How the Cannabinoid Industry is Evolving with Growing Biotech Influence

Palm Beach, FL – June 9, 2020 – The impending marriage of the biotech industry and the legal (i.e. medical) cannabis industry is looking like it will be a long and happy marriage. As the use of legal marijuana grows globally, the medicinal (as opposed to recreational) revenues will continue to grow and become the dominant share of the legal marijuana market.  According to Grand View Research the global legal marijuana market size is expected to reach USD 73.6 billion by 2027. It is anticipated to expand at a CAGR of 18.1% during the forecast period. Increasing legalization of cannabis for medical (as well as adult-use) is expected to promote growth.  On the basis of type, the medical segment held the leading revenue share of 71.0% in 2019, owing to the growing adoption of cannabis as a pharmaceutical product for treating severe medical conditions, such as cancer, arthritis, and Parkinson’s disease and Alzheimer’s disease among other neurological conditions. Moreover, increasing need for pain management therapies along with growing disease burden of chronic pain among elders is expected to boost the product demand.   Active companies in the markets this week include: Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), CanaFarma Hemp Products Corp. (CSE:CNFA), HEXO Corp. (NYSE: HEXO) (TSX: HEXO), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Aphria Inc. (NASDAQ: APHA) (TSX: APHA).

 

Recent reports also show that biotech companies are focusing on medicinal uses based on cannabinoids… and that joining could result in even more increases in revenues.  An industry insider article said: “Many companies in the biotech industry are researching cannabis extracts. It is a green field for them because some medicines containing cannabinoids have been legalized for the treatment of specific diseases, and conditions like pain, anxiety, and insomnia. They feel the use of cannabis extract for medicinal purposes has not been exhausted.”  It continued: “Some of the reasons why the biotech industry is excited about cannabidiol include: It is a New sector – being an entirely new field gives an equal chance to each company to come up with great products; Invention – in the tech world, invention is a key motivation. You want to create something that has never been there and get credit for it; and New market – the medicines made from cannabidiol will create a new market for the company.”

 

CanaFarma Hemp Products Corp. (CSE:CNFA) BREAKING NEWS:  CANAFARMA HEMP PRODUCTS CORP. ANNOUNCES DEVELOPMENT PLANS FOR A BIOEQUIVALENT DRUG TO HYDROXYCHLOROQUINE – CanaFarma Hemp Products Corp. (the “Corporation” or “CanaFarma”) is pleased to announce that it has agreed to engage PharmOps, an FDA approved pharmaceutical company, to develop a bioequivalent material to Hydroxychloroquine. Pharm Ops is a private company that manufactures pharmaceutical and nutraceutical products at its cGMP (current Good Manufacturing Practices) licensed facility in New Jersey.

 

On April 24th 2020, CanaFarma signed an LOI to acquire PharmOps Ltd., and its pharmaceutical and nutraceutical manufacturing facility. Today, as due diligence continues on the acquisition, the two companies have agreed to work together to develop a bioequivalent material to Hydroxychloroquine. CanaFarma shall use its expertise in Cannabinoids, along with an identified API source, for water soluble materials to create this bioequivalent material, and fast track through the Abbreviated New Drug Application (“ANDA”), a 6 month stability test as required by the FDA. The parties have also contracted with the aforementioned supplier of API material to produce a batch of the bioequivalent material and initiate safety studies right away.

 

During public health emergencies, medical countermeasures (“MCMs”) may be needed to prevent or treat diseases or conditions caused by chemical, biological, radiological, or nuclear (“CBRN”) or emerging infectious disease threats, like pandemic influenza. MCMs are medical products such as drugs, vaccines, diagnostic tests, and other medical equipment and supplies, needed to respond to emergencies involving such threats. The Emergency Use Authorization (“EUA”) authority allows the FDA to help strengthen the Nation’s public health protections against CBRN threats by facilitating the availability and use of MCMs needed during public health emergencies.

 

Under section 564 of the Federal Food, Drug, and Cosmetic Act (FD&C Act), the FDA Commissioner may allow unapproved medical products or unapproved uses of approved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions caused by CBRN threat agents when there are no adequate, approved, and available alternatives.

 

An ANDA contains data which is submitted to the FDA for the review and potential approval of a generic drug product. Once approved, an applicant may manufacture and market the generic drug product to provide a safe, effective, lower cost alternative to the brand-name drug it references.

 

The FDA, via the EUA, has allowed for a more stream-lined approval process of certain drugs due to Covid-19 Pandemic. One such drug that has been widely publicized is Hydroxychloroquine, approved in the 1940’s for Malaria under the Trade name of Plaquenil™. Although this product is already available on the market as a generic version as 200 mg Tablets manufactured by Mylan, Sandoz, Teva and Watson, its recent publicity of being used prophylactically in combination with Azithromycin to ward off the Covid-19 virus has created an acute shortage for all patients, including those that are using this product as an immuno-suppressant.      Read this and more news for CanaFarma Hemp Products at:  https://www.financialnewsmedia.com/news-cnfa/

 

Other recent developments in the markets include:

 

HEXO Corp. (NYSE: HEXO) (TSX: HEXO) recently announced that it launched a new 30 gram medical flower format for its popular high-THC strain Tsunami under HEXO medical cannabis.  HEXO has been dedicated to providing Canadian clients high quality medical cannabis since 2015. A year ago, the Company updated its medical packaging to comply with the Cannabis Regulations, resulting in smaller product formats.  HEXO is proud to launch a new 30 g format offered in a resealable, odour-proof and child-resistant pouch.

 

“We know our medical clients have been waiting for this opportunity to purchase a higher volume of cannabis without excess packaging,” said HEXO CEO and co-founder Sebastien St-Louis. “Our Tsunami flower benefits from enhanced humidity controls for maximum freshness and to promote ideal bud density.”

 

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) recently announced it has completed the previously announced acquisition of Reliva, LLC (“Reliva”) a leader in the sale of hemp-derived CBD products in the United States for approximately US$40 million of Aurora common shares. The transaction also includes a potential earn-out of up to a maximum of US$45 million payable at Aurora’s option in shares or cash contingent upon Reliva achieving certain financial targets over the next two years.

 

“We are pleased to have closed the Reliva transaction ahead of schedule. The partnership between Aurora and Reliva is expected to create a market leading international cannabinoid platform that we believe can deliver robust revenue and profitable growth,” said Michael Singer, Executive Chairman and Interim CEO of Aurora. “I would like to officially welcome Miguel Martin and his team to Aurora, and look forward to increasing Aurora’s operating scale, international reach, and product and brand diversity while in parallel, we remain focused on delivering Adjusted EBITDA profitability in Canada for the benefit of all shareholders.”

 

Aphria Inc. (NASDAQ: APHA) (TSX: APHA) a leading global cannabis company, recently announced that June 8, 2020 will be its first day of trading on The Nasdaq Global Select Market (“Nasdaq”), as previously communicated on May 26, 2020 , and will continue to be listed under the ticker symbol “APHA.” This transition will not impact the Company’s primary listing on the Toronto Stock Exchange (APHA).

 

Aphria Inc. is a leading global cannabis company driven by an unrelenting commitment to our people, the planet, product quality and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria Inc. has been setting the standard for the low-cost production of high-quality cannabis at scale, grown in the most natural conditions possible. Focusing on untapped opportunities and backed by the latest technologies, Aphria Inc. is committed to bringing breakthrough innovation to the global cannabis market. The Company’s portfolio of brands is grounded in expertly-researched consumer insights designed to meet the needs of every consumer segment. Rooted in our founders’ multi-generational expertise in commercial agriculture, Aphria Inc. drives sustainable long-term shareholder value through a diversified approach to innovation, strategic partnerships and global expansion.

 

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) Recently on June 8, 2020 the company announced that Tweed cannabis stores across Newfoundland are reopening to foot traffic guests who are looking to purchase their cannabis products in store, following a period of reduced operations in response to the COVID-19 pandemic.  Canopy Growth operates retail stores across Canada under its award-winning Tweed and Tokyo Smoke banners. Tweed is a globally recognized cannabis brand which has built a large and loyal following by focusing on quality products and meaningful customer relationships.

 

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