Why Those in the U.S. Cannabis Markets are Looking Forward to 2020
Palm Beach, FL –January 22, 2020 – 2020 will NOT be a good year for some cannabis marketers… or will it? The Black Market will be under fire from regulators, enforcement officials, lawmakers, health experts and industry officials in cannabis regulated states. California has already begun to take efforts to drive down, if not eliminate the illicit growth & sales of cannabis. An San Diego article said: “With an ongoing vape safety crisis, lack of access to legal banking, sluggish sales, legal and illicit market company raids, big IPOs, bigger valuation busts and mass layoffs, it is safe to say that California’s cannabis industry in 2019 experienced a return to earth from the soaring expectations that came after 2018 and recreational legalization. Though there was a lot of bad news, there is still plenty to look forward to in 2020. The first bit of good news is that it’s normal for markets to correct frequently as well as early on. Considering the legal market is only recently fully operational, it’s hardly surprising that there are some fairly large bumps in the road—not only due to normal market cycles, but especially because the market moved from a long-time illicit one to a fully legal one in just a couple of years.” Cities from San Diego to LA have been cracking down, hard, on these Black Market operations. California regulators have mounted dozens of raids against illegal marijuana retailers all across the state. The state has been under pressure from California’s legal industry to do more to stop the underground pot economy, which in Los Angeles and other cities often operates in plain sight. According to some estimates, roughly 75% of sales in the state remain under the table, snatching profits from legal storefronts. Active cannabis companies in the markets this week include: Sugarmade, Inc. (OTCQB: SGMD), Smart Cannabis Corp. (OTCPK: SCNA), Aphria Inc. (NYSE: APHA) (TSX: APHA), VIVO Cannabis Inc. (TSX-V: VIVO) (OTCQX: VVCIF), MedMen Enterprises Inc. (CSE: MMEN) (OTCQB: MMNFF).
The GOOD NEWS is that recent reports of revenue projections and a retrospective lookback at the last two years bodes well for 2020 and beyond. California saw some growth in 2019, with sales reaching $2.96 billion, the report shows… and cannabis sales in California are expected to grow from $2.96 billion to $3.6 billion for 2020. It’s interesting that as last year’s explosive growth was that the growth came amid a fallout in public market valuations, with the stock of numerous public cannabis companies sinking throughout the year. One industry insider explained “Wall Street often gets is wrong and it tends to get overexcited and over-depressed…” It’s really just the crowd mentality – too bullish in 2018 and too bearish in 2019”.
Sugarmade, Inc. (OTCQB: SGMD) BREAKING NEWS: Sugarmade Places on Hold Reverse Split – Plans to Enter Regulated Cannabis Market as Industry Turmoil Creates Opportunities – Sugarmade today announces the Company has placed a hold on plans to complete a reverse split of its common shares. Pending a vote by its board of directors, management believes temporarily holding the reverse split or canceling the reverse split altogether may be the best future course of action. The Company is also announcing its planned entry into the regulated and licensed portion of the cannabis marketplace, with an emphasis on the California distribution and retail sectors.
Jimmy Chan, CEO of Sugarmade commented, “For at least the time being do not see a reason to move forward with the reverse stock split. However, we reserve the right, should circumstances warrant to reactivate the reverse. We are in the process of modifying our business strategy to better align with where the cannabis marketplace is headed and thus our cancellation of the previously proposed transaction. We see significantly larger opportunities in the California cannabis distribution arena and have entered into advanced talks to make a strategic move into this area.”
The cannabis industry in California is rapidly evolving. As recently as only a few months ago, the competitive landscape for legal and licensed cultivators, processors, distributors and retailers was bleak, but the situation has rapidly improved as the crackdown on illegal market participants in California has shown great success. Sugarmade expects these successes to continue. Sugarmade sees a strong opportunity to enter this business arena as the environment changes and as long-time industry participants seek publicly traded partners.
The Company recently announced the rescission of an agreement to acquire a hydroponic equipment supplier. In a filing with the U.S. Securities & Exchange Commission, Sugarmade outlined that approximately 1.2 billion common share equivalents will be returned to the Company’s treasury. In addition, the rescission is estimated to save Sugarmade approximately $1 million per month over the next seven months. Sugarmade’s board of directors has determined the business combination was no longer viewed as the best shareholder maximization strategy as industry upheaval accelerates. Sugarmade has been presented with numerous other business combination opportunities that its board of directors now believes are superior and are under consideration.
The Company’s board of directors believes entry into the regulated portion of the cannabis business sector, which includes hemp and legal THC cannabis cultivation, processing and marketing, is particularly appealing due to the large number of assets within that sub-sector that are currently available for purchase or acquisition. Sugarmade has entered into discussion with several such companies relative to a strategic business combination.” Read this and more news for Sugarmade at: https://www.financialnewsmedia.com/news-sgmd/
Other recent developments in the cannabis/cbd/hemp industries:
Smart Cannabis Corp. (OTCPK: SCNA) recently announced that its new executive management has diversified the Company’s business strategies with the acquisition of a CBD and hemp retail operations. In 2019 3rd Quarter, the Company appointed Mark Cheung as its interim CEO who sought out promising retail CBD and hemp businesses with growth potential. He said, “Given that the Company had been constructing and selling cannabis-oriented green houses, it seemed a logical next step to enter the ever-growing CBD and hemp retail sales.”
As a result, effective October 1, 2019, the Company acquired Budding Botanicals, and placed it within Company’s Next Generation Farming, Inc. subsidiary. Budding Botanicals has been actively selling its CBD and hemp products at its online store and has also sold its products at pop-up locations in Southern California.
Aphria Inc. (NYSE: APHA) (TSX: APHA) recently announced that it has received its European Union Good Manufacturing Practices (“EU GMP”) certification in respect of medicinal products for human use and investigational medicinal products for human use, from the Malta Medicines Authority (“MMA”) at the Company’s subsidiary, ARA – Avanti Rx Analytics.
Aphria selected the MMA to perform the EU GMP audit as the criteria and certification thresholds established by the MMA are among the most stringent and demanding in the EU. The certification will allow the Company to ship bulk and finished dried flower, as well as bulk and finished cannabis oil for medicinal use in permitted jurisdictions throughout the European Union.
VIVO Cannabis Inc. (TSX-V: VIVO) (OTCQX: VVCIF) recently revealed its new Cannabis 2.0. products set to come to market in the coming months across Canada. VIVO will focus on the vape, chocolates and concentrates categories leveraging VIVO’s premium adult-use cannabis brands including Canna Farms™ and Fireside™.
“VIVO is committed to changing the way people view cannabis and to enhancing lives. I’m delighted with our Cannabis 2.0. offering. The range is robust and stretches across multiple new legal categories including vapes, chocolates, and concentrates that include kief, rosin, bubble hash, wax and shatter. Coupled with our commitment to quality and consistency in supply, I’m confident that our range of products will help to play a role in decreasing the size of the illicit footprint,” said VIVO’s CEO, Barry Fishman.
MedMen Enterprises Inc. (CSE: MMEN) (OTCQB: MMNFF) recently has partnered with Los Angeles wellness studios Sweat Yoga, LIT Method, Cycle House, Box Union Robertson and Oraya Movement as part of an enhancement of 2020 community programming. The goal of the partnership is to discover synergies between the benefits of wellness and cannabis. MedMen collaborated with Papa and Barkley and Kikoko to provide each studio with samples of their leading cannabis products, as well as including incentives to visit MedMen.
MedMen’s “New Year, New You” program will also be covered extensively on Ember, MedMen’s digital editorial platform. Ember is high culture for all, providing a point of view on style, wellness, food, and travel through a cannabis filtered lens.
“New Year, New You” is part of MedMen’s strategy to enhance community engagement in 2020. “New Year, New You” complements MedMen Buds, the Company’s new loyalty program, and recently launched same-day delivery platform available at all California and Nevada locations. All three programs are aligned with MedMen’s industry-leading omni-channel experience and customer service.
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