CannabisNewsWire
Editorial Coverage: With the announcement in April of the
Industrial Hemp Farming Act of 2018, the industry could be looking
at a federal redefinition of hemp. Industrial hemp is a great
source for CBD (cannabidiol), a non-psychoactive cannabinoid with
numerous medical applications ranging (http://cnw.fm/7tqIy). U.S. market projections for hemp
range from $1.9 to $2.1 billion within the next two years and could
hit $3 billion by 2021, according to one industry analyst (http://cnw.fm/MLA5w). This is great news for
well-positioned sector players such as Marijuana Company of
America (OTC: MCOA) (MCOA
Profile), which recently executed a
sizeable hemp-cultivation JV agreement. Other similarly positioned
companies, such as Vancouver’s Aurora Cannabis, Inc.
(ACB.TO) (OTCQX: ACBFF), UK-based GW
Pharmaceuticals Plc (NASDAQ: GWPH), Medical
Marijuana, Inc. (OTC: MJNA) and Rocky Mountain
High Brands, Inc. (OTCQB: RMHB), are also in position to
exploit the burgeoning CBD market.
If passed alongside companion House Bill 5485, the Hemp Farming
Act would effectively remove hemp from regulation as a controlled
Schedule 1 substance, restoring the plant’s historic status as an
important U.S. agricultural commodity. With Senate Minority Leader
Chuck Schumer and fellow Democrat Senator Michael Bennet from
Colorado signing on to the Hemp Farming Act with Republican Senator
Cory Gardner from Colorado, the bill now looks to have strong
bipartisan support. A recent report from Brightfield Group issued
prior to the announcement of the Hemp Farming Act estimated that
the hemp-derived CBD products component of the hemp market alone
could hit $1 billion by 2020 (http://cnw.fm/Z9l9K). Industrial hemp has a storied
history in America, having been cultivated from Colonial times
through World War II and being essential to war efforts throughout
that period. Given that the plant is a robust source for strong
natural fiber and oils used to make everything from canvas and rope
to building materials and fuel, it seems likely that the nation
will indeed see the plant returned to its historical status as a
core agricultural commodity.
Cultivation and Legal CBD Enable Agile
Positioning
In an industry run by pioneering industry veterans who have
lived through the legislative ups and downs that have ebbed and
flowed since the earliest days of the cannabis market, the looming
passage of the Cannabis Act in Canada and the potential of
legislation such as the Marijuana Justice Act in the United States
are encouraging signs that the industry has rounded the corner into
the home stretch on legalization. CEO of Marijuana Company
of America (MCOA
Profile) Don Steinberg actually
founded the first publicly traded U.S. marijuana company, Medical
Marijuana Incorporated. MCOA already has a strong
hand in the rapidly emerging market for industrial hemp-based CBD
products, as well as its strategic cultivation-focused JV with
B.C.-based Global Hemp Group that began in New Brunswick Canada
last year and which has now expanded to 125 acres of commercial
production.
The tip of the spear for MCOA in CBD is wholly
owned subsidiary hempSMART™, whose affiliate
marketing program and shrewdly engineered networking architecture,
as well as upcoming major marketing campaigns that include a sixty
second are designed to not only capture maximum market share but
bolster customer retention as well. An offering such as hempSMART’s
patent-pending “hempSMART Brain” product, which is designed to
support healthy brain function, is an arguably compelling
exploitation of CBD’s increasingly apparent antioxidant and
neuroprotective functions (http://cnw.fm/Vh8bo).
Capacity Is Key Moving Forward
The recent JV agreement between MCOA and Global
Hemp Group (which also has base operations in Montreal and Los
Angeles) focused on cultivation of legal, high-yielding CBD from
industrial hemp at a newly acquired 109-acre farm in Scio, Oregon.
This move should significantly enhance the company’s market
presence (http://cnw.fm/Owe9r). With the purchase of 20,000
high-yield CBD clones along with onsite clone production to meet an
early June planting schedule target, assessment of key greenhouse
technologies needed to maximize floor space and enable the JV’s
perpetual harvest model, as well as the purchase of an additional
12,096 square feet of greenhouses for an intial total of nearly
20,000 square feet of production space, the JV is well on its way
to having a superb high-yield CBD project in one of the country’s
most cannabis-friendly states.
Additionally, the company recently announced completion of an
initial 10,000 square foot greenhouse just south of the Canadian
border in Washington State, developed via JV with agricultural
services company Bougainville Ventures (http://cnw.fm/m8GaT). This first leg of a planned
30,000-square-foot facility is a major step towards realizing a
sizeable production facility in a key jurisdiction that will become
the home of several licensed tenants that will be looking for just
such an ideal turnkey solution to satisfy their growing needs.
Sector Outlook Grounded in CBD and
Biopharma
A strong footing in the already legal CBD market with the
infrastructure to also potentially supply the growing medical and
recreational markets throughout North America has put
MCOA on the radar of many sector analysts. Savvy
investors will want to compare the company’s rapidly expanding
footprint with that of other sector players that also stand to
benefit from pending legislative reform.
Aurora Cannabis, Inc. (ACB.TO) (OTCQX: ACBFF),
a licensed Canadian producer of medical cannabis, recently
estimated that it will surpass 90,000 kg of output by the end of
this year and see revenues of around $70 million. With an
800,000-square-foot flagship facility at the Edmonton International
Airport (estimated to be able to produce 100,000 kg of cannabis a
year at full capacity), a 55,200-square-foot facility in Alberta,
and another 40,000-square foot facility in Quebec, Aurora is
uniquely positioned to become a major supplier that may even
surpass rival Canopy Growth (WEED.TO) (OTC: TWMJF), which recently
moved to list its shares on the NYSE. Moreover, Aurora’s plan to
buy all common shares of MedReleaf (LEAF.TO) (OTC: MEDEFF), if
approved, would create a true industry juggernaut, one estimated by
financial services firm Canaccord Genuity to have the potential to
eventually produce a whopping 570,000 kg of cannabis per year.
GW Pharmaceuticals Plc (NASDAQ: GWPH) is one of
the most well-established cannabis biopharmaceutical companies in
the space today, boasting a proprietary cannabinoid product
platform that has given rise to such highly publicized indications
as the anti-seizure CBD-based drug Epidiolex®. Along with its U.S.
subsidiary Greenwich Biosciences, the company recently announced
publication in The New England Journal of Medicine of
Phase 3 study results of its oral CBD drug in a form of rare
childhood-onset epilepsy known as Lennox-Gastaut syndrome. Many
sector analysts argue that the NDA for GWPH’s oral CBD solution in
Lennox-Gastaut and (similar) Dravet syndromes is likely to be
approved by the FDA. Such an approval would mean the drug could
become available by prescription in the the United States in the
second half of 2018.
Medical Marijuana, Inc. (OTC: MJNA) portfolio
companies Hempmeds®, Kannaway and Kannalife™ Sciences have been
receiving more and more coverage of its internationalized
distribution of products such as Real Scientific Hemp Oil™. The
company’s CEO, Dr. Stuart Titus, was recently featured as part of a
Buzzfeed article on CBD that reached a massive audience, even as
the company’s portfolio company, HempMeds Brasil, was in the news
for sponsoring the upcoming medical marijuana-focused “A Look into
the Future” International Medicinal Seminar. That announcement came
just days after the news that HempMeds has partnered with
Northshore Pharmacy in Bermuda to sell the company’s flagship CBD
oil products.
Rocky Mountain High Brands, Inc. (OTCQB: RMHB)
recently announced that hemp products in its new and cutting-edge
CBD-infused product line, known as HEMPd, are available for
purchase on both Amazon and eBay. The company’s popular and
naturally flavored energy drinks, Rocky Mountain High Hemp Infused
Beverages, have been doing solid business in Canada since the
initial one million can order shipped back in 2016. Rocky Mountain
High is looking forward to potentially enjoying some serious
momentum as Canada moves towards legalization, with one of the most
widely recognized brands today in functional hemp food and drink. A
roughly $3.6 million deal executed late last year with a major food
and beverage distributor in Mexico, where marijuana is soon to be
legalized, means RMHB looks to be well on its way to becoming one
of the leading hemp-infused food and beverage purveyors on
earth.
Sector Sentiment Appears Positive to Many
Analysts
While there were major concerns for the cannabis sector last
year and earlier this year, companies poised to exploit CBD and
broader cannabis demand are eyeing the softening tone in the United
States, as well as forthcoming Canadian legalization of all
cannabis, as major boons to the industry. For a company such as
MCOA, which has good access to the North American market and an
established presence in CBD, the best may be yet to come.
For more information about Marijuana Company of America, please
visit Marijuana
Company of America (MCOA).
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