Developing CBD Products Strictly Derived From Hemp
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Message: The Cannabis Market Shifts as Farm Bill is Now Law; Will the U.S. Be the New Driving Force for 2019?
POINT ROBERTS, Wash. and DELTA, British Columbia, Dec. 28, 2018 (GLOBE NEWSWIRE) -- Investorideas.com, a leading investor news resource covering hemp and cannabis stocks, releases a snapshot looking at the growing North American opportunity for the CBD and Hemp market as the 2018 Farm Bill was passed into law.
Canada took the lead in the sector legalizing cannabis in October this year, but all eyes are now on the U.S as the Farm Bill was passed and new States continue to legalize cannabis.The U.S. cannabis market is expected to generate $23.4 billion in sales by 2022, according to Arcview Research.
Edibles sales are on track to reach more than $4.1 billion by 2022, according to Arcview Market Research in partnership with BDS Analytics. They also report in 2018, consumer spending on cannabis-based food and drink is projected to reach $1.5 billion in United States and Canada.
So what about 2019? Many companies, both large and small have been taking note of the potential revenue the Farm Bill will generate and have been working diligently to prepare for this moment.
Tilray, Inc. (NASDAQ:TLRY), a global leader in cannabis research and production, plans to be one of the leaders with recent announcements of its letter of intent to purchase hemp-derived CBD isolate from LiveWell Canada, in addition to news of a joint research partnership with Anheuser-Busch InBev (NYSE:BUD) into non-alcoholic, cannabis-infused beverages.
The deal with LiveWell calls for them to supply Tilray with CBD isolate made from hemp cultivated and processed in the U.S. and Canada, with first supply commencing in February 2019. The CBD isolate will be used to process finished CBD cannabis products for distribution by Tilray in Canadian and U.S. markets, subject to applicable federal and local laws and regulations.
Now that the Farm Bill has been signed into law and Canada has opened the doors for edibles in 2019, the path is clear.
AB InBev (NYSE:BUD) is the third alcohol company to partner or invest in a Canadian marijuana producer after Molson Coors Brewing Co. signed a joint venture with Hexo Corp. and, most famously, Constellation Brands Inc. invested in Canopy Growth Corp (TSX: WEED) (NYSE: CGC) to become the biggest shareholder in the company. Tobacco company Altria Group Inc. also announced a $1.8 billion investment in Cronos Group Inc. this month.
Bruce Linton, Chairman & Co-CEO, Canopy Growth Corporation, the world's largest diversified hemp and cannabis company, commented on the passage of the Farm Bill saying, “Canopy Growth commends the United States government for passing the Farm Bill, a transformative piece of legislation that will create jobs and meaningful economic impact across the United States."
"Canopy Growth will participate in the American market now that there is a clear federally-permissible path to the market. Consistent with the spirit of the Farm Bill, Canopy Growth will participate in ways that support American farmers," continued Linton.
One notable difference in the Tilray/AB InBev deal is that unlike the Constellation and Altria deals, both of which include the option to take majority control in the future, Tilray wanted to remain independent. Chief Executive Officer Brendan Kennedy said, “We want to control our own destiny. We haven’t sold our company to anyone, we’re not looking to get bought or acquired.”
Smaller, but just as ambitious, American Premium Water Corporation (OTC:HIPH), a company focused on harnessing the powers of hydrogen and Nano technologies paired with cannabidiol (CBD) to treat health disorders and enhance quality of life, has also been making preparations for the soon to expand CBD sector. The company recently announced that it has entered into a letter of intent with the California based subsidiary of Growpacker, Inc, which offers local and international brands key services, such as manufacturing, co-packing, and distribution for THC & CBD infused products. Growpacker will provide these services for the Company; internal LALPINA CBD branded products as well as manufacturing and co-packing for white label and co-branded products utilizing the Company’s proprietary CBD and THC formulations.
Also trying to posture for market share, one company has taken a different approach. EnviroTechnologies International Inc., (OTC:ETII) a company that develops and markets green, natural and organic products for diverse industries recently announced that its subsidiary, CBD Health Co., (www.cbdhealthco.com), that markets and sells high quality and proprietary hemp-based, natural CBD health products, has placed its focus away from the seemingly oversaturated CBD beverage market and instead on hemp-based pet supplement products development. But that is just one of the many products they plan to roll out.
In the news Enviro said, “Current research shows that there are several common CBD benefits for dogs, which are, 1) powerful painkiller (the ECS is involved in managing pain and CBD’s pain killing properties are well documented}; 2) effective anticonvulsant (CBD helps control seizures, tremors, tics and spasms); 3) natural anti-inflammatory; 4) anxiety and stress reducer (anxiety in dogs often results in in barking, urination and defecation, chewing and aggression); 5) active antiemetic (reduces nausea and vomiting); and homeostasis promoter (proper functioning of the body).
Continued: “Pet owners are committed to their pet’s health well-being and are willing to spend money on pet health products, which make this a multi-billion dollar market, worldwide," said Karren. “We hope to introduce our CBD pet products in 2019 as we believe that our CBD pet products will be superior to those currently offered in this huge industry and will create another profitable channel for our CBD products.”
As the markets for CBD and Hemp open up beyond North America, how significant of a player the US will be is yet to be determined, but it is safe to say the changes to industrial hemp laws in the US will have far reaching effects.
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