Alcohol Consumption Drops With Cannabis Legalization Abound

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Jul 12, 2019, 09:00 ET

NEW YORK, July 12, 2019 /PRNewswire/ -- The steady decrease in alcohol consumption has led consumers to find new alternatives. And specifically, the rise of cannabis is directly correlated with declining alcohol consumption rates. Investment bank firm Cowen & Co. reported that legal adult use cannabis states witnessed binge drinking rates fall by 9% below the national average, and 11% below non-cannabis states. However, newly added states such as California and Nevada currently have higher rates of binge drinking intensity and lower levels of cannabis consumption. As a result, Cowen said it is reasonable to assume that as more states legalize adult use cannabis, the alcohol binge drinking rates will begin to falter. The Centers for Disease Control and Prevention estimated that 17% of the U.S. population engaged in binge drinking, meaning that 1 in 6 reported doing so 4 or more times a month. In states that legalized adult use, the number of binge drinking sessions per month was 9% below the national average. In particular, many millennials have opted to consume cannabis over drinking alcohol. For instance, according to a MarketWatch article, a millennial said that she prefers to consume cannabis over alcohol because it saves her more money and doesn't cause intoxicating effects of alcohol. According to a Yahoo News poll in 2017, it was concluded that the majority of the 55 million recreational marijuana users in the U.S. are millennials. Meanwhile, a national survey conducted by the Monitoring the Future Study uncovered that the share of college students drinking alcohol daily fell from 4.3% in 2016 to 2.2% in 2017. Furthermore, Cowen & Co. analysts project the U.S. cannabis market to reach sales of approximately USD 75 Billion by 2030. And while the U.S. accounts for a majority of the global cannabis market share, other regions are rapidly emerging and witnessing faster growth rates. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Aphria Inc. (NYSE: APHA) (TSX: APHA), Organigram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD).

Canada became just the second nation ever to legalize cannabis in 2018. However, despite legalizing cannabis, the industry still faces multiple legal barriers in the country. Nonetheless, the Canadian market is positioned to become a major industry growth factor, as ArcView Market Research and BDS Analytics expect the legal cannabis spending in Canada to grow at a CAGR of 44.4% throughout a forecast period until 2024. Compared to a previous report by the two research firms, the Canadian market is accelerating at a faster rate than the projected worldwide legal spending CAGR of 26.7% over a five-year frame from 2017 to 2022. Canada's cannabis legal spending is also expected to grow at a much more rapid rate compared to other regions primarily because of its large addressable market. In comparison, Uruguay's cannabis market is relatively small, despite having legalized cannabis entirely nearly 6 years ago. In 2018, it was estimated that 147,000 Uruguayans between the ages 18 and 65 consumed cannabis, according to CBS. On the other hand, Statistics Canada estimated that approximately 5.3 million or 18% of Canadians aged 15 years and older reported using cannabis during the first quarter of legalization. However, a major drawback to a large consumer base is that it makes it challenging for cultivators and vendors to meet the demand, especially when the industry is relatively new. Generally, large-scale corporations stand out among the competition and thrive because of their efficiency. However, smaller businesses have turned to the art of cultivating "craft cannabis" in order to compete with the industy's behemoths. Craft cannabis is known to come from an attentive procedure of tending to each individual plant to ensure premium and high-quality buds. The tedious process requires growers to constantly examine each plant to avoid molding or infestations and while the process may be laborious and tiresome, craft cultivators are able to achieve a premium end product that large-scale companies are unable to grow. "A lot of the licensed producers right now, their goal as publicly traded companies is producing the cheapest cannabis possible for the commercial market," said Lisa Campbell, Chief Executive Officer of Lifford Cannabis Solutions. "A lot of people say hand-trimmed buds is craft, so the trim is really important. If it's dense and not fluffy, it's great, and obviously, smell and flavour are factors. It's like getting a bottle of wine for thousands of dollars – there will be certain products that will fetch a premium."

Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT) is also listed on the Canadian Securities Exchange under the ticker (CSE: CRFT). Earlier last month, the Company announced the "addition of three well-respected cannabis experts to the growing Pasha family: Scientific researcher Dr. Cris Felipe Alves, second-generation cultivator and consultant Travis Lane, and lifelong cultivator Kemal Morris.

As a solution provider to the craft cannabis industry, Pasha subsidiary BC Craft Supply Co. Ltd. ("BC Craft Supply") aims to provide cannabis farmers with the tools to transition to new regulations governing the micro-cultivation licence category. These experts will assist farmers in making that transition.

'I'm thrilled to have these experts join our team, and, with their support, I look forward to disrupting the market with craft products that will help solve Canada's ongoing supply chain issues,' said Patrick Brauckmann, Executive Chairman of Pasha Brands. 'With these additions to the Pasha family, I'm confident that enthusiasm for craft products will continue to grow.'

Dr. Cris Felipe-Alves has worked in academic and commercial settings in Australia, Asia, and North and South America, and holds a B.Sc in Biological Sciences from the University of Brasília, and a PhD in Molecular Biology and Biochemistry from Nagoya University. While working as a senior scientist at a global diagnostics company, he led a team of researchers from discovery to R&D and sales of molecular tools designed to detect cancers non-invasively. During this time, he became interested in the potential for cannabis as a curative agent against several types of cancer. Since then, he has worked as an extraction specialist and a Quality Assurance Manager. He will act as the Senior Quality Assurance Person at BC Craft Supply.

'Here at Pasha, I feel at home and am proud to be part of a brand house that has a focus on craft products,' said Dr. Felipe-Alves. 'I look forward to helping Pasha generate safe and efficient cannabis-based products that suit the needs of both recreational and medical consumers both in Canada and around the world.'

Renowned cultivator and consultant Travis Lane has been growing cannabis for more than 20 years. An organic, living-soil-based cultivator who has advocated for the facilitation of pesticide-free, sun-grown cannabis production, Lane has been involved in the founding of numerous small cannabis businesses over the last decade, including a successful chain of storefront dispensaries, a thriving online mail order service, and was a founding partner in one of the most successful hydrocarbon extraction brands in the country. Under legalization, Lane has divested from the illicit market to focus on multiple Cannabis Act license applications, as well as his work with Groundwork Consulting, focused on government relations and licensing for cultivation and retail, and Levity Solutions, a multi-purpose cannabis consultancy focused on assisting aspiring legal cultivators. He will act as a consultant for Pasha Brands and its subsidiaries.

'The level of talent and expertise that exists in the prohibition-era marketplace is beyond impressive,' said Lane. 'These long-time innovators will represent a huge market factor once licensed, and I am proud to help Pasha facilitate this next wave.'

Kemal Morris is a lifelong cultivator who has had his hands in the soil 'since before he could walk'. He watched his parents grow their own food - and cannabis - on Saltspring Island, British Columbia. Soon after Canada launched its first medical cannabis program in 2001, he spent 14 years learning the intricacies of breeding and extract production. In addition, Morris has spent the last four years launching a prominent Canadian Licensed Producer. He is passionate about patients and has connected hundreds of struggling patients with medicine. As the Master Grower for Pasha Brands' owned Vancouver Island Licensed Producer, MedCann, Morris will act as facility designer, cannabis expert, educator and facilitator.

'After completing a four-year term in the regulated industry, I am excited to work with Pasha,' said Morris. 'I finally have the opportunity to share all that I have learned with the cannabis enthusiasts I came up with, and I'm proud to be part of a company that is breaking the big business mold - affording a rightful place to the people who risked everything to create this thriving industry.'

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 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=bhaATntJ52Y

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000 kg per annum and sales and operations in 24 countries across five continents, is one of the world's largest and leading cannabis companies. Aurora Cannabis Inc. and EnWave Corporation recently announced that the companies had entered into a royalty-bearing commercial license agreement, providing Aurora with the exclusive rights to EnWave's patented Radiant Energy Vacuum (REV™) drying technology for the production of cannabis materials in the European Union, excluding Portugal. Aurora has also secured exclusive license options for both Australia and South America, excluding Peru, exercisable pursuant to minimum REV™ machine purchase order requirements. Additionally, Aurora has signed a non-exclusive sub-license to use REV™ technology in Canada. The companies furthermore announce that Aurora has placed a purchase order for two of EnWave's 120kW REV™ dehydration systems for its Aurora Sky and Aurora Sun facilities in Canada, as well as the intention to purchase a third 120kW REV™ dehydration system for its Aurora Nordic facility in Denmark within sixty days. The REV™ dehydration systems will be used to increase the throughput of material for extraction and use in derivative cannabis products. Aurora has also acquired a 10kW pilot-scale REV™ machine for product development, protocol development and R&D. "EnWave's technology offers very significant benefits that further improve the economic returns on our Sky Class facilities," said Terry Booth, Chief Executive Officer of Aurora. "The technology provides us with industrial-scale flow-through, reducing working capital requirements, accelerating time to market from harvest, as well as increasing our ability to produce bulk-sale cannabis for extraction and use in derivative products. Our ownership interest in EnWave and the exclusive license arrangement in many of our current and target markets creates the potential to generate additional financial synergies."

Aphria Inc. (NYSE: APHA) (TSX: APHA) is a leading global cannabis company driven by an unrelenting commitment to our people, the planet, product quality and innovation. Aphria Inc. recently announced several new executive appointments including James Meiers to the role of Chief Operating Officer, Aphria Leamington, Tim Purdie as Chief Information Officer & Chief Information Security Officer, and Maureen Berry as Vice President, Corporate Human Resources. The Company also announced that Jakob Ripshtein, Aphria's President, will resign from the Company. Mr. Ripshtein will remain in his current role until June 7th, 2019. His current responsibilities will be shared among the existing senior leadership team. "On behalf of the Board of Directors and Aphria team, we thank Jakob for his contributions to the Company over the past year and wish him well in his future endeavors. He has been instrumental in assembling the incredible team we are fortunate to have today that will carry his responsibilities forward," said Irwin D. Simon, Interim Chief Executive Officer of Aphria Inc. "I am very pleased to welcome Jim and Maureen to Aphria, and to promote Tim. A top priority for us is to continue to build our executive talent and culture. We believe today's appointments demonstrate our commitment to adding depth, experience and leadership to our team as we further advance Aphria's strategic priorities in Canada and around the world. At Aphria, we remain focused on creating long-term shareholder value by leveraging our strong brand positioning, superior distribution model, product innovation, industrial scale cultivation and automation, medical-use leadership, and our strategic global platform, which we intend to amplify using proceeds from the Company's recent USD 350 Million offering," continued Simon. "We are pleased to share that the ramp-up of our growing operations in Parts IV and V at Aphria One are progressing smoothly and Aphria One is on-track to reach its annualized production capacity of 110,000 kilograms by the end of 2019"

Organigram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI) is a NASDAQ Global Select and TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada. Organigram Holdings Inc. recently announced that it had received approval from Health Canada for the licensing of 17 additional cultivation rooms within the Phase 4A/4B perimeter of the building. Thirteen of 31 Phase 4A cultivation rooms originally contemplated have previously been licensed. The 31st room initially contemplated for Phase 4A is being moved from the Company's 4A plans to its 4B licensing plans thereby adjusting Phase 4A from 31 to 30 rooms and Phase 4B from 32 rooms to 33 rooms. As a result of this approval, cannabis plants will be moved into these new cultivation rooms on a rolling basis commencing immediately. The Company anticipates being able to begin to harvest product from these newly on-boarded rooms by the end of September, based on its historical cultivation timelines with the ability to ship dried flower as early as mid-fall of 2019. "Sustainable growth, exceptional quality and constant innovation are the pillars of our overall strategic approach," explains Greg Engel, Chief Executive Officer, Organigram. "We are proud to continue to increase our physical capacity to meet the needs of cannabis consumers across the country while also bringing new thinking and technology to our production."

The Green Organic Dutchman Holdings Ltd. (OTCQX: TGODF) (TSX: TGOD) is a publicly traded, premium global organic cannabis company, with operations focused on medical cannabis markets in Canada, Europe, the Caribbean and Latin America, as well as the Canadian adult-use market. The Green Organic Dutchman Holdings Ltd. recently announced that it had secured a cannabis supply agreement with Alberta Gaming, Liquor & Cannabis ("AGLC"), further expanding its footprint in Western Canada. AGLC, under the brand Alberta Cannabis, is Alberta's legal, non-medical online cannabis store. "Alberta is an important market for us as we continue to expand our distribution channels across Canada," commented Brian Athaide, Chief Executive Officer of TGOD. "With our production facilities in Hamilton, Ontario and Valleyfield, Quebec coming online in phases, we are thrilled to start distributing TGOD's premium certified organic cannabis to AGLC."

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