Astute Consumers are Shifting the Market to Higher Quality Cannabis Products

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Jun 04, 2019, 09:00 ET

NEW YORK, June 4, 2019 /PRNewswire/ -- As of late 2018, it was legal to cultivate marijuana at homes in 21 U.S. states and the District of Columbia. States such as Rhode Island and Oklahoma strictly only allow for the cultivation of medical cannabis and the two states note that only medical patients are allowed to grow cannabis within their homes. On the other hand, states such as California and Colorado allow their residents to freely grow their own cannabis for both recreational and medical use. For instance, Colorado permits its adult residents to grow up to six plants per person, however, no more than 12 plants can be grown per residence regardless of the number of adults living in the household. Before the era of prohibition, cannabis was typically grown outdoors because it was widely used for its medicinal properties. Over the past century, however, many growers engaged in indoor cultivation in order to avoid government regulators following prohibition. And as legalization began to spread throughout the country, regulations regarding cannabis started to change. Now, cannabis cultivators are utilizing both indoor and outdoor facilities. While normally, indoor facilities are more controlled, outdoor facilities offer a more natural climate. In general, most cultivators are racing towards establishing large scale greenhouse or outdoor facilities to meet the rapidly growing demand. Specifically, Canadian producers are locking in licenses and agreements to cultivate cannabis and help overcome the supply shortage the industry has witnessed. However, the major drawback of operating large scale facilities is that the quality of the plant can be affected. As a result, more home growers and cultivators are carefully inspecting and treating the plant throughout the growing process as consumers and growers are focusing more on producing higher and cleaner quality cannabis as opposed to going solely for quantity. 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. (CSE: CRFT), Molson Coors Brewing Company (NYSE: TAP) (TSX: TPX), Organigram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI), CannTrust Holdings Inc. (NYSE: CTST) (TSX: TRST), Harvest Health & Recreation Inc. (OTC: HRVSF) (CSE: HARV)

Growing indoors or outdoors mainly comes down to consumer preference. Primarily, there are three methods to growing cannabis: indoor, sun-grown with light deprivation (greenhouse), and full-term sun-grown (outdoor), according to Leafly. Indoor facilities give cultivators more control over the entire growing process, including room temperature, air circulation, and lights. In addition, indoor cultivators can control and alter various factors of the plant such as its potency and taste. In contrast, greenhouse grow houses use light deprivation in order to block out the sun with tarps, tricking plants into growing faster. Jeremy Moberg, Chief Executive Officer of Cannasol, said that light deprivation produces the highest quality products with the least negative impact on the environment. Conversely, outdoor cultivation is the most natural and least expensive way to grow cannabis as outdoor growers only use tents, soil, and naturally occurring elements in order to produce their cannabis. However, many outdoor facilities tend to spray pesticides or other byproducts on their plants to ward off animals, bugs, or mold, meaning that indoor or greenhouse grown cannabis tends to be much cleaner. In order to achieve the pros of each method of growing, cultivators have begun to produce "craft cannabis." Similar to craft beer or craft coffee, craft cannabis producers pay close attention to the growing process of each individual plant to ensure high-quality products. Growers opt towards using organic and sustainable farming practices so their products are free of toxins or chemicals, benefitting both the consumer and the ecosystem. "With anything that we put in our bodies, whether it be food or beer or cannabis, it's important to know everything that you're putting in your body when you consume that product. The same reason that I won't go and buy a bag of Cheetos and eat them is the same reason why I wouldn't buy some production type of cannabis that's been sprayed with pesticides. It's going into our bodies, it's affecting our brains," said Alison Friendshuh, Budtender at The Farm in Colorado.

Pasha Brands Ltd. (CSE: CRFT) yesterday announced breaking news that, "trading of its common shares will commence at market open today under exchange symbol "CRFT" on the Canadian Stock Exchange ("CSE"). This follows the completion of the reverse takeover of Broome Capital Inc. ("Broome") (TSXV: BCP).

Although new to the public markets, Pasha is Canada's only prohibition-era brand house and already the most significant force in Canada's craft cannabis community. The vertically integrated craft cannabis organization operates as a brand house representing Canada's most established craft cannabis cultivators, producers and retailers. Within the Pasha umbrella resides award-winning brands that have firmly established themselves, pre-legalization, in British Columbia – a region known around the world for its high quality craft cannabis product. Prior to legalization, the brands now owned by Pasha, while operating in the prohibition-era, ranked among the leading revenue producing companies now operating in the regulated industry.

'Today is historic for both Pasha Brands and the Canadian craft cannabis community,' said Patrick Brauckmann, Executive Chairman of Pasha Brands. 'Our listing not only marks the beginning for Pasha as a publicly traded company, but confirms our unwavering commitment to help take growers and brands, many of which played a role in making legalization happen, into the legal marketplace.'

Beyond the brands' achievements, Pasha is led by a team who is well-known and well-respected in the Canadian craft cannabis community. Each member of Pasha's leadership team has uniques ties to the cannabis industry, which ultimately drives their motivation to bring craft cannabis to consumers on a global scale.

Pasha's wholly-owned subsidiary, BC Craft Supply Co. Ltd. ("BC Craft"), will assist micro-cultivators through development, licensing, testing, and distribution of craft cannabis products, in exchange for a guaranteed supply agreement with each micro-cultivator. Similar to Pasha, BC Craft has also amassed some of the most experienced growers in the industry who have laid the foundation for legal cannabis to exist today. Under the Health Canada framework, each micro-cultivator will be able to legally process approximately 500 kilograms of dried flower per year. For every 100 micro-cultivators BC Craft secures, up to 50,000 kilograms of world-class craft cannabis could be available to the market via Canada's regulated supply chain.

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's subsidiary, BC Craft Supply Co. Ltd., is also developing a craft cannabis campus, which is dedicated to bringing craft quality into the newly legal cannabis market in Canada. BC Craft Supply Co. Ltd. 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 www.pashabrands.com."

For our latest "Buzz on the Street" Show featuring Pasha Brands Ltd. recent corporate news, please head over to: https://www.youtube.com/watch?v=WHhCdxe0GyM

Molson Coors Brewing Company (NYSE: TAP) (TSX: TPX) has defined brewing greatness for more than two centuries. Molson Coors Canada (MCC), the Canadian business unit of Molson Coors Brewing Company, and HEXO Corp. recently announced that they have closed the transaction announced on August 1, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer. Vye will report to the Truss board of directors consisting of three members appointed by MCC and two members appointed by HEXO. "With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running," said Brett Vye, Chief Executive Officer at Truss. "When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer. Why "Truss"? We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future."

Organigram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI) is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada. Anticipating the legalization of adult-use cannabis edibles, and ready to demonstrate a leadership position in the edibles market, Organigram Holdings Inc. recently announced a USD 15 Million investment commitment in a high-speed, high-capacity, fully-automated production line with the ability to produce an estimated 4 million kilograms of exceptional chocolate cannabis edibles per year. Organigram expects to take delivery of the line in the fall. In addition to its sheer capacity, adaptability to anticipated future growth of the domestic and international chocolate edibles markets, the line is expected to allow Organigram's product development team to introduce chocolate innovations unique not only to the cannabis industry, but to the chocolate industry as a whole. "Over the last number of years, Organigram has become known for its best-in-class cannabis production facility and high-quality products," says Greg Engel, Chief Executive Officer, Organigram. "With this investment, we will soon also be known for our world-class chocolate production capability."

CannTrust Holdings Inc. (NYSE: CTST) (TSX: TRST) a federally regulated licensed producer of medical and recreational cannabis - is leading the Canadian and global market in producing standardized cannabis products. CannTrust Holdings Inc. recently announced that it had shipped its standardized CBD oil capsules to Australia's Gold Coast University Hospital. The capsules will be used in a study to determine the efficacy of CannTrust CBD oil capsules in slowing the disease progression in patients with Amyotrophic Lateral Sclerosis (ALS) and Motor Neuron Disease (MND), which was first announced by the Company in July 2018. The capsules will be imported, stored and distributed by PharmaCann Pty Ltd. The shipment will include all investigational products that are required for the study. This study exemplifies CannTrust's focus on medical research and its dedication to uncovering the medicinal value of its proprietary cannabis products, and how they can improve health and well-being for all. In addition to assessing ALS disease progression, the study will also look at the effects of CannTrust CBD oil capsules on a variety of outcome measures related to ALS such as spasticity, pain, weight loss and quality of life. The CBD strain which will be used in the study was developed by CannTrust from its proprietary genetics, meaning that the research results will be specific to the Company's CBD oil. "With our medicinal cannabis experience and over 50,000 patients enrolled over the past five years, we continue to see the medical potential of the cannabis plant. We are committed to being international leaders in the generation of scientific evidence proving the medical benefits in treating a variety of indications. With hundreds of thousands of people living with ALS in Canada and globally, we continue to focus on improving peoples' lives around the world," says Peter Aceto, Chief Executive Officer of CannTrust. "We also thank PharmaCann for its expertise and assistance in importing our products to Australia, to make this study possible."

Harvest Health & Recreation Inc. (OTCQX: HRVSF) (CSE: HARV) is one of the first consistently profitable, vertically integrated cannabis companies with one of the largest footprints in the U.S. Harvest Health & Recreation, Inc. recently announced that it has entered into a binding agreement to acquire Verano Holdings, LLC ("Verano"), an arm's length third party, one of the largest privately held multi-state, vertically integrated licensed operator of cannabis facilities, in an all-stock transaction for an estimated purchase price of approximately USD 850,000,000 based on a share price of CND 8.79. The combined company will be one of the largest multi-state operators ("MSO") in the U.S., as measured by licenses held and facilities permitted. Upon completion of the transaction and regulatory approval, Harvest will hold licenses that will allow it to operate up to 200 facilities in 16 states and territories across the country, including 123 retail dispensaries. Following completion of the transaction, the combined company is expected to be operating 30 dispensaries, eight cultivation facilities and seven manufacturing facilities, with expected further aggressive operational expansion. By the end of 2019, Harvest expects to have over 70 dispensaries, 13 cultivation facilities and 13 manufacturing facilities in operation. The company expects continued growth in 2020. "The combination with Verano fits perfectly with our vision of creating the world's most valuable cannabis company," said Jason Vedadi, Executive Chairman of Harvest. "We are confident that this is an opportunity to continue to leverage each of our company's strengths and drive continued shareholder value, while at the same time achieving the scale we know will give us a leadership position in one of the largest cannabis markets in the world."

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