Approval of US Farm Bill Green Lights Hemp-Fueled CBD Revolution

NEW YORK, December 13, 2018 /PRNewswire/ --

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US lawmakers finally struck a deal for the landmark 2018 Farm Bill on November 29, ending months of partisan debate and kicking off a new era of hemp-derived cannabinoid markets. The bill effectively legalizes hemp growing for the first time in nearly a century, and opens up the possibilities for the production of cannabidiol (CBD). Several companies are primed to benefit from the mainstreaming of CBD, including Green Growth Brands (formerly Xanthic Biopharma Inc)(CSE:GGB)(OTC:XTHCF), Medmen Enterprises Inc. (CSE: MMEN)(OTC: MMNFF), Acreage Holdings Inc. (CSE: ACRG)(OTC: ACRZF), Green Thumb Industries (CSE: GTII)(OTC: GTBIF), and Harvest Health & Recreation (CSE: HARV)(OTC: HTHHF).

Now with a green light to CBD, developers of cannabinoid-infused products are off to the races. Ahead of the Farm Bill's announcement, Green Growth Brands (CSE:GGB) (OTC:XTHCF) established its first-mover advantage in the CBD space with its brand, Seventh Sense.

Seventh Sense is a unique line of CBD-infused beauty products. Green Growth Brands (CSE:GGB) (OTC:XTHCF) aims to have the brand on shelves in all types of retail locations including drug stores, grocery stores, and the company's own chain of stores dubbed The Source.

Containing less than 0.3% tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana, hemp is technically speaking a species of the cannabis plant. However, hemp's medicinal value comes from THC's non-psychoactive cannabinoid cousin CBD, which is already being infused into all types of consumer products, and more are soon to come. With this newly reached agreement, CBD will no longer be in a legal grey area.

CBD's market potential has already been projected to reach $22 billion by 2022 thanks to its non-intoxicating nature. The mainstream potential for CBD products is quite high, even for people uncomfortable with consuming cannabis products that contain the psychoactive cannabinoid, THC.

Back in September, the US Drug Enforcement Agency (DEA) downgraded CBD from a Schedule I drug to Schedule V, allowing for FDA-approved drugs to contain the cannabinoid. The DEA's announcement arrived shortly after rumours began to swirl over leading soft drink bottler Coca-Cola entering the cannabis-infused drink market - only for Coke to back away from the rumours later in October.

Pre-rolled CBD cigarettes are already starting to catch on in popularity, while new beauty products are cropping up with CBD in their list of ingredients-it's official that CBD is going mainstream. Now the market is anticipating a flood of new CBD-infused products to soon hit the market across all 50 states.

The Farm Bill is triggering a CBD wave. Companies with more CBD offerings are better positioned to profit from this growing product category than their competitors that are more invested in unrefined cannabis. The result may ultimately make the "CBD-heavy" pot stocks better long plays than their more THC-friendly peers.

Over the long term, the CBD market is projected to offer a compound annual growth rate of 147% through 2022. Versatility is CBD's strongest factor, given that it can be incorporated into oils, capsules, vapes, infused beverages, edibles, and pretty much any alternative form of consumption you can think of.

Marketing and Retailing the CBD Wave 

CBD's popularity continues to grow, as new products hit the mainstream. Several articles and reviews of everything from CBD-infused foods, beverages, to beauty products have been written in the last 6 months from mainstream publications around the world.

Now the task of producers is to get these new products in front of the customer on shelves everywhere. So far there's been a disconnect between producers and mainstream retail outlets-at least until recently.

Led by CEO Peter Horvath whose CV includes C-level roles with Victoria's Secret, American Eagle Outfitters, and DSW, Green Growth Brands (CSE:GGB) (OTC:XTHCF) has a strong strategy in place to spread its products everywhere. With a team that has ties to several other retail giants including Bath & Body Works, getting Green Growth products (including the Seventh Sense brand) on mainstream shelves should be a smooth process.

The Seventh Sense line is comprised of beautiful, efficacious, CBD infused beauty products that will soon be available nationally. Seventh Sense is meant to awaken your body's natural healing system to promote calm, better sleep, happiness and health, through a variety of forms, including body wash, lotions and balms, hair care, lip balm and sun products.

Given CBD's rapidly growing popularity, several outlets will be seeking out products to sell with the newly-legalized ingredient. The mainstream appeal of CBD products isn't just restricted to the US, as Walmart Canada is pondering the possibility of selling cannabis products north of the border as well.

The potential for new CBD products is seemingly limitless, now that US farmers will likely be ramping up the growth of hemp, coupled with new developments always on the horizon.

Beyond Seventh Sense, Green Growth Brands (CSE:GGB) (OTC:XTHCF) is bringing the market several offerings, including its super chain of dispensaries called The Source (where all types of products are sold), an outdoorsy/active living brand called CAMP brand, a surf culture Meri + Jayne brand, and its feminine targeted Green Lily botanical products.

The company has the potential to develop several more brands and products thanks to its state-of-the-art, patent-pending developer brand Xanthic Biopharma. Xanthic has developed a proprietary process to make both THC and CBD water soluble.

Water solubility is perhaps the keystone of new product development for cannabinoids. Many more products from beauty products to edibles and drinks could spawn from this technology.

Armed with water-soluble CBD (and THC), along with ties to retail shelves all over the country, Green Growth Brands (CSE:GGB) (OTC:XTHCF) has all the tools to capitalize on the newly legalized CBD landscape.

Additional CBD Beneficiaries 

Much like Green Growth Brands and its flagship The Source chain, MedMen Enterprises Inc. (CSE: MMEN) (OTC: MMNFF) is primarily focused on the cannabis retail sector. MedMen recently announced signing a definitive agreement to acquire the retail operations and license for a location in Santa Ana, California through an all-stock transaction. The acquisition was to position the company in the affluent Southern California district which currently has a limited number of licensed dispensaries. MedMen already carries an array of CBD products, including its Wellness line of high CBD (no THC) offerings including a vape pen, drops, and gels.

New products and offerings are also on the way from Acreage Holdings Inc. (CSE: ACRG) (OTC: ACRZF), which recently acquired Form Factory Inc., a multi-state manufacturer and distributor of cannabis-based edibles and beverages. Acreage acquired Form Factory in an all-stock transaction valued at $160 million. Form Factory's expertise is as a one-stop-shop for developing, manufacturing, and distributing cannabis products of any form, which now will be under the Acreage Holdings umbrella. Acreage's goal now is to become the first national cannabis Consumer Packaged Goods (CPG) company, capable of creating and distributing predictable and scalable proprietary brands, nationally, and potentially delivering those goods to traditional non-cannabis CPG companies such as Nestle, Mars or Procter & Gamble. 

Another significant entry into the Nevada cannabis retail space is Green Thumb Industries (CSE: GTII) (OTC: GTBIF), which recently acquired Integral Associates. Through the Integral acquisition, GTI just picked up three nationally-recognized dispensaries operating under the Essence brand, including the first and only dispensary on the Las Vegas Strip. As well, the deal included two world-class cultivation and processing facilities in Desert Grown Farms and Cannabiotix NV, which has been recognized as a High Times Cannabis Cup award winner several times over.

Vertically-integrated Harvest Health & Recreation (CSE: HARV) (OTC: HTHHF) recently announced a joint venture with Aina We Would, LLC, to create a national real estate investment vehicle with up to $100 million in committed Capital for approved projects. The new entity plans to focus on serving clients in the cannabis marketplace with plans to buy, develop and finance new construction projects, engage in land purchases, capital improvements and sale-leasebacks to Harvest and other operators in the cannabis industry. Harvest's footprint includes owning more than 40 cannabis licenses with a domestic footprint that includes real estate, equipment and other assets in 11 states, including Arizona, Arkansas, California, Colorado, Florida, Maryland, Massachusetts, Nevada, North Dakota, Ohio and Pennsylvania.

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