The Growth of Legal Cannabis Markets are Exceeding Expectations

Wednesday, June 27, 2018 Drug News
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NEW YORK, June 27, 2018 /PRNewswire/ --

According to data reported

by Arcview Market Research, consumer spending on legal cannabis in North America is outpacing previous estimates. The report emphasizes that retail cannabis sales will grow 33% from 2016, to about USD
10 Billion
this year. The data shows that by 202, the legal cannabis market will reach a value of USD 24.5 Billion and grow at a 28% compound annual growth rate (CAGR). Arcview also stated that the growth of the legal cannabis industry is expected to re-accelerate this year, as adult-use sales ramp up in Canada, California, and Massachusetts, along with first time medical sales in Florida. Tidal Royalty Corp. (CSE: RLTY), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF), Zynerba Pharmaceuticals (NASDAQ: ZYNE), Cronos Group Inc. (NASDAQ: CRON), CV Sciences, Inc. (OTC: CVSI)

On June 19th, 2018, Canada passed a nationwide legalization of recreational cannabis usage, following Uruguay to become just the second nation to do so. According to the New York Times, Tony Dean, the Senator who sponsored the bill in the Chamber, said that, "We've just witnessed a historic vote for Canada, the end of 90 years of prohibition. Now we can start to tackle some of the harms of cannabis." Mr. Dean continued, "We can start to be proactive in public education. We'll see the end of criminalization and we can start addressing Canada's USD 7 Billion illegal markets."

Tidal Royalty Corp. (CSE: RLTY) just announced late yesterday breaking news that, "CEO & Chairman Paul Rosen appeared on BNN Bloomberg's Commodities program today to discuss the cannabis sector. In a wide-ranging interview with BNN Bloomberg's Andrew Bell, Mr. Rosen discussed his investment thesis, the cycling of capital from the Canadian market to the U.S., and the likelihood of industry consolidation. "We are moving capital to the U.S. cannabis industry in order to duplicate the outsized returns that we were able to achieve in Canada," Mr. Rosen stated. "The parabolic returns that we've been able to achieve in Canada likely will not be achieved going forward as our industry matures, and we see the U.S. cannabis industry as the next great cannabis economy to invest in."

Mr. Rosen is a noted cannabis entrepreneur. He co-founded The Cronos Group, where he served as President and CEO for three years. Mr. Rosen sits on the Board and chairs the Audit Committee of iAnthus Capital Holdings, a publicly-traded New York-based investment bank, sits on the Board of Hill Street Beverages, and acts as an advisory to several companies in the industry. 

"It is our opinion that the Canadian cannabis market is fully-priced, and that outsized returns will come from the U.S. regulated industry. The market opportunity in the U.S. is significant and, in many respects, is reminiscent of the early-stage investment opportunities in Canada in 2012 that we were able to capitalize upon," Mr. Rosen stated after the show. "Tidal Royalty was created to leverage what we learned in Canada and apply it to the U.S. market. The Tidal Royalty team has spent the last 11 months travelling across the U.S., meeting with over 100 licensed operators in virtually every state that has a regulated cannabis industry. Our pipeline of opportunities to fund high-caliber operators across nearly a dozen key U.S. states continues to grow and we anticipate that will only increase."

Tidal Royalty was founded by experienced cannabis industry executives to provide expansion financing to licensed U.S. operators across multiple verticals, including cultivation, processing and manufacturing, dispensing, and ancillary services. The company 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. It recently announced the addition of Hugo Alves (President of Auxly Cannabis Group) and Marc Lustig (CEO of CannaRoyalty) to its Advisory Board, among others. The episode of Commodities aired on BNN Bloomberg on June 26, 2018 at 11:30 am ET. It can be viewed in its entirety on BNN Bloomberg's website at https://www.bnnbloomberg.ca/commodities/video/the-outlook-for-cannabis-m-a~1426479.

About Tidal Royalty - Tidal Royalty provides royalty financing to the U.S. regulated cannabis industry. Led by an executive team with extensive industry experience in Canada and the U.S., Tidal Royalty provides operators with the funding they need to grow their business. Operators benefit from non-dilutive capital and investors get top-line access to a diversified portfolio of companies that will form the future of this transformative industry.

The Green Organic Dutchman Holdings Ltd. (OTCQX: TGODF) is a research & development company licensed under the Access to Cannabis for Medical Purposes Regulations to cultivate medical cannabis. Recently, the Company announced that it has decided to add a 287,245 sq ft. purpose-built facility on its Valleyfield property capable of producing 40,000 kgs of premium organic cannabis. This facility will be dedicated to TGOD's Beverage Division and increases the Company's fully-funded capacity to 170,000 kgs. This newly dedicated cultivation building is being constructed to support TGOD's previously announced, Beverage Division Global-Strategic-Launch-Into-the-Beverage-Industry. This includes a state-of-the-art manufacturing campus, designed to conduct strain-specific studies, develop organic IP, and create consumable optimized CBD / THC strains. Due to operating efficiencies within the 72.4-acre Valleyfield property, permits and cultivation licenses granted, the Company anticipates a significantly reduced construction timeline and budget. The Company will build this facility using excess cash raised in its IPO and subsequent bought deal financings. With the synergies to be realized on the existing 72.4-acre Valleyfield property, the construction timeline and unit costs for this additional building enhance the overall economics of the entire facility. Zynerba Pharmaceuticals (NASDAQ: ZYNE) is a clinical-stage specialty neuropsychiatric pharmaceutical company dedicated to developing and commercializing innovative pharmaceutically-produced transdermal cannabinoid treatments for rare or near-rare neuropsychiatric disorders with high unmet medical needs. The Company recently reported its financial results for the first quarter, ended March 31st, 2018, and provided an overview of recent operational highlights. The Company expects to enroll approximately 200 pediatric and adolescent patients in the U.S., Australia and New Zealand into a single pivotal study to support an NDA for ZYN002 in FXS. The oral presentation will describe data from the FAB-C (Treatment of Fragile X Syndrome Anxiety and Behavioral Challenges with CBD) study that highlight the short- and long-term positive impact of ZYN002 on children and adolescents with Fragile X syndrome (FXS).

Cronos Group Inc. (NASDAQ: CRON) is a globally diversified and vertically integrated cannabis company with a presence across four continents. Cronos Group Inc. announced on June 25th, 2018, that it has entered into a strategic distribution partnership with Delfarma Sp. Zo. Founded in 2004, Delfarma is a privately owned pharmaceutical wholesaler and was the first company in Poland to introduce international parallel import of medicinal products from European Economic Area countries. Delfarma distributes directly to over 5,000 pharmacies and more than 200 hospitals, a distribution network that reaches approximately 40% of the Polish domestic market. Under the initial five-year exclusive distribution agreement, Cronos Group's global subsidiaries will supply Peace Naturals branded cannabis products to Delfarma for distribution within Poland. Leveraging Delfarma's extensive distribution network, this partnership provides Cronos with unrivaled access to the Poland market.

CV Sciences, Inc. (OTCQB: CVSI) operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors. CV Sciences, Inc., recently announced the publication of the toxicology and safety results of an extract from the base raw materials used in its market leading PlusCBD Oil™ consumer products. The Company contracted respected scientific and regulatory consulting firm, AIBMR Life Sciences, Inc., to conduct the battery of toxicological studies to investigate the safety of oral consumption of the Company's hemp cannabidiol (CBD) oil and to support a Generally Recognized as Safe (GRAS) Independent Conclusion. The monumental study entitled, "An Assessment of the Genotoxicity and Subchronic Toxicity of a Subcritical Fluid Extract of the Aerial Parts of Hemp" concluded that the test article was non-mutagenic, non-clastogenic and non-genotoxic.

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