Companies Reach an Important Milestone in the Cannabis Market's Development

Thursday, May 9, 2019 General News
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NEW YORK, May 9, 2019 /PRNewswire/ -- Over a dozen countries have already legalized cannabis for medicinal purposes while others have also decriminalized it, allowing for moderate personal consumption. Notably, Canada had moved to legalize cannabis entirely in late 2018. However, despite the

widespread international expansion, the U.S. still dominates the overall cannabis industry. The U.S. has not moved to federally legalize cannabis, but the government has granted states the ability to choose cannabis' legal status for themselves. As a result, over 30 states have legalized cannabis for medical use while 10 states including the District of Columbia have legalized its recreational use. Primarily, states such as California, Colorado, Nevada, and Washington are the primary market drivers. However, emerging states such as Massachusetts, Michigan, and Oregon are also expected to become large marketplaces as states that had legalized recreational use collectively delivered billions of dollars in revenue back in 2017. The opportunities so prevalent in the U.S. have also attracted many international companies. In particular, several cannabis companies have moved to establish operations within the U.S. because of the massive addressable market. On the other hand, Canadian companies are currently facing barriers from the government following its legalization as the Canadian government curtailed retail hours and limited licensing distributions. Nonetheless, the Canadian market is still expected to witness substantial growth as it continues to mature. According to BCC Research, the North American cannabis market was valued at USD 10.7 Billion in 2018. By 2023, the market is expected to reach USD 25.5 Billion while witnessing a CAGR of 18.9% from 2018 to 2023. Trutrace Technologies Inc. (OTC: BKKSF) (TSX-V: TTT), The Supreme Cannabis Company (OTC: SPRWF) (TSX: FIRE), Aleafia Health Inc. (OTC: ALEAF) (TSX: ALEF), Liberty Health Sciences Inc (OTC: LHSIF) (CSE: LHS), Nightfood Holdings, Inc. (OTC: NGTF)

Despite the U.S. representing vast growth opportunities, cannabis companies are still expanding their operations in Canada. According to Arcview Market Research and BDS Analytics, Canada reported legal cannabis sales in the range of USD 755 Million to USD 1.6 Billion. Furthermore, the research suggests that the Canadian legal market is expected to reach USD 7.8 Billion by 2022. On the other hand, U.S. based cannabis companies generated higher gross margins than their Canadian counterparts. Due to the opportunities present in both Canada and the U.S., many companies have established joint operations in both regions. For instance, some companies cultivate cannabis in Canada and distribute within the U.S. or vice versa. However, small-to-mid cap companies are limited in their expansion activities due to their lack of the necessary funds. Therefore, analysts have speculated that the large companies are will acquire or merge with smaller ones. "Companies with unique assets or business models are likely to be more appealing to potential buyers. Different geographies or modes of production are often cited by the buying companies," said Alan Brochstein, Founding Partner of New Cannabis Ventures, "Consolidation is picking up in the cannabis space, and investors are rewarding the companies that are buying by pushing their stocks up after the deals are announced. This will likely encourage other companies to be me more aggressive in their M&A strategies."

Trutrace Technologies Inc. (OTC: BKKSF) (TSX-V: TTT) is also listed on the TSX Venture Exchange under the ticker (TSX-V: TTT). Earlier today, the Company announced breaking news that, "it has entered into a letter of intent dated April 30, 2019 (the "LOI") with Molecular Science Corp. ("MSC"). Under the terms of the LOI, the parties will work together to explore opportunities to combine the blockchain-secured technology of TruTrace with the analytical expertise of MSC in order to deliver greater transparency and visibility around the quality of products being offered in the legal cannabis industry.

'Working with MSC marks a significant step forward for TruTrace in our mission to create a true testing benchmark for the Canadian cannabis market. Its comprehensive process of analytical testing on cannabis and cannabis products, including potency, terpene profiling, pesticide levels, heavy metals content and mycotoxins testing, combined with its commitment to bringing awareness to testing standards, ensures a higher level of quality control for the industry. By combining its services with the StrainSecure™ platform, we anticipate being able to finally create a benchmark for the cannabis industry,' said TruTrace CEO, Robert Galarza.

'MSC's collaboration with TruTrace represents an important step towards establishing and maintaining world-leading standardization and transparency for cannabis quality control in this rapidly-evolving market. The integration of MSC's analytical testing expertise with TruTrace's robust and secure technology platform is an opportunity for both parties to make a significant contribution to this important goal,' said MSC CEO, Christian Carswell.

Terms of the LOI: Under the terms of the LOI, the parties have agreed that: (a) TruTrace will include MSC. as a preferred partner; and (b) the parties will explore development and integration opportunities to utilize their mutual technologies to bring greater transparency and visibility to the legal cannabis industry. The parties have agreed to negotiate, settle and execute a definitive agreement formalizing their relationship (the "Formal Agreement") on or before June 30, 2019. Entry into the Formal Agreement, and the closing of the transactions contemplated in it, are subject to certain conditions, including completion of each party's satisfactory due diligence review of the other.

About TruTrace Technologies: TruTrace Technologies has developed the first integrated blockchain platform to register and track intellectual property in the cannabis industry. TruTrace's technology allows cannabis growers and breeders to identify and secure rights to their intellectual property. It also streamlines the administrative process and reduces the costs of genetic and mandatory quality-control testing for legal cannabis. TruTrace's technology is proprietary, immutable and cryptographically secure, thereby establishing a single-source, accurate, validated and permanent account for cannabis strains from ownership to market."

For our latest "Buzz on the Street" Show featuring Trutrace Technologies Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=S8a4xzdpyzM

The Supreme Cannabis Company (OTCQX: SPRWF) (TSX: FIRE) is a Canadian publicly traded company committed to providing premium brands and products that proudly reflect its consumers, people and uniquely innovative culture. Supreme Cannabis plans to initially ship oil products to select markets before expanding distribution of its cannabis oil line to additional provinces which is expected by the end of June 2019. Each bottle will contain a proprietary blend of highly-purified cannabis oils and terpenes derived from plants grown by 7ACRES. "Premium oils require premium cannabis," said Navdeep Dhaliwal, Chief Executive Officer of Supreme Cannabis. "Our formulation will leverage super-critical CO2technology to produce a high quality, purified cannabis oil which we re-formulate with the naturally occurring cannabis terpenes from our 7ACRES' High-End CannabisTM. The result is a unique, plant-based cannabis oil that carries the award-winning qualities of our flower into an oil product for consumers looking for a premium cannabis oil experience."

Aleafia Health Inc. (OTCQX: ALEAF) (TSX: ALEF) is a leading, vertically integrated cannabis health and wellness company with four primary business units. Aleafia Health Inc. recently entered the German medical cannabis market via its joint-venture with German pharmaceutical wholesaler Acnos Pharma GmbH, together. The JV entity will purchase Aleafia Health branded cannabis oils for distribution to German pharmacies and for clinical trial usage. Aleafia Health's wholly-owned subsidiary Emblem Cannabis Corp. is the majority shareholder of the JV with 60% ownership with Acnos owning the remaining 40%. The Parties have expanded the scope of the previously announced JV formed by Acnos and Emblem, by leveraging the significantly increased access to dried flower and extraction available to the combined entity. The German medical cannabis market has grown rapidly since legalization in 2017, and is projected to produce revenues of USD 5 Billion in 2025 for cannabis producers, according to a report by Bank of Montreal. Market advantages in Germany include significantly higher margins compared to the Canadian market and reimbursement of patient purchasing costs through private and public health insurance, which is almost entirely non-existent in North America. "We are delighted to soon see the export of our cannabis health and wellness products to the world's largest medical cannabis market in Germany," said Aleafia Health Chairman Julian Fantino. "By leaning on our own core competencies of producing high-margin value added products and leveraging the local supply chain expertise of our outstanding partners, we have significantly strengthened our international footprint and done so faster and at a fraction of the cost of an acquisition."

Liberty Health Sciences Inc (OTCQX: LHSIF) (CSE: LHS) is the cannabis provider committed to providing a trusted, high quality cannabis experience based on our genuine care for all cannabis users and a focus on operational excellence from seed to sale. Liberty Health Sciences Inc. recently announced that it opened its 14th Florida dispensary in Cape Coral's South Cape business district on Friday, May 10th, subject to Florida Department of Health approval. This is the first medical facility to open in Cape Coral and Liberty's second dispensary to open in Lee County. The 3,380 sq. ft. facility includes innovative shopping displays that engage and educate patients, two private consultation rooms and a large waiting room where patients, physicians and community members can learn about the benefits of medical cannabis. The dispensary is also equipped to offer drive-through services for its patients. "We anticipate strong patient demand in the Cape Coral area, which is supported by a large population of potential patients living in Southwest Florida who can take advantage of our exceptional customer service and educational resources," said Victor E. Mancebo, interim Chief Executive Officer of Liberty. "There are many retirees living in our service area who can benefit from our products and Cape Coral is also one of the fastest growing cities in Florida. Already patients and the city of Cape Coral are embracing our presence and we are excited to provide the community with our premium medical marijuana products."

Nightfood Holdings, Inc. (OTCQB: NGTF), owns Nightfood, Inc. and MJ Munchies, Inc. MJ Munchies, Inc., a subsidiary of Nightfood Holdings, Inc. and Global Consortium, Inc. (OTC:GCGX) recently announced that the parties had entered into a Letter of Intent whereby Global Consortium subsidiary Infused Edibles would receive an exclusive license to manufacture and distribute marijuana and CBD-infused products under the Half-Baked™ mark owned by MJ Munchies. With commercial brands in the marijuana space increasingly frustrated by restrictive government advertising policies, both companies believe having the right brand name provides a distinct competitive advantage at retail in this rapidly-growing market. "We're excited to work with a company that shares our vision for national awareness and distribution," added MJ Munchies Chief Executive Officer Sean Folkson. "They have a track record of success in manufacturing and distributing a varied line of products that succeed at retail. We've been working on this for some time, which is why we have not been commenting publicly about the MJ Munchies side of our company. Now, the broad strokes are in place, and we're going to work together to quickly finalize the agreement."

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