The Top Companies Disrupting a Massive $23.7 Billion Medical Cannabis Market
Palm Beach, FL – September 17, 2019 — Global demand for cannabis-based consumer products has been increasing at a rapid pace. In fact, the Brightfield Group estimates the U.S. CBD product market alone to be worth over $23.7 billion by 2023, as CBD finds its way into a variety of consumer product categories including food and beverage, pharmaceuticals, and health and wellness. Analysts at Research and Markets say the global medical cannabis market could be worth up to $44.4 billion by 2024 from just $13.4 billion last year. In addition, analysts at Statista says U.S. medical retail sales could reach $7.3 billion by 2022, as compared to $4.5 billion sales in 2018. Better, according to a May 2018 survey from Nielsen, analysts found that consumers are quickly embracing CBD products, particularly when it comes to medicinal purposes. In fact, according to the survey, 40% of head and migraine suffers are considering cannabis in addition to 40% of all arthritis pain suffers, and 41% of all back and neck pain sufferers. As CBD continues to disrupt major industries, it’s creating a wide range of opportunity for companies such as XPhyto Therapeutics Corp. (CSE:XPHY), HEXO Corporation (NYSE:HEXO)(TSX:HEXO), Aphria Inc. (NYSE:APHA) (TSX:APHA), Tilray Inc. (NASDAQ:TLRY), and OrganiGram Holdings Inc. (TSX-V:OGI)(NASDAQ:OGI).
XPhyto Therapeutics Corp. (CSE:XPHY) BREAKING NEWS: XPhyto Therapeutics Corp. just announced it has closed both the definitive share purchase agreement with Vektor Pharma TF GmbH and the equipment purchase agreement entered into with an affiliated company of Vektor, both of which were previously announced by the Company on August 26, 2019. Vektor is a German narcotics manufacturer, importer, and researcher located approximately 170 kilometers west of Munich. For over a decade, the company and its team have been leaders in the design, testing and manufacture of thin film drug delivery systems, particularly transdermal patches and sub-lingual (oral) strips for the clinical management of pain. Vektor holds a number of valid narcotics licences pursuant to EU GMP certification and other governing regulations: Import Permit for drug dosage forms; Import Permit for cannabis; Manufacturing Permit for clinical samples; Manufacturing Permit for final drug product release; Analytical Permit for chemical and physical testing; Permit to handle narcotic drugs; and a Permit to handle animal tissue. Vektor’s various narcotics licences include authorizations related to conventional and cannabis-related prescription medications, including but not limited to: Buprenorphine, cannabis, Dronabinol, Fentanyl, Hydromorphone, Oxycodone, and THC. “The Vektor transaction will accelerate XPhyto’s medicinal cannabis import into Germany and its drug delivery expertise, both of which are a critical part of our near-term revenue generation strategy,” said Hugh Rogers, CEO of XPhyto. “Further, with vape-based delivery systems now associated with significant potential health risks, XPhyto is extremely pleased to combine assets and expertise with Vektor, a specialist in thin film drug delivery systems. XPhyto is well positioned to capitalize on the next generation of cannabis investment opportunities, primarily clinical validation of safe and effective medicine and emerging European markets.”
Other cannabis-related developments from around the markets include:
HEXO Corporation (NYSE:HEXO)(TSX:HEXO) just announced that its dried flower cannabis products are now available to Ontario consumers, after finalizing terms with the Ontario Cannabis Store (OCS). HEXO now adds nine of its dried flower offerings in both 3.5g and 15g SKUs to the OCS, including the Company’s award-winning Helios dried flower, which was named Best Sativa at the O’Cannabiz 2019 Industry Awards. “We are thrilled to increase our offering at the OCS,” said HEXO Corp CEO and co-founder, Sebastien St-Louis. “Apart from being our nation’s most populous province with the highest demand for cannabis products, the Ontario marketplace is among the most competitive—and we are rolling out high quality products to which we believe Ontario consumers will strongly gravitate.”
Aphria Inc. (NYSE:APHA)(TSX:APHA) just posted its results for the fourth quarter and fiscal year ended May 31, 2019. “It’s a new day at Aphria. Our team’s solid execution across key areas of our business resulted in strong adult-use revenue growth and a profitable fourth quarter,” stated Irwin D. Simon. “Over the last six months, our organization identified immediate priorities to help generate substantial progress near-term and long-term. We built upon existing business fundamentals and capabilities, streamlined processes, strengthened governance, and focused on building brand awareness. Together, we have nurtured an entrepreneurial culture of accountability through data-driven decision-making for value creation in the global medical and adult-use cannabis industry. Today’s Aphria has a stronger foundation for long-term growth and success.” The company posted net revenue of $128.6 million in the fourth quarter, an increase of 75% from prior quarter and 969% from prior year; revenue for adult-use cannabis of $18.5 million in the fourth quarter, up 158% from prior quarter; and net income of $15.8 million and adjusted EBITDA of $0.2 million in the fourth quarter.
Tilray Inc. (NASDAQ:TLRY) just announced it has entered into a definitive agreement pursuant to which Tilray, through a wholly-owned subsidiary of High Park Holdings Ltd., will acquire all of the issued and outstanding securities of 420 Investments Ltd., an adult-use cannabis retail operator headquartered in Calgary, Alberta. FOUR20 provides adult-use cannabis consumers with a premium retail experience focused on high quality product selection, education and community. FOUR20 currently operates six licensed retail locations and has 16 additional high traffic locations secured in desirable locations in Alberta, including Canmore, Calgaryand Edmonton. Tilray and High Park will leverage FOUR20’s retail expertise and brand and market knowledge to expand into other Canadian provincial markets where Licensed Producer retail ownership will be permitted in the future. “FOUR20 offers a premium retail experience for the mainstream cannabis consumer and builds on our broader retail strategy, which includes several minority investments in other leading cannabis retailers,” says Tilray Chief Corporate Development Officer Andrew Pucher. “With FOUR20, we will elevate the retail experience for consumers by offering the best quality-tested products while preparing for the next wave of legalized product launches taking place by year’s end.”
OrganiGram Holdings Inc. (TSX-V:OGI)(NASDAQ:OGI) just announced it entered into an advance payment and purchase agreement with 703454 N.B. Inc. (carrying on business as 1812 Hemp) under which the Company will pre-fund hemp purchases to receive access to as much as 60,000 kilograms of dried hemp flower to be harvested in calendar 2019 for extraction into cannabidiol isolate. Organigram is already a party to a purchase agreement entered into in January 2019 with 1812 Hemp, in which Organigram was granted a right of first refusal on 1812 Hemp’s production of certain hemp cultivars. Access to CBD-rich hemp flower is being facilitated through the Payment Agreement as the Company will advance funds to 1812 Hemp for their purchase of specialized large-scale hemp harvesting and processing equipment to maximize crop yields, contribute to increased efficiency and improve preservation of harvested cannabinoids. Purchase conditions for the dried hemp flower continue to be governed by the January Purchase Agreement which secures supply and supports research and development on the genetic improvement of hemp through traditional plant breeding methods.
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