Online Growth is Now Fueling a Second Boom for Cannabis Companies

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Sep 25, 2019, 08:50 ET

PALM BEACH, Florida, Sept. 25, 2019 /PRNewswire/ -- Global demand for cannabis has been exceptionally explosive. In fact, at current pace, research firm, BDS Analytics says U.S. sales of CBD products alone could grow from $1.9 billion in 2018 to more than $20 billion by 2024. That's opening a wide range of opportunities for retailers, and it's also forcing many of those same retailers online. After all, if they fail to establish an online business model, they could easily put themselves out of business. To assist with that transition, companies like Shopify are introducing new features to help cannabis retailers establish and expand an online presence. That's creating sizable opportunity for companies such as CannaOne Technologies Inc. (CSE:CNNA) (OTC:CNONF), Shopify Inc. (NYSE:SHOP), Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), Aurora Cannabis Inc.(NYSE:ACB) (TSX:ACB), and Aphria Inc. (NYSE:APHA) (TSX:APHA).

CannaOne Technologies Inc. (CSE:CNNA) (OTCPK:CNONF) BREAKING NEWS: CannaOne Technologies Inc. just announced announce that it has entered into a Memorandum of Understanding with LevelOut UK (LO) on September 16, 2019. LevelOut UK Ltd., will act as the majority equity partner in a joint venture corporation (JV), being established between LO and CannaOne to service the UK market. CannaOne will contribute to the JV exclusivity to their proprietary software for the UK market, while further providing its industry knowledge, digital marketing expertise and access to its existing American CBD brand supply chain for sale on LO. LevelOut UK Ltd. will provide between £150,000.00 to £200,000.00 in initial start-up capital to the JV. CannaOne Technologies CEO, Mr. Riby-Williams, commented "LevelOut UK has a strong sense of the direction and trend of the CBD Market in the UK. The progression towards the consummation and launch of this JV could not be timelier, as UK and European consumers are ever keener to source and utilize CBD Products. As part of the JV operation it is our intent to open up the breadth of our US BWell marketplace supply chain to the UK market and thus introduce popular US products on the other side of the pond. This soon to be realized JV is a testament to our goal to be omnipresent in markets all over the world. This is one more pin on the map for us, as we continue in discussions and negotiations with other groups for the establishment of CBD marketplaces in additional lawful domestic and international geographic locales."

Riby-Williams added "Last week Shopify's announcement on providing services US merchants for CBD is the market validation we have been expecting and waiting for. We believe that this rising tide will drive global cannabis commerce space and continue to support our business thesis playing out. We see the majority of these emerging countries coming online with proper regulation, and the markets will evolve to the notion of the 80-20 philosophy where a handful of players will have the lion's share of the sales volume. Our fully customized, dedicated and purpose-built THC / CBD marketplace platform can react with speed to changing market conditions, help make data driven decisions and provide our clients and partners with a team of cannabis marketing experts that prove to be essential, and acts as a core differentiator in the industry."

Other related developments from around the markets include:

Shopify Inc. (NYSE:SHOP) just announced new features on its platform to help U.S. merchants sell hemp and hemp-derived Cannabidiol (CBD) products online or in brick-and-mortar retail locations, where permitted by law. Starting today, U.S.-based retailers of all sizes can start and grow their businesses by selling select hemp or hemp-derived CBD products using the trusted commerce platform that powers more than 800,000 merchants globally. "Shopify has unmatched expertise in emerging industries, along with the resources merchants need to be successful in the fast-growing market of hemp-derived CBD products in the U.S.," said Harley Finkelstein, Chief Operating Officer, Shopify. "Shopify's reliable technology and extensive partner network means that businesses can ride the wave of demand for these products and give consumers more choice." Shopify now offers merchants including Josie Maran and Cannuka a reliable commerce platform to sell hemp-derived CBD products, positioning them to succeed in one of the fastest growing regulated industries in America. Merchants can take advantage of Shopify's powerful retail operating system, leveraging commerce tools to start, manage, and grow their business from a single backend.

Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) just announced that it has received a license from Health Canada for its KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan. Including the Smiths Falls site and the recently licensed BC Tweed extraction site, Canopy Growth now operates three significant extraction assets to support the throughput required for large scale value-add product development. Canopy Growth recently retrofitted the now fully licensed KeyLeaf facility in Saskatchewan, a company with over 50 years of experience in the extraction industry. This facility is expected to be online in the Fall of 2019 and has the capacity to extract up to 5,000 kilograms of hemp or cannabis biomass per day. The application for the license was submitted under KeyLeaf's previous name, POS Management Corp. and will be updated in due course. The newly licensed extraction platform is located in close proximity to Canopy Growth's large-scale outdoor hemp and cannabis grow operations. The Company looks forward to the additional capacity increasing production efficiency, augmenting output volume, and ultimately reducing operational costs for value-add products set to be rolled out in the Canadian recreational and medical markets at the end of calendar year 2019. "With this milestone, we are executing against the vision of making strategic investments today in order to deliver results over the long term," said Mark Zekulin, CEO, Canopy Growth. "This license will ensure we have the supply of extraction inputs for the medical, CBD, and recreational markets, especially the next generation of value-add, high margin cannabis products here in Canada."

Aurora Cannabis Inc.(NYSE:ACB) (TSX:ACB) announced its financial and operational results for the fourth quarter and fiscal year ended June 30, 2019."In 2019 Aurora took its place as the global leader in cannabis production, research, innovation, and international market development. We are executing on all our strategic priorities," said Terry Booth, CEO. "Our best in class cultivation methods allow us to grow consistent, high-quality cannabis at scale. Because of this, we've delivered solid revenue growth in the fourth quarter. We are working to extend our reach in the U.S. markets. Our partnership with the UFC is a basis to explore CBD-from-hemp and hemp food products. We are also exploring additional opportunities and leveraging our Strategic Advisor. We are focused on building a sustainable, high-margin business while providing patients and consumers with access to safe and reliable medicine." Glen Ibbott, CFO, added, "We continue to see strong growth in cannabis revenues in both medical and consumer categories. Our cultivation execution continues to drive production costs lower and improve gross margins. Aurora's diversified product portfolio remains in demand with patients and consumers alike. With the Canadian launch of derivative products in the coming months, we have made the necessary investments to ensure readiness and focus on a variety of value-added products. We are very excited to supply an expanded consumer market with premium cannabis and new product forms."

Aphria Inc. (NYSE:APHA) (TSX:APHA) just posted its results for the fourth quarter and fiscal year ended May 31, 2019. "It's a new day at Aphria. Our team's solid execution across key areas of our business resulted in strong adult-use revenue growth and a profitable fourth quarter," stated Irwin D. Simon. "Over the last six months, our organization identified immediate priorities to help generate substantial progress near-term and long-term. We built upon existing business fundamentals and capabilities, streamlined processes, strengthened governance, and focused on building brand awareness. Together, we have nurtured an entrepreneurial culture of accountability through data-driven decision-making for value creation in the global medical and adult-use cannabis industry. Today's Aphria has a stronger foundation for long-term growth and success." The company posted net revenue of $128.6 million in the fourth quarter, an increase of 75% from prior quarter and 969% from prior year; revenue for adult-use cannabis of $18.5 million in the fourth quarter, up 158% from prior quarter; and net income of $15.8 million and adjusted EBITDA of $0.2 million in the fourth quarter.

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