Hemp's Resurgence Continues as the FDA Hones in on CBD

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Mar 19, 2020, 09:00 ET

NEW YORK, March 19, 2020 /PRNewswire/ -- CBD has garnered a strong reputation for its wide range of potential health benefits. However, it has only been approved to treat childhood epilepsy syndromes, such as Dravet syndrome and Lennox-Gastaut syndrome after the U.S. Food and Drug Administration approved Epidiolex, making it the first approved cannabis-based drug, last year. The FDA has made clear that additional research is required in order to advance with more approvals. The Administration has also held numerous public hearings in recent years in order to further understand the efficacy of CBD. And while only one cannabis-based drug has been approved, the efforts of the FDA indicate that CBD is gathering a strong momentum as a possible medical substance. "As legislation expands rapidly worldwide, the volume of efficacy data is growing, as are legitimate clinical trial studies," says Liam McGreevy, Chief Executive Officer of Ethnopharm, a European cannabis company specializing in genetics and distribution, "This data will enable us to better understand the effects of the various cannabinoids and terpenes, their synergistic effect and how their impact links to the individual's genetics or biomarkers. This data is key to understanding the most effective combinations and strengths for various conditions, moving towards targeted personalized medicines." And according to data compiled by Acumen Research and Consulting, the global cannabidiol (CBD) market is projected to reach USD 22 Billion by 2026 while exhibiting a CAGR of 33% over the forecast period, from 2019 to 2026. Cardiol Therapeutics Inc. (OTC: CRTPF) (TSX: CRDL), Tilray, Inc. (NASDAQ: TLRY), Cronos Group Inc. (NASDAQ: CRON), Innovative Industrial Properties, Inc. (NYSE: IIP), Organigram Holdings Inc. (NASDAQ: OGI)

Recently, the U.S. Department of Agriculture (USDA) provided an update on its interim final rule process for hemp. According to the USDA, hemp production in the U.S. has seen a resurgence in the last five years; however, it remains unclear whether consumer demand will meet the supply. High prices for hemp, driven primarily by demand for use in producing CBD, relative to other crops, have also driven increases in planting. As such, producer interest in hemp production is largely driven by the potential for high returns from sales of hemp flowers to be processed into CBD oil. Yet, despite the issues the market still needs to overcome, the cannabis industry now plays an important economic factor in states where sale and use of such products is legalized, especially for recreational purposes. Notably, U.S. states like California, Colorado, Nevada, and Washington are collectively delivering billions of dollars in annual revenue. And as the legal industry continues to expand, these four states are expected to witness their sales continue to grow. For instance, just Colorado alone reported collecting a cumulative of USD 1.02 Billion from marijuana taxes, licenses and fees since the state started collecting them in 2014. And overall, there has been USD 6.5 Billion in total marijuana sales in Colorado since recreational cannabis sales began in January 2014.

Cardiol Therapeutics Inc. (OTCQX: CRTPF) (TSX: CRDL) is also listed on the Toronto Stock Exchange under the ticker (TSX: CRDL). Yesterday, the Company announced breaking news that, "it has signed a supplier agreement to offer its pharmaceutically produced cannabidiol to Medical Cannabis by Shoppers ("Shoppers"), a subsidiary of Shoppers Drug Mart Inc.

Shoppers will be the exclusive retailer of Cardiol's CardiolRx™ brand of cannabidiol products in Canada. Under the terms of the agreement, Cardiol's exclusive manufacturing partner, Dalton Pharma Services Inc., will supply Cardiol's pharmaceutical cannabidiol products to Shoppers for resale in all provinces and territories in Canada through Shoppers' online store. Manufactured under cGMP and THC free (<5 ppm), Cardiol's products are designed to be the safest and most consistent pharmaceutical cannabidiol formulations available and will be sold initially in three dosage formats: 100mg/mL, 50mg/mL, and 25mg/mL. Shoppers also has the right to resell all future products available from Cardiol's product line, subject to any and all regulations.

There is a growing demand from paediatricians for a cannabidiol formulation that does not contain THC. The Canadian Paediatric Society and The College of Physicians and Surgeons of Ontario recommend that physicians not expose young people under the age of 25 to THC, as its effects on brain development are unknown. For elderly patients, THC exposure can lead to unfavourable drug interactions, delirium, instability, and other effects of intoxication. People over the age of 65 represent the fastest growing segment for medicinal cannabinoids in Canada.

'Shoppers Drug Mart is a trusted brand in Canada and we are delighted that Medical Cannabis by Shoppers has agreed to carry Cardiol's pharmaceutical cannabidiol on an exclusive basis,' said David Elsley, President and CEO of Cardiol Therapeutics. 'The signing of this important distribution agreement has now positioned our Company to meet the growing demand for medical cannabidiol products that are free from the psychotropic effects of THC, while setting the highest industry standards for purity, stability, safety, and consistency for patients and healthcare providers.'

About Cardiol Therapeutics Cardiol Therapeutics Inc. (TSX: CRDL; OTCQX: CRTPF) is focused on producing pharmaceutical cannabidiol (CBD) products and developing innovative therapies for heart disease, including acute myocarditis and other causes of heart failure. The Company's lead product, CardiolRx™, is formulated to be the most consistent cannabidiol formulation on the market. CardiolRx is pharmaceutically produced, manufactured under cGMP, and is THC free (<5 ppm), The Company also plans to commercialize CardiolRx in the billion-dollar market for medicinal cannabinoids in Canada and is pursuing distribution opportunities in Europe and Latin America. In heart failure, Cardiol is planning an international clinical study of CardiolRx in acute myocarditis, a condition caused by inflammation in heart tissue, which remains the most common cause of sudden cardiac death in people less than 35 years of age. The Company is also developing proprietary nanotechnology to uniquely deliver pharmaceutical cannabidiol and other anti-inflammatory drugs directly to sites of inflammation in the heart that are associated with heart failure. Heart failure is the leading cause of death and hospitalization in North America with associated annual healthcare costs in the U.S. alone exceeding $30 billion. For further information about Cardiol Therapeutics, please visit cardiolrx.com.

Tilray, Inc. (NASDAQ: TLRY) announced earlier this year its entry into a strategic agreement with Canndoc Ltd., a wholly-owned subsidiary of InterCure Ltd., through its wholly-owned subsidiary Tilray Portugal Unipessoal Lda., to export a wholesale shipment of up to 2.5 tons of medical cannabis from Portugal to Israel. "The cooperation between Canndoc, an Israeli cannabis pioneer and Tilray, a global cannabis pioneer, is a significant breakthrough for both Canndoc and the entire Israeli market," said Ehud Barak, former Israeli Prime Minister and Chairman of the Canndoc Board of Directors. "This enables the two companies to offer a broad product range for Israeli patients and patients worldwide in the near future. This is an important milestone for Canndoc's growth strategy."

Cronos Group Inc. (NASDAQ: CRON) announced last year that it has closed its previously announced acquisition of four Redwood Holding Group, LLC operating subsidiaries. The transaction provides Cronos Group with a leading U.S. hemp-based products platform, including hemp-derived cannabidiol (CBD) infused skincare and other consumer products that are sold online and through retail and hospitality partner channels in the United States under the brand, Lord Jones™. Mike Gorenstein, Cronos Group's Chairman, President and Chief Executive Officer, said, "this acquisition is one of a number of new growth opportunities that is differentiating our company and our strategic direction. We are pleased to have completed this acquisition and look forward to working closely with Rob and Cindy to further build on their record of innovation and fully capitalize on the platform they have created."

Innovative Industrial Properties, Inc. (NYSE: IIP) announced on March 11th, that it closed on the acquisition of a property in Wimauma, Florida, which comprises approximately 373,000 sq. ft. of industrial and greenhouse space, from an affiliate of Parallel, a leading multi-state cannabis company with operations in Florida, Massachusetts, Nevada and Texas. Parallel is the corporate parent company to Surterra Wellness, a market leader and one of the original licensed vertical operators in Florida, with a rapidly growing footprint that includes 39 retail dispensaries across the state and multiple industrial-scale cultivation, production and research facilities. "We are thrilled to execute this transaction with Parallel, and look forward to supporting Parallel as their long-term real estate capital partner in Florida and elsewhere," said Paul Smithers, President and Chief Executive Officer of IIP. "Parallel has a tremendous footprint in Florida with its 39 operating dispensary locations, and we expect the Wimauma facility to be a critical catalyst to Parallel's continued growth and expansion of operations to meet the tremendous patient need for high quality medical cannabis products throughout Florida."

Organigram Holdings Inc. (NASDAQ: OGI) announced on February 20th, that it continues the roll out of its innovative portfolio of recreational adult use cannabis products including vape pens and cannabis-infused chocolate. Organigram has sent its first shipments of its Edison vape pens powered by Feather technology to jurisdictions across Canada from the Company's Moncton production campus. Organigram, for its Edison Cannabis Co. brand, has an exclusive agreement in Canada with Feather Company Ltd., a cannabis innovator committed to the production of premium-quality products that enhance the cannabis experience for consumers. Edison vape pens rely on Feather's innovative technology and pen construction. The well-crafted, inhalation-activated pens are designed to offer adult consumers a simple, intuitive user experience. The ready-to-use vape pens combine sophisticated design, cannabis distillate and curated terpene blends, representative of Edison's star strains' iconic aroma profiles.

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