Palm Beach, FL – November 21, 2019 — At the moment, “there are dozens of studies taking place to evaluate the medical safety and efficacy of psychedelics, including psilocybin, and the potential benefits of psychedelics as a treatment for cluster headache, anxiety, addiction to alcohol and other drugs, depression, obsessive-compulsive disorder, as well as neuroimaging experiments furthering the understanding of its effects on the brain,” as reported by Drugpolicy.org. Psychiatrists at Johns Hopkins University and the Multidisciplinary Association for Psychedelic Studies (MAPS) for example are conducting research. Researchers at New York University found psilocybin mushrooms caused a “rapid and sustained” reduction in anxiety and depression in patients with cancer, as reported by the Financial Post. As excitement builds, it’s opening a range of opportunity for companies that have already established launching cannabis products including The Yield Growth Corp. (CSE:BOSS) (OTCQB:BOSQF), The Supreme Cannabis Company Inc. (TSX:FIRE) (OTCQX:SPRWF), Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), HEXO Corporation (NYSE:HEXO) (TSX:HEXO) and Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT).
The Yield Growth Corp. (CSE:BOSS)(OTCQB:BOSQF) BREAKING NEWS: The Yield Growth Corp. just announced it has entered into a definitive agreement for the exclusive distribution of Yield Growth’s line of mushroom infused organic coffees being developed through subsidiary Flourish Mushroom Labs Inc. The distribution agreement grants exclusive distribution rights in Greece, Cypress, Romania, Bulgaria and Serbia for the organic mushroom coffee line being developed by Yield Growth subsidiary Flourish Mushroom Labs to 2699598 Ontario Corp. O/A Melorganics Hellas. The term of the agreement is three years and exclusivity is maintained provided that minimum orders of $100K per year are met. The initial line of mushroom coffee mixes will be organic and infused with various wild mushrooms such as Lion’s Mane, Turkey Tail, Reishi, Shitake, Chagas and Cordyceps. In the second quarter of 2019 Greece was the fastest-growing Eurozone economy, according to eulerhermes.com, driven by strong growth in public consumption. “Mushrooms are a unique source of vitamin D and some B vitamins… Mushrooms have long been used in Chinese medicine and newer research shows they are the highest dietary source of the antioxidants ergothioneine and glutathione, which help protect the body against the type of damage that can eventually contribute to age-related diseases like cancer, heart disease, Parkinson’s and Alzheimer’s,” says Beth Warren, RDN, founder of Beth Warren Nutrition, as reported in Yahoo Lifestyle. Flourish Mushroom Labs has also announced its intention to develop clinical trials to research innovative therapeutic uses of certain compounds found in magic mushrooms, such as psilocybin. COMPASS Pathways, a life sciences company dedicated to accelerating patient access to evidence-based innovation in mental health, has received Breakthrough Therapy designation from the US Food and Drug Administration (FDA) for its psilocybin therapy for treatment-resistant depression.
Other cannabis-related developments from around the markets include:
The Supreme Cannabis Company Inc. (TSX:FIRE)(OTCQX:SPRWF) announced that its wholly-owned subsidiary, Blissco, has launched a new full-spectrum CBD oil, Pūr Dew. With the launch of Pūr Dew CBD oil, Supreme Cannabis diversifies its product offerings, which currently include dry flower from 7 ACRES and high-THC cannabis oil from KKE. Pūr Dew was created in British Columbia, using pure CBD cannabis oil and USDA certified organic MCT coconut oil. Blissco was able to retain the delicate terpenes, giving Pūr Dew the aromatic smell of clove, with refreshing hints of citrus and pine. Blissco is committed to sourcing packaging that is the least harmful to the environment. Continuing this commitment, Pūr Dew is available in recyclable glass bottles and the cardboard packaging is made from 100% post-consumer waste paper. “We are excited to expand our product offering to include CBD, arguably one of the fastest growing product segments on the market. As Blissco’s first CBD oil, Pūr Dew offers consumers full-spectrum CBD and USDA certified organic MCT coconut oil,” said Navdeep Dhaliwal, CEO of Supreme Cannabis. “Our team worked incredibly hard to provide consumers with a product that retains the benefits of the plant and the natural terpenes. Pūr Dew can be taken directly or mixes well into beverages, such as smoothies. We are excited for consumers to try Pūr Dew.”
Canopy Growth Corporation (TSX:WEED)(NYSE:CGC) just announced, “The last two quarters have been challenging for the Canadian cannabis sector as provinces have reduced purchases to lower inventory levels, retail store openings have fallen short of expectations, and Cannabis 2.0 products are yet to come to market,” said Mark Zekulin, CEO, Canopy Growth. “However, we believe these conditions are a short-term headwind in what is a brand-new industry, and Canopy continues to be best positioned with cash-on-hand, a world-class infrastructure, and a portfolio of intellectual property to deliver sustained, long-term market leadership.” Added Zekulin: “We took the necessary steps to address inventory levels on our oils and softgels; looking beyond this, the fundamentals are strong: our retail store sales are growing on an overall and same-store basis, our Canadian medical revenues are up, and international medical sales are growing on both an organic and inorganic basis. And, even though revenue is muted during the quarter due to the restructuring charge, actual cannabis shipments grew quarter-over-quarter, which is a great accomplishment in light of the inventory reset that’s occurring at the provinces. We believe our fundamentals are strong and are confident we’re moving in the right direction.”
HEXO Corporation (NYSE:HEXO)(TSX:HEXO) provided additional information about licensing at its facility in Niagara, Ontario. In November 2018, prior to HEXO Corp’s acquisition of Newstrike Brands Ltd., the UP Cannabis cultivation facility in Niagara was licenced by Health Canada and production from that facility began shortly after. Block B – the space in question – was included in the licence application. In October 2018, Health Canada requested additional information for the application, pertaining specifically to the building where Block B is housed. When the licence was received, the team was under the impression that Block B was included in the licence. In February 2019, Health Canada conducted an inspection of the facility, which included Block B and no observations were made about cultivation in this space. This further reinforced the assumption that it was indeed a licensed growing space. On July 30, 2019, shortly after the Newstrike Brand Ltd. acquisition closed, HEXO discovered that cannabis was being grown in Block B, which was not adequately licensed. HEXO management immediately ceased cultivation and production activities in the unlicensed space. The Company notified Health Canada instantly, and the regulator was satisfied with HEXO management’s corrective actions. The Company is confident that all product cultivated and produced in all its facilities is grown according to the highest quality standards and following all standard operating procedures. As an additional quality assurance measure, HEXO’s Chief Operating Officer personally inspected and certified any shipments for sale from that facility. All of the inventory on site at that time was held from shipping and scheduled for destruction. “HEXO is keenly focused on producing high-quality products that Canadians can trust,” said HEXO CEO and co-founder Sebastien St-Louis. “Upon discovering that cannabis was being grown in an inadequately licensed area of the Niagara facility we immediately ceased all activities and notified Health Canada. While we are disappointed with what we uncovered, we assume responsibility for any issues with UP products prior to the acquisition.”
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) has entered into an amended and restated processing agreement with Canopy Growth Corporation. Canopy and Neptune mutually decided to review the terms of their processing agreement. The parties have agreed to an amended schedule of processing volumes committed to Neptune by Canopy. In addition, the parties agreed to remove certain preferential rights previously granted to Canopy with respect to Neptune’s capacity and pricing. Effective June 30, 2020, volume and pricing will be negotiated between the two parties based on market conditions. The 3-year term of the agreement remains unchanged and expires on June 30, 2022.
Canopy continues to be an important customer for Neptune and both parties are looking forward to maintaining and capturing more business opportunities as the market evolves. As a result of the revised terms, Neptune expects to reduce its client concentration risk and diversify its customer base.
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