Why 2019 Could be a Reality Check for Cannabis Companies in North America

PALM BEACH, Florida, April 11, 2019 /PRNewswire/ -- This year 2019 will be the year of maturation and expansion for the cannabis industry. Expectations are high and optimism abounds on all fronts. A recent article in Forbes echoed this optimism: "This new year bodes well for the cannabis industry. There's excitement as we welcome new states into the cannabis fold and fervent hope that we'll see movement toward making cannabis fully legal at the federal level. Momentum from several major developments in 2018, including the inclusion of industrial hemp in the new farm bill and Canada's nationwide legalization, will certainly continue to fuel innovation, policy and entrepreneurship… there's a lot of enthusiasm and a general expectation that the U.S. is moving toward an end of prohibition at the federal level.  It continued: "This is the year when we're going to start to see a bifurcation between companies that are solid and those that aren't. Up until now, cannabis has been a "rising tide lifts all the boats" kind of industry. But that won't be true anymore. We'll see people who are successfully executing their business plans get a major lift this year as consumer spending is expected to jump 40%. But we'll also start to see inept companies fail. A lot of people blindly got into cannabis because it was hot or the next big thing and they're going to pay a penalty for not knowing the industry. 2019 is going to be a reality check, which is a good thing for those companies that have solid, professional business plans in place, because we can expect retail investors to start to take a back seat to big money. Active companies in the industry making moves to ready that include: IONIC Brands Corp., (CSE: IONC), SLANG Worldwide Inc. (CSE: SLNG) (OTC: SLGWF), Plus Products Inc. (CSE: PLUS) (OTC: PLPRF), Origin House (CSE: OH.CN) (OTC: ORHOF), Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV).

The article concluded: "Stocks were volatile for a few months at the end of 2018 because investors weren't sure how the landscape would change after Canada's switch to legal cannabis. But as institutional investors start coming in, they'll take a hard look at everyone's numbers and reward companies that are solidly performing and have the traditional hallmarks of a successful startup. That means capital is going to start migrating to the better players, which is going to further separate them from the pack. While there will be some fallout, in general, it's a good thing for the market. An industry built on hype and expectation can't survive. This is the year we're going to see that performance and numbers matter."

IONIC Brands Corp., (CSE: IONC) BREAKING NEWS:  IONIC Brands is pleased to announce that the Company's product licensing partner has signed an exclusive distribution agreement with Continuum ("Continuum") a California Division of  Origin House ("Origin House") to distribute Ionic branded products.   Ionic branded products are now part of the Origin House distribution platform in California.  Origin House has the largest US footprint of branded and distribution assets in North America.

One of the Continuum strengths is its portfolio of over 30 cannabis brands, which it delivers to more than 500 dispensaries in California. Distribution is a critical part of the cannabis supply chain in California, where the legal cannabis market is expected to hit US$7.7 billion by 2020, according to Arcview Market Research/BDS Analytics. The agreement also provides further potential access to 10 additional US states including Michigan, Massachusetts, Ohio, Pennsylvania, Illinois, Arizona, and Florida. 

Effective immediately Continuum is the exclusive distributor of all Ionic Brands products in California. Origin House' Director of Key Supplier Relations, Jessica Lilga commented,"the California cannabis distribution market is very competitive. Continuum has the advantage to distribute the finest products from the best companies and we are excited to offer Ionic products to our customers. The IONIC team meets our high standards of professionalism and experience, and we are very excited to help build this brand in California and potentially other states as our two companies expand our national footprint." 

IONIC BRANDS Chairman and CEO John Gorst commented that "IONIC BRANDS sought out the top distributor in California and given Origin House' footprint, Ionic anticipates increased brand awareness, heighten demand for its products, and aggressive sales growth.  Our exclusive distribution agreement with Origin House distributor Continuum aligns with our strategy to build a multi-state consumer-focused cannabis concentrate national brand portfolio focusing on the premium and luxury segments.  We look forward to growing with Continuum as we build the market for our portfolio of premium cannabis branded products."    Read this entire announcement  for IONC at:   https://www.financialnewsmedia.com/news-ionc/ 

Additional industry related developments from around the markets:

SLANG Worldwide Inc. (CNSX: SLNG) (SLGWF) -  At the request of the Investment Industry Regulatory Organization of Canada, Slang Worldwide Inc. has confirmed that the company's management is unaware of any material change in the company's operations that would account for the recent increase in market activity.

The company is presently pursuing a number of acquisition transactions, which transactions are at various stages of development. Any such transaction will be fully disclosed if and at such time as it becomes material information regarding the company.

Canopy Rivers Inc. (OTCPK: CNPOF) (TSX-V: RIV) -  James E. Wagner Cultivation Corp., a portfolio company of Canopy Rivers Inc., has received a cultivation license from Health Canada for its Kitchener-based commercial-scale production facility (JWC2). This second license launches the initial phase of JWC2, a 345,000-square-foot production and distribution complex, where James E. Wagner Cultivation is rolling out more than 130 individual production rooms utilizing its proprietary GrowthStorm dual-droplet cultivation platform and methodologies. With the newly licensed facility located just minutes from James E. Wagner Cultivation's already licensed pilot facility, James E. Wagner Cultivation is well positioned for an efficient ramp-up and expects to commence cannabis production at JWC2 immediately.

"While optimizing production methodologies at their already licensed pilot facility, JWC has concurrently built out and implemented refinements and learnings for production at commercial scale," commented Daniel Pearlstein, executive vice-president of strategy at Canopy Rivers. "We are pleased to see Health Canada reward JWC for the quality of their operations and their disciplined approach to expansion with the issuance of this second site licence."

Plus Products Inc. (CSE: PLUS.CN) (OTCQB: PLPRF) has launched its newest product: mango CBD (cannabidiol) relief, which will contain 4.5 milligrams of cannabidiol and 0.5 mg of tetrahydrocannabinol in each gummy. The new product is already available at some of the more than 250 retailers in California who carry the Plus product line.

The company will retire its previous CBD relief product, "pineapple coconut CBD relief," as part of a co-ordinated launch campaign with retailers. According to BDS Analytics, pineapple coconut CBD relief was the top selling CBD edible in the California market in Q4 2018 as measured by units and dollars sold.

Origin House (CSE: OH.CN) (OTCQX: ORHOF) - CannaRoyalty Corp d/b/a Origin House  a North American cannabis products and brands company recently provided an update on Sonoma County permit approvals received by the Company's pending acquiree, California -based cannabis cultivator Cub City LLC ("Cub City") and wholly-owned subsidiary, FloraCal Farms ("FloraCal").

Cub City received a Minor Use Permit ("MUP") from the County of Sonoma for cultivation, processing, non-volatile manufacturing, and distribution at its Santa Rosa facility. The MUP was approved by a unanimous vote of the Sonoma County Board of Zoning Adjustments (the "Board"), following a public hearing on March 28, 2019. The appeal period for the Board's decision ended on April 8, 2019 without any appeal being filed. 

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