's diligence investigation, which is currently underway. Tidal Royalty expects to announce further particulars in respect to the contemplated transaction with the Oregon Cannabis Company upon the execution of a definitive agreement between the parties and the receipt of necessary regulatory approvals. In addition to the LOI with the Oregon Cannabis Company, Tidal Royalty has entered into 2 additional letters of intent and is in the process of evaluating multiple opportunities across the U.S. The company is currently engaged in advanced discussion with counterparties in California, Florida, Arizona, Ohio, Michigan, New York and Nevada. Tidal Royalty intends to provide further particulars on those discussions, as the parties get closer to reaching agreement on definitive terms.

Tidal Royalty has raised approximately $40MM to date by way of private placements, which it intends to use primarily for royalty financings and for general corporate purposes. The company was founded by experienced cannabis industry executives and provides expansion financing to licensed U.S. operators across multiple verticals, including cultivation, processing and manufacturing, dispensing, and ancillary services. Tidal Royalty directs interested stakeholders to visit its website at http://www.tidalroyalty.com to view the company's Corporate Presentation for more details, and the CSE's website to view the company's Listing Statement."

Kush Bottles Inc. (OTCQB: KSHB) is a dynamic sales platform that provides unique products and services for both businesses and consumers in the cannabis industry including cannabidiol manufacturers. Kush Bottles recently announced that it has launched new labeling, printing and in-house application capabilities that will shorten the turnaround time on production, eliminate the need for customers to work with multiple vendors and further reinforce the Company's commitment to being a fully integrated partner for clients. With the new capabilities, Kush Bottles will now have all its own equipment, tooling and materials necessary to process its customers' customized packaging needs. The Company also announced that is has hired packaging industry veteran Mike Alejos as Director of Production to oversee the new labeling capabilities. "The addition of these advanced labeling capabilities speaks directly to the true 'one-stop-shop' nature of Kush Bottles," said Nick Kovacevich, Kush Bottles' Chief Executive Officer. "As we continue to diversify our offerings, we are adding value and economies of scale for our customer base. For example, we can now take what used to be a two-three-week turnaround time and reduce that by up to two-thirds. The more nimble we can be and the more we can take on for our customers, the quicker they can get their products to market."

Vitality Biopharma, Inc. (OTCQB: VBIO) is developing proprietary cannabinoid pharmaceuticals for treatment of serious neurological and inflammatory disorders. The Company recently announced that it has received approval from both the U.S. Drug Enforcement Administration and the State of California Research Advisory Panel, which permit the Company to continue development of its novel cannabinoid pharmaceutical prodrugs. Vitality Biopharma's operations are in compliance with federal controlled substance regulations and are enabling development of a novel class of cannabinoid prodrugs that avoid psychoactivity. The Company's lead compound VBX-100 is a proprietary prodrug of THC that is targeted to the gastro-intestinal tract, meaning it reduces or avoids entry of THC into the bloodstream or brain.  VBX-100 is produced on-site using an enzymatic biosynthesis process and will be produced according to cGMP pharmaceutical standards for use within clinical trials across the United States. Robert Brooke, CEO and Co-founder of Vitality Biopharma adds that, "Our team first pioneered a novel biosynthesis process for our cannabinoid prodrugs, and now they've successfully scaled it in a way that could enable widespread supply for clinical trials and even commercialization."

Auxly Cannabis Group Inc. (OTCQB: CBWTF) operates as a vertically integrated cannabis company. Auxly recently announced that further to its previously announced transaction on February 16, 2018, the Company has entered into a definitive joint venture agreement with Peter Quiring, one of Canada's largest greenhouse builders and operators, via a newly formed subsidiary, to develop, construct and operate a fully-automated, state-of-the-art, purpose-built greenhouse for cannabis cultivation in Leamington, Ontario. The Facility will be designed as a hybrid greenhouse with a supplemental indoor facility to optimize operational efficiencies. The initial phase of the project has been designed with a footprint of 1,400,000 sq. ft. while additional phases of the project contemplate an expansion of up to a total of 2,800,000 sq. ft. JVCo has acquired 100 acres of land for the development of the Facility which is fully powered with sufficient electricity for Phase I and the future expansions. Hugo Alves, President of Auxly, stated: "The combination of being the largest builder of greenhouses in Canada and the experience of operating 175 acres of greenhouses in Canada and the United States, truly places Peter in a league of his own. As a cornerstone partnership in the Auxly platform, JVco is a unique opportunity to achieve large-scale, low cost production of cannabis with one of North America's premier greenhouse operators."

mCig Inc. (OTC: MCIG), headquartered in Jacksonville, Florida, is a diversified company servicing the legal cannabis, hemp and CBD markets. mCig, Inc. announced two weeks ago that its construction and consulting division has secured yet another exclusive management contract with a client in Costa Mesa, CA., bringing its total to three cultivation and manufacturing facilities in cannabis.  mCig's construction and consulting division will now be overseeing operations throughout California in Palm Springs, Sacramento and Costa Mesa.  Under terms of the new management agreement mCig will receive 10% of all proceeds. In addition to the new management agreement, mCig's construction division has begun concept designs for the facility in California City where the Company has a cultivation, manufacturing, and distribution license for cannabis products. Rob Kressa, Grow Contractors CEO, stated, "We continue to grow a highly competitive footprint in the State of California.  We are building a consortium of clients that will provide access across the entire state and connect the many services needed to have a successful and profitable operation, for MCIG and MCIG's clients."

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