The Cannabis Market Continues to Thrive as Regulations Thaw

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Jul 02, 2019, 09:00 ET

NEW YORK, July 2, 2019 /PRNewswire/ -- Recently, Illinois became the 11th U.S. state to legalize the adult-use of cannabis after Governor J.B. Pritzker signed a recreational marijuana legalization bill in late June. The legislation is expected to take effect beginning on January 1st, 2020. Illinois has already had its medical cannabis program operational since 2013 and as of June 2019, had over 73,000 qualifying patients in medical cannabis programs. However, with the passage of the recreational legislation, industry analysts believe that the recreational segment will eclipse the medical segment. Marijuana Business Daily projects that Illinois' recreational market could generate upwards of USD 2.5 Billion annually, depending on the large role tourists play. The law will allow consumers 21 years and older to purchase up to 30 grams of cannabis flower or five grams of concentrates. Moreover, Illinois' residents will be allowed to cultivate up to five plants within their households. Overall, Illinois' legalization marks yet another major milestone within the cannabis industry. However, the federal legality of cannabis is still a conflict of interest swirling around the country's politicians. Nearly seven-in-ten Democrats support the legalization of marijuana, as do 75% of the independents who lean towards the Democratic party, according to Pew Research Center. On the other hand, the Republicans are divided, with 45% in favor and 51% opposed to legalization. While the Republican public are still leaning toward the opposition, the number of those supporting legalization has drastically increased from 39% in 2015. Despite the federal split on the broad cannabis industry, the CBD marketplace is gaining traction within the U.S. Through the recent passage of the U.S. Farm Bill, hemp-derived CBD was legalized in virtually every state as long as it contains less than 0.3% THC levels. Now, while the cannabis industry continues to gain support, the CBD market has already taken off. And as a result, the U.S. hemp-derived CBD industry is expected to reach USD 22 Billion by 2022, according to data compiled by Brightfield Group. Pressure BioSciences, Inc. (OTC: PBIO), Harvest Health & Recreation Inc. (OTC: HRVSF) (CSE: HARV), New Age Beverages Corporation (NASDAQ: NBEV), cbdMD, Inc. (NYSE-A: YCBD), Valens GroWorks Corp. (OTC: VGWCF) (CSE: VGW)

Throughout the U.S., consumers can easily find CBD-based products such as tinctures, creams, and patches in regular retail locations. Moreover, dispensaries in legal states also carry CBD oils and pure CBD flower strains. While CBD can be used for recreational purposes to relax, many consumers ingest CBD for its therapeutic applications. Extensive research and studies have linked even CBD to the successful treatment of a variety of medical conditions from mild ones such as anxiety or insomnia to more severe conditions like Alzheimer's and Parkinson's. However, cannabis is only federally approved to treat two cases of childhood epilepsy: Lennox-Gastaut Syndrome and Dravet syndrome. Nonetheless, states that have approved medical use allow doctors to prescribe patients with medicinal cannabis for a variety of reasons and according to Cowen & Co's January consumer survey, approximately 7% of Americans were using CBD. The investment bank said that the suggested number was much higher than it anticipated and based on the statistics, Cowen now projects the U.S. CBD consumer base to grow to 10% or 25 million users by 2025. "It's everything people believe to be good about marijuana. Without the downside of getting stoned," said Bethany Gomez, Managing Director at Brightfield Group. "I've been doing market research for years and covered everything. This is definitely the craziest market I've ever covered."

Pressure BioSciences, Inc. (OTCQB: PBIO) announced earlier last week the launch, "of its BaroShear K45 system based on the Company's proprietary Ultra Shear Technology (UST) platform. The BaroShear K45 system is a unique and powerful next generation nanoemulsification system designed to fix one of the most critical problems facing CBD manufacturers today: the extremely poor water solubility of CBD oil.

CBD, a non-psychoactive compound believed to offer powerful health benefits, is extracted from the cannabis plant in an oil. After ingestion, because oils are not well absorbed, most of the CBD is flushed from the body, leaving little of the product to provide its beneficial properties. Because of these solubility issues, many CBD products on the market today contain an inefficient over-abundance of CBD and/or undesirable chemicals to try and improve its solubility in water.

For most oil-based products, the ability to prepare them as nanoemulsions can improve the product's absorption, medicinal benefits, visual appearance, and sensory presentation. Unfortunately, traditional processing methods struggle with this challenge. PBI's patented UST platform uses ultra-high pressure to create extreme shearing forces to make highly stable, homogenized nanoemulsions of materials that normally do not mix, such as CBD Oil and water. To view PBI's UST-processed CBD oil being added to a soft drink, a sports drink, and a beer, please use the following link: PBI UST CBD Video 040219 (https://www.youtube.com/watch?v=gAqFQmsGHcA&feature=youtu.be).

Dr. Nathan Lawrence, Senior Advisor to PBI, said: "The unique concept of the BaroShear K45 system is based on PBI's proprietary UST platform. It was designed for the efficient and affordable manufacture of limited quantity oil-based material into high quality, water-soluble nanoemulsions. The BaroShear K45 system uses a custom-designed, highly responsive ultra-high pressure generating subsystem, matched to our patented BaroIsolator device and NanoGap valve. This allows for the highest effectiveness possible at working pressures up to 45,000 psi. The BaroShear K45 system is ideally suited for processing small amounts (e.g., 50 mL - 2 L) of high value product, such as CBD oil, into nanoemulsions with high yield."

Dr. Bradford A. Young, Chief Commercial Officer of PBI, commented: "Over the past several months, we have spoken with dozens of CBD companies. A common theme has been their desire to develop new and improved delivery methods for CBD and their concern with how best to make stable nanoemulsion mixtures of CBD oil and water. Our new UST platform, the BaroShear K45 system, can help companies make high quality, CBD-based products using physics (e.g. ultra-high pressure) instead of chemistry (e.g. lots of strong detergents). We look forward to helping our customers address the large and growing market for CBD infused foods, beverages, cosmetics and topicals."

The total cannabinoid market is expected to hit$89 billion by 2024 (https://mordorintelligence.com/industry-reports/cannabis-market), with CBD oil-based products being the cornerstone of the non-psychoactive portion of this exploding market. For CBD products commonly consumed orally - including CBD oils in edibles and beverages - absorption is typically below 10% (ERTH 8/28/2018: Water Soluble CBD - The Science of Nanoemulsions and Bioavailability). PBI believes that processing with the UST-based BaroShear K45 system will deliver greatly improved absorption results (potentially as high as 90%) for CBD and other oil-based supplements.

Dr. Keith Warriner, Professor of Food Science at the University of Guelph (Toronto), and a recognized expert in the cannabis industry, commented: 'The data I have reviewed to date on UST-generated nanoemulsions of CBD oil are very impressive. Creating nanoemulsions of CBD oil with full preservation of CBD throughout the process, while not generating impurities, remains a significant challenge in the industry. These data indicate that UST can achieve that goal, thereby offering great promise to the future.'

Richard T. Schumacher, President and CEO of PBI, said: 'The BaroShear K45 system will list for $195,000; we believe that sales of these Systems will become a major revenue-generating part of our business. We will be accepting purchase deposits on pre-sale orders immediately. Based on feedback from potential customers, we believe purchase deposits on instruments from the initial build could start being received by mid-July. We plan to stop accepting purchase deposits on September 30th; however, we will stop earlier if demand exceeds reasonable manufacturing limits.'

Mr. Schumacher continued: 'We are looking forward to working with the early adopters of this exciting technology platform. Early adopters will be the first to use the UST platform in the CBD field, thus giving them a significant head-start over companies who choose to wait or useother methods. They will always be the first to get full access to new instruments, technologies, and applications that can positively impact the UST platform (a commitment to early adopters). They will also have "most favored nation" pricing for subsequent UST platform systems. Finally, because there is much to learn about CBD formulations and their benefits for various factors, we will be offering collaboration opportunities to the first three groups who submit purchase deposits. This is a very exciting time for the entire PBI Team, and for all stakeholders in PBIO.'

About Pressure BioSciences, Inc: Pressure BioSciences, Inc. (OTCQB: PBIO) is a leader in the development and sale of innovative, broadly enabling, pressure-based solutions for the worldwide life sciences industry. Our products are based on the unique properties of both constant (i.e., static) and alternating (i.e., pressure cycling technology, or PCT) hydrostatic pressure. PCT is a patented enabling technology platform that uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels to safely and reproducibly control bio-molecular interactions (e.g., cell lysis, biomolecule extraction). Our primary focus is in the development of PCT-based products for biomarker and target discovery, drug design and development, biotherapeutics characterization and quality control, soil & plant biology, forensics, and counter-bioterror applications. Additionally, major new market opportunities have emerged in the use of our pressure-based technologies in the following areas: (1) the use of our recently acquired, patented technology from BaroFold, Inc. (the "BaroFold" technology) to allow entry into the bio-pharma contract services sector, and (2) the use of our recently-patented, scalable, high-efficiency, pressure-based Ultra Shear Technology ("UST") platform to (i) create stable nanoemulsions of otherwise immiscible fluids (e.g., CBD Oil and water) and to (ii) prepare higher quality, homogenized, extended shelf-life or room temperature stable low-acid liquid foods that cannot be effectively preserved using existing technologies."

For our latest "Buzz on the Street" Show featuring Pressure BioSciences, Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=IHP93mf4ClM

Harvest Health & Recreation Inc. (OTCQX: HRVSF) (CSE: HARV), headquartered in Tempe, Arizona, is a multi-state cannabis operator (MSO) and vertically-integrated cannabis company. Harvest Health & Recreation, Inc. recently announced the signing of an agreement to bring their popular Colors, CBx Essentials and Harvest-branded CBD product lines to more than 10,000 retail stores, including convenience stores and gas stations across the country. The multi-million-dollar partnership, which will roll out to the Asian American Trade Associations Council retailer network brings leading CBD products with significant demand to a system of everyday strategic markets in small towns and major metropolitan regions. "This exclusive partnership enables a massive advance in distribution for Harvest-owned CBD brands and follows our strategic path of expanding the scale of our wholesale and retail distribution nationally," said Harvest Chairman Jason Vedadi. "Demand for CBD is unprecedented and by delivering leading products in 10,000 accessible locations gives us an unparalleled reach to consumers."

New Age Beverages Corporation (NASDAQ: NBEV) is a Colorado and Utah-based healthy beverage company dedicated to inspiring and educating consumers to "live healthy." New Age Beverages Corporation recently announced the global launch of its CBD product portfolio, with the unveiling of its line and shipment of their CBD creams, lotions, and oils to be sold worldwide under its Health Sciences Division. New Age's CBD product line features full-spectrum CBD, which means the CBD has been distilled and stripped of lipids and fillers, but still maintains a full spectrum of CBD and other cannabinoids. This diversity in phytonutrients can facilitate the "entourage effect," which is a term used to describe synergy amongst cannabinoids. The hemp source, delicate CBD extraction, processing techniques, and the nature of the CBD itself all set the New Age CBD portfolio apart from competition. 'NHANCED CBD and the Health Sciences CBD products are sourced from hemp grown outdoors in farms located in the Pacific Northwest region of the United States. The initial launch will feature three distinct products, CBD Body Cream at 150mg strength, CBD Roll-on Gel at 200mg strength, and CBD Oil at 500mg strength. All products will only be commercialized in locations within the United States or countries that legally allow the sale and use of CBD and CBD-infused products. Jerry Haase, M.D., Chief Medical and Scientific Officer for the New Age Health Sciences Division commented, "The Health Sciences Division has worked exhaustively bringing all of our science, patented formulas, insights and more than 10 years of study to deliver superior clinical products to consumers. Our launch of CBD leverages all of that differentiated expertise, and specific study of cannabinoids over the past number of years for the benefit of these new products." Shon Whitney, Senior Vice President of Sales and Marketing at Morinda added, "The 'NHANCED CBD brand's promise is simple, we will bring you the most researched, most efficacious, and highest quality CBD products possible, that you can trust. We will never compromise quality in sourcing, processing, safety or ingredients to deliver a superior outcome in the finest CBD products available worldwide."

cbdMD, Inc. (NYSE-A: YCBD) is a nationally recognized consumer cannabidiol (CBD) brand whose current products include CBD tinctures, CBD gummies, CBD topicals, CBD bath bombs, CBD vape oils, and CBD pet products. Bellator MMA recently announced a multi-year, category exclusive partnership with cbdMD, Inc., a nationally recognized consumer cannabidiol (CBD) brand. As part of the partnership – which began at Bellator 222 in New York City – cbdMD will receive a depth of integrated partnership assets, including category exclusive branding inside the Bellator cage, to promote cbdMD. "We're excited to have our company represented in the cage alongside some of the fiercest competitors on the planet," said Caryn Dunayer, President of cbdMD. "Our partnership with Bellator and Viacom/Paramount will facilitate a unique opportunity to educate athletes and fans about the many benefits of CBD. We believe we've started a lasting relationship that will help push both industries into the future."

Valens GroWorks Corp. (OTCQB: VGWCF) (CSE: VGW) is a research-driven, vertically integrated Canadian cannabis company focused on downstream secondary extraction methodology, distillation and cannabinoid isolation and purification, as well as associated quality testing with three wholly-owned subsidiaries located in and around Kelowna, BC. Valens GroWorks Corp. recently announced that it had entered into a multi-year extraction services agreement to provide cannabis and hemp extraction services to The Green Organic Dutchman Holdings Ltd., a 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. Under the terms of the initial 2-year agreement, TGOD will supply Valens with an annual minimum of 30,000kg in the first year, increasing to 50,000kg in year two, of cannabis and hemp biomass which Valens will process into premium quality resins and distillates using certified organic extraction processing methods. TGOD intends to use the concentrated cannabinoid resins and distillates to produce oils, sprays and capsules as well as oils for vaporization and future edible, beverage and topical products. Valens expects the first shipment to arrive and begin processing early Q2. "We are excited to work with TGOD, Canada's premier certified organic producer," said Tyler Robson, Chief Executive Officer of Valens GroWorks. "Organic resonates with consumers, and Valens looks forward to helping accelerate TGOD's time to market with the launch of its hemp-derived CBD product line in the coming months."

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