Tourists Flock to CBD and Cannabis-friendly Regions
FinancialBuzz.com News Commentary
NEW YORK, May 6, 2019 /PRNewswire/ -- Tourism is a major economic growth driver for many countries that offer bustling city life and scenic landscapes. While many tourists often travel to explore a region's traditional customs, an unsuspecting industry has now emerged in several countries: cannabis. For instance, countries such as Canada, the Netherlands, and Spain have all become popular getaway spots for cannabis consumers worldwide. The three nations, in particular, maintain lenient cannabis regulations, meaning tourists can freely purchase cannabis-based products. The U.S. is also becoming a major tourist destination for cannabis users because of states like California and Colorado, as the two states deliver over billions of dollars of collective cannabis revenue. In particular, Colorado has witnessed substantial growth in its cannabis tourism marketplace because it was one of the first states to legalize recreational use, along with Washington. In 2016, the state of Colorado saw 82.4 million travelers and according to a survey by Colorado Tourism, 12 million or 15% of those travelers participated in marijuana-related activities. Among the reported group, 5% of those travelers said they specifically visited Colorado for cannabis-related purposes. The staggering number highlights the impact that tourism has on cannabis tax revenues for both states and countries. Furthermore, as legalization continues to expand globally, countries can expect travelers to be on the lookout for cannabis products. According to data compiled by Arcview Market Research and BDS Analytics, the worldwide consumer spending on legal cannabis is expected to reach USD 12.2 Billion in 2018. By 2022, the research suggests that legal spending will increase to USD 31.3 Billion as it accelerates at a CAGR of 26.7% during the forecast period. AREV Brands International Ltd. (OTC: AREVF) (CSE: AREV), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD), Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT), Auxly Cannabis Group Inc. (OTC: CBWTF) (TSX-V: XLY), Vivo Cannabis Inc. (OTC: VVCIF) (TSX-V: VIVO)
Cannabis-based products come in different variations, offering consumers widely diverse effects and choices like the option to purchase highly potent THC-based products such as concentrates and extracts. On the other hand, consumers can also purchase cannabis-based products that don't offer psychoactive effects such as hemp-derived CBD products. Primarily, flower sales account for the majority of overall sales, however, these sales have recently begun to decline. When adult-use sales began in Colorado back in 2014, flower sales controlled 64% of the market share, according to BDS Analytics. In 2018, Colorado's flower sales market share sunk to 44%. During the same period, Colorado witnessed its concentrate market share increase from 15% to 31%. Moreover, Oregon also witnessed its flower sales decline from 54% in the first quarter of 2017 to 44% a year later. In the same period, concentrate sales rose to 27% from 21% the year prior. While Oregon's concentrate sales growth is lagging behind Colorado's, the shift in both markets suggests that consumer tastes in products are changing. "Legalization brings a lot of opportunities, including many that are unexpected. One of the biggest areas for expansion is cannabis oil," according to Scott McGovern, Founder of Blocklr & Growth Nuts. "Despite the rising popularity of cannabis oil, it's still a relatively undeveloped market because of how it's produced. Technically, cannabis oil is what you get when you extract a concentrated oil from the marijuana or hemp plant. THC and CBD oil are technically in the same category because they're produced with the same type of equipment."
AREV Brands International Ltd. (OTC: AREVF) (CSE: AREV) is currently listed on the Canadian Securities Exchange under the ticker (CSE: AREV). Earlier last week, the Company announced that, "it has entered into a Binding LOI with LB Anaheim Street LLC, a company organized under the laws of California, USA ("Anaheim") and LBC Integrated Growers LLC, a company organized under the laws of California, (collectively, the "Companies").
LB Anaheim Street LLC owns a 5,300 square foot facility minutes from the Long Beach Port and holds the highly-coveted Type 7N and shared-use commercial cannabis volatile manufacturing license used for volatile and non-volatile solvent extraction, infusion processing (including edibles, topicals and beverages), packaging and labeling, and a Type S shared use kitchen for producing edibles.
LBC Integrated Growers LLC is a 100 acre cannabis and hemp cultivation AG II zoned property in Santa Barbara County, California. The Type 7N License has a THC canopy size limited to 30,000 square feet per 100 acre parcel. CBD canopy sizes are currently unlimited.
Using BC Bud Depot's advanced genetics, AREV will plant a short-season crop of auto-flowering, high-THC feminized seeds in March of each year. This will yield a flowering crop in a period of eight weeks. A second high-THC crop of elite proprietary genetics will then be planted in May for harvest in September. High-yielding CBD will be harvested from a single annual planting of feminized hemp seeds. The biomass yield will be supplied to the Long Beach location and the entire multi-crop yield is to be pre-purchased by LB Anaheim Street LLC.
Mike Withrow, CEO, stated, 'This agreement is a direct result of the tireless work Silvertree has done on behalf of AREV. It is a perfect fit and meets our mandate to enter into partnerships with license-holders who will continue to operate and join the network of licenses in the State of California.'
Under the terms of the agreement, As soon as practicable following the parties' satisfaction or waiver of the Conditions to Closing (the "Closing"). The parties will work together in good faith to negotiate and finalize the Acquisition Agreement on or before June 1, 2019. The obligations of the Selling Party and the Buyer under the Transaction documents are conditioned solely upon satisfaction or waiver of the following conditions (collectively, the "Conditions to Closing"): (i) on or prior to the date of Closing the Buyer shall obtain all necessary governmental, regulatory and court consents, permits, licenses, waivers and approvals to operate the businesses; (ii) compliance with pre- closing covenants and continuing accuracy of each Party's representations and warranties in all material respects; (iii) obtaining all consents and approvals of third parties and the Canadian Securities Exchange (the "CSE"); and (iv) on or prior to the date of Closing the Buyer shall provide written confirmation of the completion of a satisfactory due diligence investigation, including, but not limited to, confirmation that the Selling Party owns all right, title and interest in and to the operating assets of the Companies. The purchase price will be based on a fair market report valuation report prepared by RwE Growth Partners to be determined at a later date but before the finalization of the Acquisition Agreement. Such valuation report shall be paid for by the Buyer.
About AREV Brands International Ltd: AREV Brands International Ltd. ("AREV") produces and delivers functional compounds and ingredients from its world-class extraction systems. AREV is revolutionizing the current delivery method of terpenes, cannabinoids and flavonoids. These premium ingredients and formulations are used in products targeted for sale in the natural health, medical, functional food, nutraceutical, sport nutrition and bioceutical markets. AREV innovates through extraction to produce extracts from specific selected plant and exude from trees that address 5 areas of health including Anxiety, Pain Management, Insomnia, Central Nervous System Disorders & Libido."
For our latest "Buzz on the Street" Show featuring AREV Brands International Ltd. recent corporate news, please head over to: https://www.youtube.com/watch?v=Dr1lrNlLfYs
The Green Organic Dutchman Holdings Ltd. (OTCQX: TGODF) (TSX: TGOD) is a publicly traded, 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. The Green Organic Dutchman Holdings Ltd. recently announced that its Kelowna-based extraction processing services provider, Valens GroWorks Corp., had obtained its organic certification from Pro-Cert Organic Systems Ltd. TGOD collaborated with Valens to facilitate the organic certification of their organic processing methodologies. As announced on March 11th, as part of its agreement with Valens, TGOD will have exclusive access to their services for certified organic extraction processing for a period of one year. "TGOD has been committed to organic since day one. Working with service providers who embrace organic as much as we do is paramount. I want to congratulate the team at Valens for obtaining their organic certification," commented Brian Athaide, Chief Executive Officer of TGOD. "We look forward to delivering certified organic oils of the highest standards to our patients and customers."
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) specializes in the extraction, purification and formulation of health and wellness products. Neptune Wellness Solutions Inc. recently announced that its Solutions Business had begun offering turnkey product development solutions with hemp-derived ingredients to business customers in the United States. A U.S.-based supply chain of licenced hemp extract producers has been established, and initial purchase orders are now being processed. Neptune boasts long-standing experience in the management of custom and white label turnkey product development solutions comprising a diverse array of product forms including softgels, liquids, topicals, emulsions, and water-dispersible powders. Branded ingredients and products that have contributed to Neptune's success, such as MaxSimil® and ECSentialsTM formulations, could potentially be used in unique combinations with hemp ingredients, particularly as the U.S. regulatory framework around hemp extracts and cannabidiol (CBD) evolves. "The U.S. market for hemp is developing rapidly and represents a significant opportunity for the consumer products industry. Neptune is now offering products and services to American brands that want to create a unique hemp-based portfolio, with products made exclusively in the U.S. for the U.S." said Jim Hamilton, President and Chief Executive Office of Neptune.
Auxly Cannabis Group Inc. (OTCQX: CBWTF) (TSX-V: XLY) is a vertically integrated cannabis company with diverse operations across Canada and Uruguay. Auxly Cannabis Group Inc. recently announced that the Company has signed a definitive agreement with 2368523 Ontario Limited (d/b/a) Curative Cannabis. The Company will acquire 46% of the common shares of Curative and enter into a long-term cannabis purchase and sale agreement to fund the construction and development costs of Curative's cannabis cultivation facility in Chatham-Kent, Ontario. The Facility is designed as a purpose-built indoor facility for the production of ultra-premium cannabis product. With an initial footprint spanning approximately 30,000 sq. ft., the first phase of the Facility is expected to yield approximately 2,900 kg of cannabis per annum. Curative anticipates bringing a unique ultra-premium cannabis product to Canadian recreational cannabis consumers through its proprietary genetics database of over 90 stable, and highly sought-after, cannabis strains. Hugo Alves, President and Director of Auxly Cannabis Group commented: "Curative is a highly valued partner to Auxly, having been a part of the Auxly family since the inception of the Company. That being said, we could not be more pleased to have reached this stage of the project and to be signing a definitive agreement with Curative. Curative's optimization of indoor cultivation combined with their unique genetics will provide a highly desirable product offering to the Canadian recreational cannabis markets and to the Auxly platform as a whole. We are pleased to be working with Dave, Scott and their team as they build out additional phases of this project and bring their product to market."
Vivo Cannabis Inc. (OTCQX: VVCIF) (TSX-V: VIVO), based in Napanee, Ontario, is recognized for trusted, high-quality products and services. It holds production and sales licences from Health Canada and operates world-class indoor cultivation facilities with proprietary plant-growing technology. VIVO Cannabis Inc. recently announced that the Company's wholly-owned subsidiary, Canna Farms Ltd. ("Canna Farms"), has received approval from Health Canada to begin cultivation in the expansion of its Yale Road facility in Hope, BC, resulting in a doubling of the Company's cultivation capacity in the province. The expansion includes production and product development space, along with automated packaging equipment expected to be incorporated into the facility and brought on-line mid 2019. Cultivation in the expanded area is expected to commence in May 2019. "Today's approval of the Hope, British Columbia expansion is in addition to the Napanee, Ontario capacity increase approved by Health Canada yesterday," said Barry Fishman, Chief Executive Officer at VIVO. "With the additional cultivation from Hope, VIVO's current annual production capacity is now more than 8,000 kilograms with a goal to reach 11,000 kilograms later in 2019."
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