Cannabis Industry issued the following announcement on June 28.
Most regions around the world allow young adults at the age of 18 to enjoy or purchase their own alcohol and tobacco. However, the U.S. has strictly enforced that adults must be 21 years old or older in order to purchase alcohol. Meanwhile, some parts of the U.S. have also implemented a mandated age of 21 years or older to purchase tobacco. The U.S. government strongly believed that if the minimum age requirement was raised to 21 it would reduce the number of young adults drinking or smoking. However, Mike Males, a Senior Researcher for San Francisco's Center on Juvenile and Criminal Justice, highlighted that changing the age limit has little to no effect in the reduction of underage users. Additionally, teenagers are more likely to obtain their supply from an illegal source and consequently, teenagers are more likely to drink or smoke in excess. Similarly, as the legal cannabis market begins to take off, lawmakers are approaching the industry with caution. In U.S. states where cannabis is legal for adult-use strictly only allow adults 21 years old and over to purchase any cannabis-based products. On the other hand, Canada allows consumers 18 years old and older (19 years old in some provinces) to purchase cannabis-based products. The age difference between the two countries allows Canada to minimize the illicit trade market. Additionally, setting the legal age at 18 years old would also open a whole new demographic of young adults, expanding the market penetration even further. Following Canada's complete legalization of cannabis, the adult use market is positioned to become a major growth factor for the overall industry. In 2018, adult use cannabis sales totaled USD 112.5 Million and are projected to reach USD 4.8 Billion by 2024. Furthermore, the medical cannabis segment is expected to decline at a CAGR of 3% at the legal adult use market continues to ramp up over the next shortcoming years. According to data compiled by ArcView Market Research and BDS Analytics, the overall Canadian legal cannabis market was valued at USD 569 Millionin 2018. By 2024, the market is expected to reach USD 5.2 Billion while accelerating at an explosive CAGR of 44.4%. MediPharm Labs Corp. (OTC: MEDIF) (TSX-V: LABS), Innovative Industrial Properties, Inc. (NYSE: IIPR), Tilray, Inc. (NASDAQ: TLRY), Akerna Corp. (NASDAQ: KERN), Pyxus International Inc. (NYSE: PYX)
As the legal cannabis market continues to mature, more and more consumers are trying cannabis for the first time. Notably, more people are trying cannabis first before smoking a cigarette, according to Newsweek, citing a study by the National Institute of Child Health and Human Development. The survey discovered that 8% of the 275,000 respondents ages between 12 and 21 reported that marijuana was the first substance they ever tried, representing a jump from 4.8% in 2004. The researchers attributed the increase to the declining rate of smokers as well the larger number of people abstaining from substance use in general. Predominantly, the decrease in young adult smokers is playing a large role within the cannabis industry, as the percentage fell from 21% in 2004 to 9% in 2014. While the study covers a wide range group among teenagers and young adults, the National Institute on Drug Abuse reported that marijuana is the most prevalent among ages 18 to 25, followed by adults ages 26 or older. Approximately 22% of young adults between the ages of 18 to 25 are exposed to cannabis on a monthly basis, while more than half try it within their lifetimes. As legalization continues to progress throughout the world, even more people are expected to try cannabis for the first time. Nonetheless, cannabis has already made a deep global impact as many countries have already adopted medicinal cannabis legislation. Moreover, the recreational cannabis market is also continuing to thrive, largely due to the U.S. and Canadian markets. "In 2018, Canada legalized recreational marijuana use nationwide. In the months since, the industry has had its ups-and-downs. Despite supply shortages and confusing provincial laws, the demand for legal weed and the long-term upside has not diminished," said Verdantis Advisors in a blog post. "With nationally legalized cannabis, Canada is unleashing a whole new industry that is reshaping its economy."
MediPharm Labs Corp. (OTCQX: MEDIF) (TSX-V: LABS) is also listed on the TSX Venture Exchange under the ticker (TSX-V: LABS). Yesterday, the Company announced that, "its wholly owned subsidiary, MediPharm Labs Inc., has entered into purchase agreements to secure a substantial 9,000 KG of dried cannabis supply from multiple cultivators in the last three weeks in June. In addition to MediPharm Labs' ongoing procurement of cannabis biomass for existing contracts, this bulk purchase is expected to contribute to increased production for future sales and position the Company to meet the mandatory minimum monthly volume requirements to win new large white-label contracts.
At the half year mark in 2019, and only seven months since receiving its sales license, MediPharm Labs has expanded its cultivation relationships to secure and scale up its own supply of dried cannabis that has also increased the total market supply of cannabis concentrates for white label, value-add products including bottled oil, gel caps and upcoming vape pen devices to be legalized later this year.
'With the increasing availability of bulk supply and our ongoing dried cannabis supply purchases, we are well positioned to significantly increase quarterly production over and above our existing contracts, which we expect to translate into additional sales from new white-label contracts that require substantial volumes monthly,' said Patrick McCutcheon, Chief Executive Officer of MediPharm Labs. 'As the industry continues to mature, with additional cultivation supply sources coming online, we continue to focus on building on our specialized extraction skill set to provide a stable source of high quality, cannabis concentrates for the growing demand of value-add concentrate based products for medical and recreational consumers.'
'We look forward to further diversifying relationships with new cultivation partners, including outdoor grows, who continue to focus on producing high quality active cannabinoid flower at lower costs over the long term.'
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Innovative Industrial Properties, Inc. (NYSE: IIPR) is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. recently announced that it closed on the acquisition of a property in Harrison, Michigan, which comprises approximately 45,000 square feet of industrial space. The purchase price for the Michigan property was approximately USD 6.9 Million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with an affiliate of Emerald Growth Partners L.L.C. (EGP), which intends to operate the property as a licensed medical-use cannabis cultivation and processing facility upon completion of redevelopment. EGP is expected to complete tenant improvements for the building, for which IIP has agreed to provide reimbursement of up to approximately USD 3.1 Million. Assuming full reimbursement for the tenant improvements, IIP's total investment in the property will be approximately USD 10.0 Million. "We are pleased to add EGP and its strong management team to our premier tenant roster," said Paul Smithers, President and Chief Executive Officer of IIP. "EGP is well-positioned for success, with its depth of industry experience and expected large-scale vertical integration, and we look forward to supporting EGP through the redevelopment of the Harrison facility and the launch of its Pleasantrees retail locations throughout the state."
Tilray, Inc. (NASDAQ: TLRY) is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids currently serving tens of thousands of patients and consumers in 12 countries spanning 5 continents. Tilray, Inc. recently announced that its wholly-owned subsidiary Tilray Portugal Unipessoal Lda. has received a standard manufacturing license and a Good Manufacturing Practices (GMP) certification, in accordance with the European Medicines Agency's (EMA) standards, for its Biocant Park manufacturing facility in Cantanhede, Portugal. This license and certification allow Tilray Portugal to manufacture and export GMP-certified dried cannabis as an active substance for medicinal products. Tilray's EU Campus in Portugal is a multi-faceted production facility that includes indoor, outdoor and greenhouse cultivation sites; research and quality control labs; as well as processing, packaging and distribution sites for medical cannabis and cannabinoid-containing medical products. To date, Tilray has invested approximately EUR 20 Million in the facility, which totals nearly 250,000 sq. ft. with additional room to expand. The site also serves as a hub supporting Tilray's clinical research and product development efforts across Europe. The Tilray EU Campus currently employs over 100 people, and that number is expected to double by the end of 2019, with production ramping up and multiple harvests anticipated in the coming months. An official ribbon-cutting ceremony celebrating the inauguration of Tilray's EU Campus was hosted in April 2019. "This licensing and certification marks a critical milestone for our growth in Portugal and Europe. We're proud to increase our international export capacity and are looking forward to exporting dried cannabis as active substances from our EU Campus to legal jurisdictions in the EU and other international markets," said Sascha Mielcarek, Managing Director, Europe. "The next phase of GMP certification will allow us to utilize the full capacity of our multi-faceted facility and continue to serve more patients in-need."
Akerna Corp. (NASDAQ: KERN) was created by the merger of MTech Acquisition Corp. and MJ Freeway LLC. MTech Acquisition Corp. (NASDAQ: MTEC), the first US-listed Special Purpose Acquisition Company (SPAC) focused on acquiring a business ancillary to the cannabis industry, and MJ Freeway LLC, a leading seed-to-sale regulatory compliance technology provider and developer of the cannabis industry's first enterprise resource planning (ERP) platform, announced they have completed their previously announced business combination, becoming the first compliance technology company in the cannabis space to be traded on Nasdaq. Akerna is a regulatory compliance technology company in the cannabis space. The cornerstones of Akerna's service offerings are MJ Platform® and Leaf Data Systems®, which are highly-versatile platforms that provide clients and government entities with a central data management system for tracking regulated cannabis products, from seed to product to shelf to customer, through the complete supply chain. Since establishment in 2010, the Company has tracked more than USD 15 Billion in cannabis sales. As part of its business strategy, Akerna intends to grow through targeted, strategic acquisitions that are complementary to its current business and organically by accelerating its product development efforts. Akerna is based in Denver. MJ Freeway Co-Founder & Chief Executive Officer Jessica Billingsley will lead Akerna and is the first Chief Executive Officer to bring a regulatory compliance technology company in the cannabis space to Nasdaq. She stated, "As legalization of cannabis expands across the world, we believe it is imperative that businesses, patients, consumers, and governments have the tracking and compliance technology they need to make informed decisions and comply with applicable regulations. We believe Akerna is well suited to meet these needs with the ability to scale rapidly across the world and offer a robust and innovative platform for growing industry demands."
Pyxus International Inc. (NYSE: PYX) is a global agricultural company with 145 years' experience delivering value-added products and services to businesses and customers. Pyxus International, Inc. recently announced the opening of its affiliate, Criticality, LLC's, industrial hemp extraction and purification facility located in Wilson, North Carolina. The 55,000 sq. ft. state-of-the-art facility was unveiled during a ribbon cutting ceremony and grand opening event on March 12th. The facility is designed to follow good manufacturing practices and operate in compliance with dietary supplement standards. The hemp processed at the facility will be used to expertly craft and responsibly produce "Korent," Criticality's line of cannabidiol oil (CBD) products, as well as develop new products in its innovation pipeline. "Through our investment in Criticality—a North Carolina-based hemp processor—our goal is to become a leader in the production of CBD and related consumer products," said Pyxus President, Chief Executive Officer and Chairman Pieter Sikkel. "The opening of the facility is a critical step in achieving that goal and is a glimpse of what's to come in the future."
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