Industry News

Rising Concentrate Sales Bolster the Swiftly Expanding Cannabis Market

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NEW YORKJune 21, 2019 /PRNewswire/ — Competition among companies causes industries to evolve and adapt to the changing landscape. Essentially, every single global industry has witnessed a transitional period due to competition and changes in consumer demand and now the cannabis industry is also beginning to witness a revolutionary change. When most people hear about cannabis, they most likely think of flower. While traditional flower still makes up the majority of overall sales in many different global markets, its market share is rapidly depleting. In particular, regions that adopted cannabis early on such as Colorado and Oregon are witnessing declining flower sales. For instance, when Colorado first began recreational sales in 2014, flower dominated 67% of the state legal sales. However, four years in 2018 sales of flower diminished to 44%. During the same period, the market share of concentrates filled the gap, extending from 15% to 31% of the overall sales. Nonetheless, producers still require cannabis flower in order to make concentrates, meaning there is still a large business-to-business demand for flower. Moreover, there remains a large demand for flower for consumers who prefer to smoke cannabis via joints or other paraphilia. And as the market continues to accelerate, consumers are beginning to demand more personalized strains and experiences. Whether a consumer is a new or frequent user, the cannabis marketplace has the ideal and perfect product to please both ends of the consumer spectrum. According to data compiled by Grand View Research, the global legal marijuana market is expected to reach a value of USD 66.3 Billion by the end of 2025 while exhibiting a CAGR of 23.9%. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO), CannTrust Holdings Inc. (NYSE: CTST) (TSX: TRST), Acreage Holdings Inc. (OTC: ACRGF) (CSE: ACRG.U), Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT)

Typically, cannabis is associated with its psychological, mind-altering effects. However, some strains can be rich in CBD or cannabidiol, and provide a more relaxing effect rather than a “high.” Predominantly, most novice users may prefer a dominant CBD strain as their THC tolerance may not be as high as a frequent user. THC or tetrahydrocannabinol is the compound found in the cannabis plant that causes the psychoactive effects and a strain that is THC dominant will cause cerebral-altering effects and more frequent consumer may prefer a more THC-dominant strain because they may have developed a higher tolerance. Strains are most commonly classified on a CBD to THC ratio. For instance, a 1:0 ratio is solely CBD and no THC, which will cause no “high” effect at all. On the other hand, a 0:1 ratio will cause a high psychotropic effect, according to Alpha Cat. Moreover, certain strains can be 20:1, which is primarily used in the medical field to target neurological issues. In contrast, a 1:1 ratio is a hybrid split between CBD and THC, mainly used to treat symptoms of cancer and severe pain. Cannabis cultivators can produce a specific ratio based on the seed used as well as the growing process. Normally, a cannabis seed’s genetic makeup dictates the outcome of the plant and a potent seed can generally be comprised of more than 20% THC levels, while a less potent seed can have more than 10% CBD levels. The majority of the cannabinoids found within a cannabis plant are located in the trichomes and cultivators harvesting cannabis take special care not to damage the plant, as trichomes tend to be very delicate. Environmental factors such as lighting, nutrients, humidity, watering, and airflow will have an impact on the development of trichomes. Furthermore, providing the appropriate heat levels and carefully harvesting each individual plant to minimize contact with the flowering buds will yield more trichomes and potentially enhance the plant’s contents. The attentive and precise care of each sole plant is commonly known as the cultivation of “craft cannabis,” an artisanal profession practiced mainly by small-sized cultivators. “Craft cannabis is generally considered to be natural, handcrafted and traditionally produced by independent growers. So, basically, the good stuff, grown by passionate experts—without lights, without industrial equipment, without pesticides. Instead, each plant is personally and carefully tended to by the grower using organic methods and sunlight,” said Lieze Boshoff, Founder of cannabis content marketing and copywriting agency, LBC3 Marketing.

Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT) is also listed on the Canadian Securities Exchange under the ticker (CSE: CRFT). Yesterday, the Company announced breaking news that, “they have hired cannabis-friendly former City Councillor Susan Chapelle to lead Government Relations and Affairs for the company. Her role will focus on initiating dialogue and lobbying government partners in an effort to assist craft cannabis producers transition from the illicit market into Canada’s new regulatory framework.

Chapelle is a former City Councillor who served two terms on the District of Squamish Council (British Columbia). While on council, she was successful in shaping the District of Squamish cannabis regulations and helped pass progressive legislation for cannabis that has set the stage for industry growth. As a mayoral candidate in the 2018 election, she continued to advocate for equitable access to healthcare.

“Susan brings such strong passion for health advocacy and a clear understanding of the regulatory world that she is able to both educate municipal leaders and bring clarity to farmers looking to gain access to the legal framework,” said Jamie Shaw, Chief Communications and Culture Officer of Pasha Brands. “Susan has demonstrated throughout her life and work that she is committed to bringing the concerns of both her constituents, and patients to the forefront, and she is proving to do the same for the cannabis growers that aim to have their products on the shelves of legal retailers without losing their independence.”

Chapelle was educated in Community Economic Development at Simon Fraser University and is a graduate of the Executive Masters in Business Administration progam (MBA). She has over 30 years of business experience and opened the first multidisciplinary health care clinic in Squamish, British Columbia.

“I am excited to help municipalities and the provinces achieve their policy goals of a safe and legal cannabis industry,” commented Chapelle on her new role. “Building an understanding of the new regulatory framework and the economic opportunities of localizing the BC cannabis economy with existing craft growers is a chance for rural BC to transition lost opportunities to a clean, scientifically advanced industry. I want my province to thrive in this space.”

The most difficult challenge small farmers face is the complex regulations municipal, provincial and federal governments have in place for cannabis. With Chapelle working at the intersection of policy, science and land use, Pasha is confident it has positioned itself and partners to navigate through them successfully.

Pasha also announces that it has closed a non-brokered private placement (the “Offering”) of convertible debentures (the “Debentures”) in the principal amount of $2,307,456. The Debentures will mature on June 12, 2020 (the “Maturity Date”) and bear interest at a rate of 10% per annum. The Debenture holders may convert at any time, all or a portion of the convertible loan principal into units (the “Conversion Units”) of the Company at a price of $0.70 per Conversion Unit.  Interest on the principal amount outstanding under the Debenture shall be payable in cash or Conversion Units issuable at the conversion price, at the discretion of the borrower.

Each Conversion Unit will consist of one common share (a “Common Share”) and one half of one Common Share purchase warrant (each whole warrant, being a “Warrant”). Each whole Warrant shall be exercisable by the holder thereof to acquire one additional Common Share of the Company at a price of $0.70 for a period of 18 months from the Maturity Date.

The proceeds raised from the Offering are expected to be used to continue to grow the Company’s operations and for general working capital purposes.

Pasha has also reached agreements with two creditors to settle (the “Settlement”) payments relating to the acquisition of certain intellectual property associated with the trade name “CBD Therapeutics”.  The payments total $141,220, and are being settled through the issuance of 307,000 common shares.

All securities issued by Pasha in connection with the Offering, and the Settlement, will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities laws.

This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements.  There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements.  Pasha disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Pasha Brands: Based in Vancouver, British Columbia, Pasha is a vertically integrated, prohibition-era brand house firmly rooted in BC’s craft cannabis industry, which boasts an international reputation. With proven capabilities in cannabis cultivation, genetic research and development, product processing, and retail, Pasha is uniquely positioned in the new legal cannabis market through its network of hundreds of craft cannabis suppliers under the Pasha umbrella. Pasha subsidiary, Medcann Health Products Ltd., is a Health Canada licensed cultivator and processor with a licence to sell medical cannabis products in Canada. Pasha and BC Craft are also developing a craft cannabis campus, which is dedicated to bringing craft quality into the newly legal cannabis market in Canada. BC Craft is driven to assist craft growers in obtaining security clearance and licensing to grow as micro-cultivators, specializing in education and compliance to bring growers into the regulated cannabis supply market. Pasha’s common shares trade on the CSE under the symbol “CRFT”. For more information, please visit”

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HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO) is an award-winning consumer packaged goods cannabis company that creates and distributes prize-winning products to serve the global cannabis market. HEXO Corp. and Newstrike Brands Ltd. recently announced that they have entered into a definitive arrangement agreement under which HEXO will acquire, by way of a plan of arrangement under the Business Corporations Act (Ontario), all of Newstrike’s issued and outstanding common shares in an all-share transaction valued at approximately USD 263 Million. The Transaction gives HEXO the capacity to produce approximately 150,000 kg of high-quality cannabis annually. The Transaction also provides HEXO access to four cutting-edge production campuses totaling close to 1.8 million sq. ft. of near-term cultivation space and diversified growing and production techniques. This is in addition to HEXO’s 579,000 sq. ft. facility for a manufacturing and product development center of excellence in Belleville, Ontario. Combined, HEXO and Newstrike have established distribution agreements in 8 provinces including OntarioQuebecBritish ColumbiaAlbertaSaskatchewanManitobaNova Scotia, and Prince Edward Island, allowing broad consumer access to HEXO’s products across Canada. Newstrike’s licensed indoor facility provides HEXO with access to diversified growing techniques and positions HEXO for flexibility for international exports as global cannabis markets continue to open. “We’re thrilled to welcome the Newstrike team into the HEXO family.  Jay Wilgar (Chief Executive Officer of Newstrike) and his team have built incredible relationships, including teaming up with The Tragically Hip, and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere,” said Sebastien St-Louis, Chief Executive Officer and Co-Founder of HEXO Corp “With Newstrike, we’re adding talented employees and infrastructure to take HEXO to the next level on our journey to become one of the largest cannabis companies in the world. We’re extremely proud of our record of execution, and today are committing to achieving over USD 400 Million in net revenue in 2020.”

CannTrust Holdings Inc. (NYSE: CTST) (TSX: TRST) is a federally regulated licensed producer of medical and recreational cannabis in Canada, and the 2018 Canadian Cannabis Awards “Top Licensed Producer of the Year”. CannTrust Holdings Inc. recently announced it has finalized a Letter of Intent with Société québécoise du cannabis to provide Quebec with high-quality cannabis for the recreational market. The LOI will serve as an introduction of CannTrust’s recreational brands to the Quebec market beginning with two of the Company’s most established strains that will be available through SQDC later this year. “This LOI signifies the first step towards a long and impactful relationship with the SQDC and consumers in Quebec. This is an important milestone as we have secured national distribution across all ten provinces for our adult-use products,” said Peter Aceto, Chief Executive Officer, CannTrust. “This will allow us to develop our brand presence in Quebec at a time when consumers are beginning to develop their preferences.”

Acreage Holdings Inc. (OTCQX: ACRGF) (CSE: ACRG.U), headquartered in New York City, is the largest vertically integrated, multi-state owner of cannabis licenses and assets in the U.S. with respect to the number of states with cannabis related licenses, according to publicly available information. Acreage Holdings, Inc. recently announced that on April 17th, its subsidiary, High Street Capital Partners, LLC entered into an agreement to acquire 100% of Deep Roots Medical LLC, a vertically integrated cannabis operator in Nevada, for a total deal value of USD 120 Million to be paid in common units and cash. Deep Roots marks Acreage’s entry into Nevada, increasing the company’s total state footprint to 20 (including pending acquisitions) – the largest in the US cannabis industry.  With a population of three million, and tourism that attracts 43 million visitors per year, Nevada is estimated to generate nearly USD 800 Million in legal cannabis sales by 2022, according to Arcview Market Research. Deep Roots’ vertically integrated operations include cultivation, manufacturing & processing, a wholesale and distribution business, and seven retail dispensary licenses. Kevin Murphy, Founder, Chairman, and Chief Executive Officer of Acreage Holdings, Inc., commented, “We continue to deliver on our shareholder commitments to aggressively expand our presence in the West.  We could not be more excited for what we believe will become a leading operation in the state of Nevada, one of the most important states in the cannabis industry.”

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) specializes in the extraction, purification and formulation of health and wellness products. Neptune Wellness Solutions Inc. recently announced that it had received its license to process cannabis from Health Canada. The Health Canada license enables Neptune to handle dried cannabis, to manufacture and purify cannabis extracts and cannabis oil, and to sell its services to other license holders. With production activities anticipated to commence shortly at Neptune’s 50,000 sq. ft. good manufacturing practice (GMP)-certified facility in Sherbrooke, Quebec, the Company expects to be able to generate revenues from existing supply agreements and conclude additional agreements shortly. “This is a thrilling moment for Neptune as our ambition to redeploy our core competencies to exciting consumer product categories by creating and delivering differentiated formulations for the burgeoning cannabis market becomes a reality. Neptune’s long-standing scientific expertise in the formulation of natural health products supports our ability to deliver exceptional quality formulations for our business customers. The processing license granted by the agency puts us on a new growth trajectory, positioning Neptune as a provider of extracted cannabis products in this large, growing global market segment,” said Jim Hamilton, President & Chief Executive Officer of Neptune.

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