The Value of Legal Cannabis Market Projected to Grow

Tuesday, May 15, 2018 Drug News
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NEW YORK, May 15, 2018 /PRNewswire/ --

According to data published

by Energias Market Research, the global medical cannabis market is projected to grow significantly from USD 8.28 billion in 2017 to USD 28.07 billion in 2024 and at a CAGR of 19.1% from 2018
to 2024. There are several factors driving the advances of the medical cannabis market, including increasing recognition of medical benefits, stronger demand for cannabis in the treatment of various diseases, and rising number of research and development activities. Sales of cannabis products for adult-use (recreational) are also expected to increase, as California's new cannabis laws went into effect earlier this year. While California is the largest market, Canada is projected to show strong sales as well. Deloitte's report projects the Canadian market will be worth at least $5B in sales in 2018. Scythian Biosciences Corp (OTC: SCCYF), Cara Therapeutics Inc. (NASDAQ: CARA), Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE), Cronos Group Inc. (NASDAQ: CRON), Aurora Cannabis Inc. (OTC: ACBFF)

Viridian Capital President Scott Greiper told Benzinga that the cannabis industry received $1.23 billion investments in the first five weeks of 2018, up from $178 million a year earlier. Viridian Capital Advisors' Vice President Harrison Phillips said: "Investments in cultivation and retail this year have been driven predominantly by the Canadian player. This has been happening pretty consistently from late 2016 through 2017. This reflects the necessity to scale cannabis businesses, to get some kind of advantage, and to explore strategic opportunities, both through acquisitions and international expansion."

Scythian Biosciences Corp (OTCQB: SCCYF) is also listed on the TSX Venture Exchange under the ticker (TSX-V: SCYB). Just last week the company announced breaking news that, "the Company has entered into a business combination agreement (the "Agreement") with MMJ International Investments Inc. ("MMJ" or "MMJ International"), owner of Argentina-based ABP S.A. ("ABP"), a pharmaceutical import and distribution company with a license to import, sell and distribute medical products and derivatives in Argentina. ABP also holds a license to import CBD oil into Argentina (the "License"). Under the terms of the Agreement, Scythian will acquire all of the issued and outstanding common shares of MMJ by way of a three-cornered amalgamation (the "Transaction") whereby MMJ will amalgamate with a wholly-owned subsidiary of the Company. In consideration, Scythian will issue an aggregate of 6,176,320 common shares of the Company to the shareholders of MMJ. The Agreement supersedes the non-binding letter of intent between Scythian and MMJ previously announced on March 12, 2018, which was extended on March 29, 2018, and extended again on May 1, 2018.

The Transaction is subject to a number of conditions, including approval of the shareholders of MMJ and approval from the TSX Venture Exchange ("TSXV"). The Transaction will not constitute a "Reverse-Takeover" of Scythian under the policies of the TSXV. "With this Agreement, Scythian now has access to Argentina's network of hospitals, doctors, retail pharmacies, private health providers and public health system," said Rob Reid, CEO of Scythian. "We are thrilled to have accomplished this significant step forward in the Company's expansion efforts and are eager to work with MMJ to develop quality medical cannabis backed by Argentina's top health researchers and institutions."

ABP has had a strong platform from its distribution and retail business to build on, having had revenues in excess of USD$10,000,000 per year since 2014, with over USD$11,000,000 in 2017. Scythian, working with ABP, will focus on continuing to build out ABP's distribution and retail sales network, while strategically leveraging the License for expansion purposes.

On April 9, 2018, Scythian announced that ABP had received its license to import CBD oil for research and development purposes. Shortly after this, ABP issued its first purchase order of CBD oil from Aphria Inc. ("Aphria") to be imported into Argentina for use in pioneering clinical studies conducted by Argentina's top neurologists and pediatric specialists at the Dr. Juan P. Garrahan Pediatric Hospital. The study, which will be conducted over 2.5 years, is investigating the use of cannabis in treating refractory epilepsy in children and will determine the product's pharmacokinetics for the optimization of dosage in future treatments. Additionally, with the support of Scythian and ABP, a training program will be conducted during and after the study to train and educate a network of specialized doctors across multiple provinces in Argentina using Aphria's pharmaceutical grade medical cannabis.

"Now that a binding agreement to acquire MMJ International has been finalized, we can focus our efforts on the research and development of pharmaceutical grade medical cannabis in South America," said CEO Rob Reid. "We are eager to begin making a positive global impact on the lives of countless patients in need."

Cara Therapeutics Inc. (NASDAQ: CARA) is a clinical-stage biopharmaceutical company focused on developing and commercializing new chemical entities designed to alleviate pruritus and pain by selectively targeting peripheral kappa opioid receptors (KORs). Cara is developing lead molecules that selectively modulate peripheral CB receptors without targeting CNS cannabinoid receptors. The main naturally occurring ligands for this system, anandamide and 2-arachidonoylglycerol (2-AG), activate a number of cannabinoid receptors, including CB1 and CB2 receptors. Cara's most advanced CB compound, CR701, is in preclinical development.

Zynerba Pharmaceuticals, Inc. (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. Recently, the company reported financial results for the first quarter ended March 31, 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 primary and key secondary endpoints for the study will assess observable behaviors in patients with FXS as reported by the caregiver using certain subscales of the validated Aberrant Behavior Checklist in Fragile X syndrome (ABC-FXS). Data are expected in 2019. FXS affects approximately 71,000 people in the U.S. It is the leading known cause of inherited intellectual disability and Autism Spectrum Disorder, with symptoms including significant behavioral, social and cognitive deficits.

Cronos Group Inc. (NASDAQ: CRON) is a globally diversified and vertically integrated cannabis company with a presence across four continents. The Company operates two wholly-owned Canadian licensed producers regulated under Health Canada's Access to Cannabis for Medical Purposes Regulations: Peace Naturals Project Inc., which was the first non-incumbent medical cannabis license granted by Health Canada and Original BC Ltd. (British Columbia), which is based in the Okanagan Valley. On April 30, 2018, the company announced financial results for the fourth quarter and fiscal year ended December 31, 2017. Sales increased by $3.5 million, or 636%, to $4.1 million in FY 2017. The Company completed significant improvements to the three pre-existing indoor production facilities at Peace Naturals Project Inc., to increase production capacity and efficiency. These facilities are now fully operational. Construction of building 4, a 286,000 sq. ft. production facility, remains on schedule and production is expected to commence in the second half of 2018.

Aurora Cannabis Inc. (OTCQX: ACBFF) and MedReleaf Corp. on Monday announced that they have entered into a definitive arrangement agreement whereby Aurora intends to acquire all of the issued and outstanding common shares of MedReleaf in an all-share transaction valued at approximately C$3.2 billion on a fully diluted basis. The proposed Transaction brings together two of Canada's premier cannabis companies with fully-aligned strategic visions and production philosophies, as well as complementary assets, distribution networks, products, and capabilities. The combined company will meet what Aurora and MedReleaf management teams consider to be the critical success factors in the industry, creating a powerful platform for accelerated growth on a global scale.

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