CBD Underpins Medical Cannabis' Vast Expansion

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Feb 19, 2020, 09:00 ET

NEW YORK, Feb. 19, 2020 /PRNewswire/ -- The legal cannabis industry continues to expand around the world with major contribution to the market coming from continuous legislative victories in North America and Europe. In particular, legalization of medical cannabis and decriminalization in some countries has led to a significant decrease in black-market activity, as people are shifting to legally purchasing cannabis for medical as well as recreational use. In the meantime, local governments reap the benefits through taxation. For instance, the state of California had collected a total of USD 345.2 Million in tax revenue from legal cannabis during the first year of regulated sales in 2018. Revenue generated from these taxes encouraged the local governments to fund several development programs for education and infrastructure. Overall, data by Grand View Research indicates that the medical segment held the dominant revenue share of the cannabis market, accounting for 71.0% in 2019. Medical use of marijuana is strictly categorized as a medicine prescribed by a physician and the distribution of these medicines is regulated by the government. However, by 2027, adult-use is expected to become the fastest-growing segment with adult-use products ranging from a highly potent concentrate to a simple food ingredient. However, in many countries that have legalized medical cannabis, its adult-use remains illegal. And only a few countries like Canada, Uruguay, Colombia, and some states in U.S. have legalized adult use of cannabis. Yet, as more people begin to explore the cannabis marketplace, the industry is positioned to experience substantial growth in the shortcoming future. And according to a research compiled by New Frontier Data, the U.S. legal cannabis market was valued at USD 10.3 Billion in 2018. By 2025, the market is expected to reach USD 30 Billion while exhibiting a CAGR of 14%. American Premium Water Corporation (OTC: HIPH), Puration Inc. (OTC: PURA), Auxly Cannabis Group Inc. (OTC: CBWTF), Liberty Health Sciences Inc. (OTC: LHSIF), Supreme Cannabis Co Inc. (OTC: SPRWF).

In recent years, cannabidiol-based (CBD) products have swiftly emerged. And the growing popularity of CBD is largely attributed to various medical applications that are associated with the products. For example, full-spectrum CBD oil is considered to be a great source of Omega 3 and Omega 6; Omega 3 plays a vital role in creating hormones that regulate inflammation as well as contractions and relaxation of arteries. The Omegas also lower your triglyceride levels in the blood to reduce the chances of suffering from heart disease and stroke. And as of recently, thanks to various technological advancements made in this field, consumers can enjoy the benefits of CBD without ingesting, vaping, or applying lotion. Instead, individuals can simply wear CBD-infused clothing that slowly releases CBD directly into their skin. According to a blog post by Brightfield Group, a consumer insights and market intelligence firm for the CBD and Cannabis industries, Acabada ProActiveWear launched a line of CBD-infused activewear. Acabada ProActiveWear uses technology created by Devan Chemicals, a specialty chemical firm based in Belgium. The patented R-Vital technology consists of microcapsules of CBD infused into the fabric. These microscopic droplets of CBD are wrapped with a protective coating, and friction from the user's skin while exercising causes the capsules to gradually open and release the CBD to be trans-dermally absorbed. Previously, Devan has produced functional fabrics with micro-encapsulated aloe vera, Q10, and vitamin E. "While activewear and knee and arm sleeves for physically active consumers may be the first of CBD-infused textiles, we are also seeing CBD incorporated into other uses such as pillowcases, pajamas, and bed sheets. According to our consumer insights, 30.4% of US CBD users cited chronic pain and 23.6% cited insomnia as some of the top medical conditions for CBD use. Textiles that help facilitate sleep would be helpful to millions of consumers who struggle to get a good night sleep, making CBD-infused textiles a category to watch out for," Brightfield Group indicates.

American Premium Water Corporation (OTC: HIPH) yesterday announced breaking news that "it has closed the transaction with a definitive agreement to acquire domestic distribution rights for Q4 Sports (www.q4sports.com) for a one year period that can be extended upon the consent of the Company and Q4. The agreement was first announced in December 2019. The agreement also provides for a one year exclusive worldwide headwear licensing rights for the Company's Gents division.

'I am thrilled to announce the completion of the distribution agreement with Q4 Sports,' said American Premium Water Corporation CEO, Ryan Fishoff. 'This transaction with Q4 is a milestone event for the Company. I expect this transaction will add significant revenue through expanded distribution points, which is one of the Company's key initiatives in 2020. This deal allows the Company to explore various cross selling opportunities based on the platform Q4 has built, which provides for global reach and aligns with our Company initiative to expand our footprint internationally. We believe the sky is the limit with potential joint distribution deals. I think this will be a huge opportunity for the Gents subsidiary, and should open many new doors for all facets of the business. Today, the Company takes another step forward reaching demographics and potential customers that have not been targeted by CBD companies, and I am excited to begin cross-promoting these new customers and target bases.'

'I expect now that the Company has closed this transaction, shareholders will see many benefits that should increase shareholder value. First and foremost, this deal is expected to have a positive effect on the Company's 2020 numbers; this distribution agreement, when combined with our current operations and strategic relationships, could result in over $1 million of revenues of in 2020. As I've stated, I anticipate that this distribution deal opens many new doors for the Company to sell products, and gives us the opportunity to do many cross-promotions and joint marketing campaigns. I am also a big believer in diversification; I come from a background in private equity and I have seen first-hand the benefits of a diversified offering of products and brands. I feel that offering a diversified product offering in global markets distinguishes the Company from its peers, and should create additional shareholder value. I look forward to providing updates to the investment community on how this transaction will align with the Company's goals for 2020 in the coming weeks and months.'

About American Premium Water Corp.: American Premium Water (OTC: HIPH) is a diversified luxury consumer products company focused on businesses in the health and beauty and biotech sectors. The company is focused on harnessing the powers of Nano technologies paired without cannabidiol ("CBD") to treat health disorders and enhance quality of life. The Company's portfolio includes the LALPINA Hydro and LALPINA CBD brands (www.lalpinahydrocbd.com), Gents (www.gentsco.com), Vanexxe (www.vanexxe.com) and plant + body essentials (www.plantbodyessentials.com). American Premium Water strives in providing only the highest quality hemp CBD sources for its products, with quality control being one of our first and foremost focuses. The Company aims for this standard not only for compliance reasons, but also to provide our customers the highest quality product possible."

Puration Inc. (OTC: PURA) announced recently that had added a second acquisition prospect to its acquisition pipeline with an offer extended to acquire a CBD Pet Products operation. "We recently announced securing a $5 million investment at $0.10 per share to fund the acquisition of CBD infused beverages, edibles and topicals," said CEO Brian Shibley. "Surprise, our CBD infused target opportunities will include pet products and our first candidate is ideal. The company provides concierge pet services through a mobile app portal and already has a thriving client base. They have been developing CBD products and PURA is pursing the acquisition of the CBD products division prior to the launch of the product line. The terms under discussion are attractive to both seller and buyer. The proposed purchase price is in accordance with the pre-launch scenario and seller benefits from PURA funding the marketing launch." PURA announced that it is making a formal proposal to acquire Kali-Extracts Hemp4mula CBD Infused Confections operation. And earlier, PURA announced closing on a USD 5 Million investment to fund the prospective acquisition of cannabis infused beverage, edible and topical operataions. The USD 5 Million investment is structured as a debt facility whereby funds can be drawn as needed to fund acquisitions.

Auxly Cannabis Group Inc. (OTCQX: CBWTF) announced earlier in December the unveiling of its "Cannabis 2.0" products in vape, chocolate and chewable formats which are legally available for sale beginning today under its signature brands, Kolab Project, Foray and Dosecann. To view Auxly's 2.0 product launch video, click here. "Having our initial suite of Cannabis 2.0 products ready to go on the first day sales are legal in Canada is a huge milestone for our company," said Hugo Alves, CEO, Auxly. "Our mission is to make branded cannabis products that consumers love and grow to trust. Our experts at Dosecann have developed high-quality vapes, chocolates and chewables with consumer safety and enjoyment as our top priorities. We are excited to introduce Canadian consumers to our products and our brands on the launch of Cannabis 2.0 and will continue to roll out new and innovative products in the coming quarters as we look to lead, not follow, in the 2.0 market and beyond." Auxly has taken a consumer-centric approach to building a winning portfolio of brands and products. Auxly's four proprietary brands: Kolab Project, Foray, Dosecann and Robinsons, address key market segments and multiple price points across wellness and adult-use markets. The Company's initial product portfolio will be launched under three of the Company's four brands – Kolab Project, Foray and Dosecann.

Liberty Health Sciences Inc. (OTCQX: LHSIF) announced last month that it has partnered with iHeartJane ("Jane") www.iheartjane.com, the leading eCommerce platform for dispensaries and brands in the U.S., to offer a seamless retail shopping experience for Liberty patients who order products on the Company's website at a dispensary level. Liberty now displays its product availability and pricing in real-time on an easy-to-use online ordering platform empowering patients to shop for their favorite brands from their favorite local Liberty dispensary. Currently the service allows patients to reserve their products for pick-up only.

"Liberty remains the gold standard for customer experiences centered around convenience and Jane allows us to set ourselves apart in providing our patients with a variety of integrated technologies that makes their life easier while enjoying our products," said Victor Mancebo, Interim Chief Executive Officer of Liberty. "Jane is a fully automated solution that live-streams all of our products in real-time so our patients will know 100 percent of the time where and when their product is available for pickup. Establishing such a solid platform for our customers is pivotal to our overall growth."

Supreme Cannabis Co Inc. (OTCQX: SPRWF) back in December announced the launch of Sugarleaf by 7AC. Sugarleaf is Supreme Cannabis' newest introduction of high-quality cannabis experiences to the Canadian marketplace. Sugarleaf widens the Company's product offerings and targets consumers who demand a more refined, milder consumption experience as they discover their own cannabis taste preferences and desires. Sugarleaf products are created using the sugary-looking, trichome-dense, dry-cured sugar leaves from 7ACRES' coveted strains. Made with the high-end 7ACRES strains that consumers trust, Sugarleaf offers a consistently high-quality, smooth and flavourful taste, and aroma. Sugarleaf's first product will be rolled joints made with fan-favourite strains of 7ACRES. Additional product formats, focused on offering consumers elegant, ready-to-enjoy and convenient cannabis experiences, will be introduced to the market in the new year, including cannabis 2.0 products. "We are very excited to introduce consumers to Sugarleaf by 7AC. Following on the success of our Blissco brand pre-rolls and our research into consumer preferences, we determined a premium, ready-to-smoke joint would be the perfect product to launch the Sugarleaf line," said Navdeep Dhaliwal, CEO of Supreme Cannabis. "With the addition of Sugarleaf to the Supreme Cannabis brand portfolio, we are reaching a new consumer who might be experiencing high-end cannabis for the first time and desires a convenient product format."

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