Global Cannabis Market Projected to Grow as the Medical Segment Is Slated to Dominate

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Dec 12, 2018, 11:46 ET

NEW YORK, December 12, 2018 /PRNewswire/ --

Cannabis continues its spread around the world, with countries like Germany and Australia already implementing cannabis for medical purposes. Now, as countries begin to legalize cannabis, more regions are expected to follow. According to data compiled by Grand View Research, the global cannabis market is projected to reach USD 146.4 Billion by the end of 2025. Additionally, the market is expected to grow at a CAGR of 34.6% during the forecast period. Despite many other countries emerging in the industry, the U.S. is projected to hold the largest market value, as it registered approximately USD 7.06 Billion in 2016 and is projected to grow at a CAGR of 24.9% from 2017 to 2025. The market will continue to accelerate forward as countries look to adopt cannabis to treat medical maladies such as cancer, mental disorders, chronic pain and others. Item 9 Labs Corp. (OTC: INLB), Tilray, Inc. (NASDAQ: TLRY), Innovative Industrial Properties, Inc. (NYSE: IIPR), Charlotte's Web Hldgs Inc. (OTC: CWBHF), KushCo Holdings, Inc. (OTC: KSHB)

The medical cannabis segment is projected to hold the largest market value. The segment is also forecast to grow to USD 100.03 Billion by 2025, accounting for approximately 68.3% of the total cannabis market. The segment will continue to grow due to high public and private investments into research and development purposes. As research and development continue and expand further, more countries may transition into using medical cannabis as a form of treatment. "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."

Item 9 Labs Corp. (OTC: INLB) just announced breaking news this morning that, "a leading developer and manufacturer of innovative cannabis products and proprietary delivery platforms, today announced the commencement of the second phase of its national expansion plan. The Company is further enhancing its Arizona cultivation and processing facility to include a commercial kitchen for infusion processes and expanded its site by an additional 10,000 square-feet.

"The expansion is a natural evolution for Item 9 Labs as we continue to develop distinctive and organic cannabis solutions for wellbeing. We foresee accelerated growth in the infused-products sector and are prepared to meet those demands," stated Sara Gullickson, CEO of Item 9 Labs. The executive team at Item 9 Labs has instituted a progressive approach to fill present gaps in cannabis retail inventory and advance the industry for mainstream lifestyle markets.

Gullickson represented Item 9 Labs at the 2018 XLive Conference in Las Vegas in December. She discussed cannabis laws and regulations in the live event space as part of the conference's first Cannabis Lab spotlight program.

Headquartered in Southern Arizona, Item 9 Labs owns and operates 50 acres and is one of the largest properties in the U.S. zoned to grow and cultivate medical marijuana. This expansion is phase two in a three-phased expansion plan. This will bring the Company's cultivation and processing facility total to 20,000 square-feet. With manufacturing expansion and the implementation of a commercial kitchen, Item 9 Labs is expected to more than double the Company's current property revenue.

"We look forward to building strategic partnerships with out of state brands planning to enter the Arizona market, while simultaneously developing more effective products for our customer demographic," stated Bryce Skalla, President of Item 9 Labs.

Arizona is one of the more robust medical marijuana programs in the nation, boasting over 160,000 registered patients and sales over $450 million in 2017. In quarter one of 2018, year over year, the state had an 84 percent increase in sales according to BDS Analytics.

"There is immense potential in the ingestibles sector, as well as opportunity for new and unique modalities in the cannabis space. At Item 9 Labs we are focused on developing a boutique line of premium products for the modern cannabis consumer," explained Skalla.

Item 9 Labs is renowned for its Delta 8 THC-derived products and groundbreaking Apollo 710 vape device. Currently vape products command a 74 percent share of the Arizona concentrates market. Over the next six months, Item 9 Labs will ramp up production to full capacity before starting the next phase of its expansion plan in November 2019.

For information visit Item9LabsCorp.com. - About Item 9 Labs Corp.: Item 9 Labs Corp. (OTC: INLB) creates comfortable cannabis health solutions for the modern consumer by developing innovative products and proprietary delivery platforms. The Company is focused on the development of technology and products that administer high-quality medical marijuana through a novel intra-nasal delivery system to deliver significant health benefits. The Company is headquartered in Southern Arizona where it owns and operates 50 acres, one of the largest properties in the U.S. zoned to grow and cultivate the medical marijuana flower. Item 9 has a proven track record of providing consumers with high-quality medical marijuana flower and products focused on organic, cost-effective solutions for whole body health. By combining high-quality, medical-grade product with the Company's proprietary nasal mucus-membrane delivery system, Item 9 plans to produce the industry's first market medicated nasal delivery device that administers specific cannabinoid dosing to meet the growing demand of todays modern cannabis consumer. For more information, visit us online at http://www.Item9labscorp.com and http://www.Item9labs.com ."

Tilray, Inc. (NASDAQ: TLRY) is a global pioneer in the research, cultivation, production and distribution of medical cannabis and cannabinoids currently serving tens of thousands of patients in twelve countries spanning five continents. Tilray, Inc. recently announced that after completing an acquisition of its existing import and distribution partner Alef Biotechnology SpA, the Company has officially relaunched as Tilray Latin America SpA, a wholly-owned subsidiary of Tilray. Tilray Latin America will further strengthen Tilray's position as a global leader in the medical cannabis market. Tilray currently has medical cannabis products available in twelve countries and operates globally through its wholly-owned subsidiaries in Australia & New Zealand, Canada, Germany, and Portugal. Tilray Latin America will import, produce and distribute Tilray branded medical cannabis products in Chile and create a hub to distribute Tilray products throughout Latin America, subject to local laws. Alan Nudman, as General Manager, and Ariel Nudman, as VP of Sales, will oversee the strategic growth of Tilray Latin America under the global leadership of Tilray Inc.

Innovative Industrial Properties, Inc. (NYSE: IIPR) is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. recently announced that it had closed the acquisition of the property located at 10070 Harvest Park in Dimondale, Michigan, which is currently under development and expected to comprise approximately 56,000 sq. ft. upon completion. Concurrent with the closing of the purchase, the Company entered into a long-term, triple-net lease agreement with Green Peak, which intends to utilize the facility for medical cannabis cultivation and processing upon completion of development. The initial term of the lease is 15 years, with two options to extend the term for two additional five-year periods. The lease provides for an initial annualized aggregate base rent of 15% of the sum of the initial purchase price, Additional Purchase Price and TI Allowance, subject to three months of rent deferral at the beginning of the term. The aggregate base rent is subject to 3.5% annual increases during the term of the lease, and Green Peak is also responsible for paying the Company a property management fee equal to 1.5% of the then-existing aggregate base rent. "We are very pleased to enter into this long-term relationship with Green Peak and its strong management team, and to bring our platform to Michigan, a state that we see as presenting a tremendous opportunity," said Paul Smithers, President and Chief Executive Officer of Innovative Industrial Properties. "With this acquisition, we have acquired nine properties across seven states, continuing our diversification and growth, while remaining focused on executing in line with our rigorous underwriting standards."

Charlotte's Web Holdings, Inc. (OTCQX: CWBHF) is the market leader in the production and distribution of innovative hemp-based cannabidiol ("CBD") wellness products. Recently, Charlotte's Web Holdings, Inc. has surpassed 3000 retail locations across the United States. At the end of 2017, Charlotte's Web products were sold in approximately 2,000 locations. The Company disclosed recently that it surpassed its 2018 year-end goal of 3,000 locations during the 3rd quarter. With CBD gaining mainstream market momentum, Charlotte's Web, the industry pioneer and category leader in hemp-based CBD, has expanded its suite of product offerings across a wider variety of retailers, from small specialty health food stores to now including regional pharmacy and grocery chains. The Company recently added more than 40 Bartell drug stores in the North West. Charlotte's Web Chief Executive Officer Hess Moallem said, "While we are thrilled to beat our retail expectations for the year, we know this is just the beginning of our continued expansion both domestically and worldwide. We are deeply committed to the millions of people who benefit from Charlotte's Web and we will continue breaking new ground to ensure our products are made available in as many retail locations as possible."

KushCo Holdings, Inc. (OTCQB: KSHB) is the parent company to a diverse group of business units that are transformative leaders across several industries. KushCo Holdings, Inc., the parent company of innovative industry leaders such as Kush Supply Co., Kush Energy, The Hybrid Creative, and Koleto Packaging Solutions, which provide a range of services and products for a variety of industries including the regulated cannabis and CBD industries, recently reported its financial results for its fiscal year 2018, for the period ended August 31^st, 2018. Revenue was up 177% Year-over-Year to USD 52.1 Million. Gross margins were 24.2%, compared with 35.2% in the prior year period, this is primarily related to the year-end inventory adjustments of USD 2.8 Million. Excluding this year end adjustment, gross margins for the year would have been 30%. Nick Kovacevich, Chairman and Chief Executive Officer, commented, "We are exceptionally pleased with the financial results we achieved during the fiscal year with revenues of USD 52.1 Million, representing 177% growth compared to approximately USD 18.8 Million in fiscal 2017. Our strong revenue growth was the result of dramatic growth in our most critical markets, with growing customer numbers, an increasingly diversified offering and expanded facility capabilities. Our growth was further supported by an expanded global presence with recently-opened offices in Canada and China. While we are disappointed with the impact our dramatic growth has had on margins, we believe they are short-term consequences and we're pleased to have already implemented several initiatives to improve margins on a go-forward basis."

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