The CBD Industry Flourishes After Overcoming Certain Legal Barriers

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Nov 13, 2019, 09:00 ET

NEW YORK, Nov. 13, 2019 /PRNewswire/ -- Humans have been using hemp for centuries prior to its disappearance from the public eye. Decades ago, hemp was predominantly being used to manufacture textiles, paper, construction materials, and fuel. However, now, hemp is most commonly known for being a derivative of the cannabis plant, which has caused it to be classified as a drug under international regulations. Furthermore, most people associate cannabis with its marijuana derivative, which imparts cerebral-altering effects on its users. However, hemp and marijuana are two completely different plants in terms of their biological makeup. Hemp contains much more CBD, or cannabidiol, while marijuana contains a significant amount of THC, or tetrahydrocannabinol. In fact, CBD and THC are just two of at least 113 cannabinoids identified in the cannabis plant. However, THC is one of the only three cannabinoids scheduled by the UN Convention on Psychotropic Substances. Originally, the UN listed THC as a Schedule 1 substance in 1971 but reclassified it to Schedule 2 in 1991 after a recommendation by the World Health Organization (WHO). However, under the Single Convention on Narcotic Drugs, THC is classified as both a Schedule 1 and Schedule 4 drug. And while the debate over legalizing THC is often a tense topic for most countries, CBD legalization appears to be a more popular direction of discourse. In recent times, CBD has become widely popular because of the therapeutic benefits it offers without causing psychoactive effects on the consumer. Notably, researchers highlighted that CBD can be used to treat minor conditions such as headaches or even severe symptoms associated with cancer. Nevertheless, international health agencies have all agreed that more research is required in order to move forward with approving CBD as a medicinal treatment. But regardless, a number of countries such as Canada and the U.S. already moved to completely legalize the use of CBD. And according to data compiled by Hemp Business Journal, a division of New Frontier Data, the total sales for the U.S. hemp industry totaled USD 820 Million in 2017. The research also suggests that the industry is expected to grow to USD 1.9 Billion by 2022 and at a CAGR of 14.4% during the 5-year period. Newleaf Brands Inc. (OTC: NLBIF) (CSE: NLB), KushCo Holdings, Inc. (OTC: KSHB), iAnthus Capital Holdings, Inc. (OTC: ITHUF) (CSE: IAN), MariMed Inc. (OTC: MRMD), Sorrento Therapeutics, Inc. (NASDAQ: SRNE)

In 2017, the U.S. hemp market was primarily driven by hemp-derived CBD products. At the time, hemp-derived CBD products accounted for 23% of the total market share, delivering USD 190 Million in sales. Personal care products accounted for 22% of the market share, narrowly lagging behind hemp-derived CBD products. However, by 2022, Hemp Business Journal expects the hemp-derived CBD market to takeoff. The hemp-derived CBD sector is forecast to deliver USD 646 Million in sales. Furthermore, the research suggests that the personal care products segment is expected to witness its market share diminishes as industrial applications fill the gap. And as legal barriers are removed and consumer education continues to spread, the hemp industry is positioned to witness exponential growth. Furthermore, many researchers are actively pushing legislators and lawmakers to reconsider the scheduling of cannabis because of rich therapeutic benefits. For instance, researchers from the University of Minnesota's (U of M) College of Biological Sciences and College of Food, Agricultural, and Natural Resource Sciences are one of a handful of groups that are federally authorized to study cannabis. The researchers have argued they have "indisputable evidence" that hemp and marijuana should be separated, according to Mercola. "It's a plant of major economic importance that is very poorly understood scientifically… With this study, we have indisputable evidence for a genetic basis of differences among cannabis varieties, further challenging the position that all cannabis should be regulated as a drug," said George Weiblen, a professor with a joint appointment in the U of M's College of Biological Sciences and College of Food, Agricultural and Natural Resource Sciences.

Newleaf Brands Inc. (OTC: NLBIF) (CSE: NLB) is also listed on the Canadian Securities Exchange under the ticker (CSE: NLB). Earlier last week, the Company and its wholly owned subsidiary We Are Kured, LLC announced, "the launch of three new flavor profiles for its disposable vape pens and 510 thread refill cartridges.

Matthew Mograbi, US National Sales Manager of Eybna Inc. commented, 'We have always enjoyed working with the Kured brand. Benjamin and his team run a great operation. We are excited to grow with them on this upcoming expansion.'

The new profiles consist of three crafted flavors, available in mango, tangerine and Charlotte's Web. Each flavor has its own colored packaging expressing the product's taste and feel. In addition to the new profile offerings, Kured will donate a portion of the proceeds from the sale of the Charlotte's Web profile to select charities that directly benefit veterans all over the United States.

'Our three oil flavor profiles have been a big hit in the CBD vape industry, I honestly couldn't have asked for a better terpene partner than Eybna. Eybna terpenes are by far the best in the world and I cannot wait to see the reaction to the new oil offerings. The mango profile is my new favorite,' said Benjamin Martch, CEO of Kured and CMO of NewLeaf Brands.

ABOUT NewLeaf Brands: NewLeaf Brands, Inc. is an innovative Cannabidiol ("CBD") lifestyle Company. Through the Company's wholly-owned subsidiaries We are Kured, LLC, Drink Fresh Water, LLC, ReLyfe Brand, LLC and TeaLief Brand, LLC the Company's main business activities encompass the development, marketing, and distribution of CBD products (including vaporizer pens/cartridges, hot/cold tea, softgel capsules and beverages) throughout North America, South America, and Europe. In addition, NewLeaf Brands, Inc. has extensive retail and cultivation land investments in Oregon, USA."

For our latest "Buzz on the Street" Show featuring Newleaf Brands Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=sI3A8RCK-S4

KushCo Holdings, Inc. (OTCQX: KSHB) is the premier producer of ancillary products and services to the cannabis and hemp industries. KushCo Holdings, Inc. recently announced the creation of its new Retail Services division. The new business unit will focus on providing comprehensive retail solutions, through strategic partnerships with best-in-class sales agencies, to leading CBD brands. KushCos retail services division will focus on industry education and compliance, as well as building distribution networks of CBD brands across conventional retail channels. With Retail Services experienced leadership optimizing growth opportunities, this division will expand the Company's platform and fuse two industries that have historically operated independent of each other. In his position as Vice President of Retail Services, Ryan Savage will oversee sales agency partnerships, including C.A. Fortune, a leading full-service national consumer products sales and marketing agency focused on lifestyle brand partnerships. In addition, he will manage the expansion of CBD into the retail space across all channels, driving sales through management of brands, brokers and customers to increase distribution and revenue growth. Ryan Savage has spent the past 15 years gaining knowledge of multiple aspects of the consumer packaged goods (CPG) industry. He has worked with many diverse, major retailers including Sprouts, Trader Joes, Target, Amazon, and Kroger, in both a branded and private label capacity.

iAnthus Capital Holdings, Inc. (OTCQX: ITHUF) (CSE: IAN) owns and operates best-in-class licensed cannabis cultivation, processing and dispensary facilities throughout the United States, providing investors diversified exposure to the U.S. regulated cannabis industry. CBD For Life a subsidiary of iAnthus Capital Holdings, Inc., recently announced that it is continuing to expand its retail presence with a partnership with Dillard's, Inc. "We're excited for our products to be featured on the shelves of one of the largest and most well-regarded fashion retailers in the United States," said Beth Stavola, Co-Founder of CBD For Life and Chief Strategy Officer of iAnthus. "The ability to reach an even broader audience via the well-established customer base of a great partner like Dillard's brings us another step closer to achieving our end goal of establishing CBD For Life as a household name in beauty and wellness."

MariMed Inc. (OTCQX: MRMD), a multi-state cannabis operator, is dedicated to improving the health and wellness of people through the use of cannabinoids and cannabis products. MariMed Inc. recently announced that on November 7, 2019, the Massachusetts Cannabis Control Commission (CCC) approved ARL Healthcare to commence operations at its Cultivation and Production facility in New Bedford and its Dispensary in Middleborough. These facilities have been fully completed and preliminarily approved to open. State-approved staff has been hired. Operations in New Bedford will commence immediately and at its Middleborough Dispensary under its new retail brand "Panacea™ Wellness" in the next few weeks. ARL Healthcare Inc., a wholly-owned MariMed entity, holds these licenses and two additional dispensary licenses in Massachusetts that it plans to open in the next year. "We are delighted to have been approved to open our cannabis operations in Massachusetts," noted Tim Shaw MariMed Chief Operating Officer, who has led the Massachusetts licensing process. "We will now introduce our proprietary genetics and strains under our flower brand Nature's Heritage™ into the emerging Massachusetts marketplace, as well as our own infused product brands Betty's Eddies™ and Kalm Fusion™, and our licensed brands, The Healer, Binske, Tikun Olam, and Tropizen."

Sorrento Therapeutics, Inc. (NASDAQ: SRNE) is a clinical-stage, antibody-centric, biopharmaceutical company developing new therapies to turn malignant cancers into manageable and possibly curable diseases. Sorrento Therapeutics, Inc. recently announced that it had established a new business unit to focus on the market potential for its innovative water-soluble cannabidiol (CBD) formulation technology. Cannabidiol (CBD) has been under consideration within the pharmaceutical side of Sorrento for its interesting pharmacological properties and potential clinical benefits in multiple central nervous system, autoimmune or inflammatory diseases and pain-related indications. "Without distracting from our pharmaceutical business, we have the ability to leverage another Sorrento innovative technology – this time from our formulation experts – and make it available to the broader consumer market" stated Dr. Henry Ji, Chief Executive Officer and Chairman of Sorrento Therapeutics. "Longer-term, we may consider spinning off our CBD consumer business into an independently operated company if appropriate, while our research and clinical development team continues to explore the potential pharmaceutical applications of cannabidiol (CBD) for the medical markets."

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