Regulatory Bodies Appraise Cannabis in a New Light With Industry Momentum Growing

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Mar 25, 2019, 09:00 ET

NEW YORK, March 25, 2019 /PRNewswire/ -- Cannabis legalization has steadily become a trending topic among national governments over the course of recent years. The proliferation of countries moving to legalize cannabis on some form has also exponentially grown concurrently. Prior to 2018, Uruguay was the only country to have legalized cannabis entirely, now, Canada has joined Uruguay to become the second country ever to legalize cannabis. Additionally, several countries have also decriminalized cannabis or legalized the plant for medical applications. The World Health Organization (WHO) had even proposed recommendations to reschedule cannabis, THC, and CBD in international treaties, as the growing adoption of cannabis has been noticed by government leaders around the globe. The U.S. Drug Enforcement Agency has already moved to delist CBD as a Schedule 1 Drug, but under the Single Convention on Narcotic Drugs, cannabis is still classified as a Schedule 4 drug, which is the strictest regulation available. The United Nations Commission on Narcotic Drugs has so far met throughout March in Austria to discuss the matters of cannabis legalization. Furthermore, the U.S. Food and Drug Administration had allowed the public to submit comments regarding the WHO recommendation. The FDA then announced that it would take the comments and recommendations into consideration and prepare the U.S.'s position on cannabis, according to Forbes. This widespread cannabis advocacy has brought forth the matter to international agencies and organizations, who are now persuaded to reconsider the plant. Moreover, the growing adoption of cannabis around the globe has positioned the cannabis industry to become a prominent market. According to data compiled by Verified Market Intelligence, the global marijuana market was valued at USD 42.20 Billion in 2017 and is projected to reach USD 466.81 Billion by 2025. Additionally, the research also suggests that the market will grow at a rapid CAGR of 35.3% from 2018 to 2025. CLS Holdings, USA Inc. (OTC: CLSH) (CSE: CLSH.U), New Age Beverages Corporation (NASDAQ: NBEV), Arcadia Biosciences, Inc. (NASDAQ: RKDA), Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE), Origin House (OTC: ORHOF) (CSE: OH) .

The cannabis marketplace is currently hindered by a lack of research and development, which is the biggest concern for both consumers and federal governments. According to the 2018 National Cannabis Survey, which documented the fourth quarter cannabis use following Canada's legalization, 76% of Canadians who purchased cannabis said that quality and safety was the number one matter. In total, approximately 15% of Canadians reportedly used cannabis in the fourth quarter, and nearly half of that group use cannabis for non-medical reasons exclusively. Canada has only legalized cannabis for several months now, but the survey noted that the 15% of Canadian who use cannabis will grow to 19% whether it is for medical or recreational purposes. Similarly, in the U.S., the number of users is also growing as research by Annals of Internal Medicine suggested that approximately 14.6% of Americans used cannabis in 2017. In addition, the support for cannabis legalization has also grown tremendously in the U.S. In 2009, 44% of Americans supported legalization, then nearly a decade later, the number grew to 66%. "The industry is at about 5 percent of what it will be someday," concurs Tyler Stratford, Director of Client Operations for cannabis consulting firm Canna Advisors. "Even if the path forward isn't straight, we're certainly on a path forward. The tide has changed, and there's no turning it back now."

CLS Holdings, USA Inc. (OTCQB: CLSH) (CSE: CLSH.U) is also listed on the Canadian Securities Exchange under the ticker (CSE: CLSH.U). Earlier this month, the Company announced that, "it has entered into a definitive agreement to acquire an 80% ownership interest in CannAssist, LLC. This agreement, along with the previously announced option agreement to acquire In Good Health, marks a continuation towards CLS's goal to become a significant entity in the rapidly growing Massachusetts market.

CannAssist has entered into a contract with the City of Leicester and has applied for a state cultivation grow license. The planned Leicester 86,000 square foot facility is expected to produce its first harvest in Q1 of 2020. This facility is expected to produce 28000 pounds of flower along with 240,000 grams of extract. Once fully operational, total revenues from the facility are anticipated to exceed $100 million. CLS anticipates generating substantial positive cash flow from the grow facility.

Massachusetts has a population of 6.9 million people as compared to 5.6 million people in Colorado. Massachusetts is also centrally located to the dense population of New England with a less than 100-mile drive from Rhode Island, Connecticut, New York, New Hampshire and Vermont. The city of Denver currently has approximately 364 dispensaries compared with the entire State of Massachusetts, which currently has less than 50.

Jeff Binder, Chief Executive Officer of CLS Holdings USA, commented, 'We are extremely excited to enter into this agreement. The market dynamics in Massachusetts are compelling for large scale cultivation. The current cultivation in Mass is approximately 800k square feet, while demand is expected to exceed 8,000,000 square feet. This opportunity fits into our stated objective of entering markets that are on the cusp of implementing a robust adult use market'.

About CannAssist: CannAssist has entered into a contract with the city of Leicester and has applied for a state cultivation grow license. It plans to build a facility that upon completion will have 86000 square feet of cultivation space making it one of the top 3 facilities in the state. The company expects to begin operations and realize its first harvest in Q1 of 2020.

About Oasis Cannabis: Oasis Cannabis has operated a cannabis dispensary in the Las Vegas market since dispensaries first opened in Nevada in 2015 and has been recognized as one of the top marijuana retailers in the state. Its location within walking distance to the Las Vegas Strip and Downtown Las Vegas in combination with its delivery service to residents allows it to efficiently serve both locals and tourists in the Las Vegas area. In February 2019, it was named "Best Dispensary for Pot Pros" by Desert Companion Magazine.

In August 2017, the company commenced wholesale offerings of cannabis in Nevada with the launch of its City Trees brand of cannabis concentrates and cannabis-infused products. http://oasiscannabis.com

About CLS Holdings USA, Inc:CLS Holdings USA, Inc. (CLSH) is a diversified cannabis company that acts as an integrated cannabis producer and retailer through its Oasis Cannabis subsidiaries in Nevada, and plans to expand to other states. CLS stands for "Cannabis Life Sciences," in recognition of the Company's patented proprietary method of extracting various cannabinoids from the marijuana plant and converting them into products with a higher level of quality and consistency. The Company's business model includes licensing operations, processing operations, processing facilities, sale of products, brand creation and consulting services."

New Age Beverages Corporation (NASDAQ: NBEV) is a Colorado and Utah-based healthy beverage company dedicated to inspiring, educating consumers to live healthily. New Age Beverages Corporation recently announced the signing of an agreement to develop and distribute Marley branded cannabis-infused beverages. The first product to rollout in the Marley+CBD portfolio will be Marley+CBD Mellow Mood, relaxation drinks in 15.5 oz cans with 25 mg of pharmaceutical grade CBD per serving. Initial market rollout to customers will be in Colorado, Oregon, Washington, and Michigan where cannabis is legal for responsible adult consumption. This rollout gives New Age a significant first-mover advantage in the CBD space with a globally-recognized brand platform, and positions the venture well for further expansion as regulations permit. Michael Cunningham, Senior Vice President of Sales for New Age commented, "It makes my job a lot easier when I have retailers and distributors reaching out to me asking for specific products. From the moment the CBD movement began, I've been receiving calls nonstop asking when we'd be going to market with a Marley+CBD product. Retailers and distributors realize that it will be a long road for smaller CBD brands to gain traction and brand equity. Under the Marley brand platform, we are able to leverage a massive global brand with ties to healthy cannabis use, to ultimately grow a beverage brand beyond anything we have seen to-date."

Arcadia Biosciences, Inc. (NASDAQ: RKDA) develops and markets high-value food ingredients and nutritional oils that help meet consumer demand for a healthier diet. Building on last week's launch of Arcadia Specialty Genomics™, a new cannabis-dedicated division of the agricultural food ingredient company, Arcadia Biosciences, Inc. recently announced that it has been granted an Industrial Hemp Pilot Program ("HIHPP") License by Hawaii's Department of Agriculture. The license allows for the cultivation of industrial hemp in Hawaii for the purposes of agricultural and academic research. Hemp and hemp products produced under the program may be commercially sold. With this license, Hawaii becomes the first state where Arcadia Specialty Genomics will commence its research and cultivation of hemp, planting on ten acres of recently-leased land next month. Hawaii was one of 23 states to launch a government-sanctioned hemp pilot program following the 2014 Farm Bill, which partially legalized hemp under state-based research programs. While the 2018 Farm Bill legalized the agricultural cultivation of hemp nationwide, its regulation now falls under the USDA, which has not yet set national policies for the crop. The new Farm Bill also allows states to set more restrictive regulations, including banning hemp growing. "Industrial hemp, along with all strains of cannabis, are decades behind other agricultural crops in terms of improved plant genetics. With the explosive market growth projected in the industrial hemp and derivative markets, growers will need the very best hemp strains to meet demand, minimize waste, and ensure consistent quality. As the only company working in the cannabis industry with proven track record of improving plants and commercializing food ingredients from agricultural products using non-GM techniques, we're ideally positioned to help hemp growers and end-users benefit from better hemp strains," said Matt Plavan, Chief Financial Officer of Arcadia Biosciences and President of Arcadia Specialty Genomics. "Being licensed by the State of Hawaii to participate in this highly selective program gives us an important head start and we're moving quickly to establish our Hawaii research program immediately as we pursue expansion through licenses in other states.

Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) is the leader in pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders. Zynerba Pharmaceuticals, Inc. recently announced that the U.S. Patent and Trademark Office has issued US Patent No. 10,213,390, titled "Treatment of Fragile X Syndrome with Cannabidiol" which includes claims directed to methods of treating Fragile X Syndrome by administering a therapeutically effective amount of synthetic or purified cannabidiol. This new patent, which expires in 2038, is part of an expanding intellectual property portfolio covering the Company's cannabidiol (CBD) product candidate, ZYN002 Transdermal CBD gel. The issuance of this patent comes as enrollment progresses in CONNECT-FX, a pivotal, multi-national, randomized, double blind, placebo-controlled study evaluating the efficacy and safety of ZYN002 in three through 17-year old FXS patients with full mutation of the FMR1 gene. The primary endpoint is the change from baseline to the end of the treatment period in the Aberrant Behavior Checklist-Community FXS Specific (ABC-CFXS) Social Avoidance subscale. Clinical investigative sites are enrolling patients in the United States, Australia, and New Zealand. Patients who have completed the double-blind phase are now enrolling into the 12-month open label phase. The Company expects to report top line data in the second half of 2019.

Origin House (OTCQX: ORHOF) (CSE: OH) is a growing cannabis products and brands company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. Origin House recently announced that it has entered into a Brand Accelerator Program agreement with Mendocino-based cannabis producer, Heritage Holding of California, Inc. d/b/a Henry's Original. Upon the completion of this deal, Henry's Original-branded products will be distributed exclusively in California by Origin House's wholly-owned distribution subsidiary, RVR Distribution, terminating Henry's distribution arrangements with other third-party distributors across the state. Henry's Original-branded products are currently carried in approximately 200 dispensaries across California. "Henry's Original was one of the first brands we partnered with under our innovative and growing Brand Accelerator Program. Our original partnership with Henry's bolstered their ability to meet consumer demand for its heirloom Mendocino-grown cannabis, while giving us the opportunity to financially support local Mendocino farmers," commented Afzal Hasan, President and General Counsel of Origin House. "With our expanded relationship, we are providing short-term growth capital to further develop Henry's cultivation capacity, and simultaneously introduce Henry's Original products statewide through RVR's distribution platform. This Agreement advances the Company's mission of becoming a preeminent global house of cannabis brand by expanding our growing portfolio of California brands, while accelerating the growth of entrepreneurs with authentic brands sought after by consumers," Mr. Hasan added.

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