NEW YORK, Sept. 22, 2020 /PRNewswire/ -- Legalization of cannabis products on a federal level remains the goal for the cannabis industry. Currently, there are various forms of cannabis prohibition enforced in 39 states. As a result of regulatory inconsistencies and obstacles resulting from this partial prohibition, the illicit market in the United States still covers about USD 60 Billion in annual sales, according to data by New Frontier Data. Cannabis derived for medical products, however, will remain at the top of the demand charts. In recent years, CBD and hemp-derived products have seen a massive surge in popularity, as most consumers use CBD products for medicinal purposes. Similarly, retailers have begun advertising CBD products as therapeutic treatments; nevertheless, there is still a large recreational market for the industry. Primarily, most consumers intake CBD to treat a wide range of medical conditions such as chronic pain, mood disorders, neurological disorders, and diabetes. In the healthcare industry, most independent pharmacies have already begun selling CBD products. Overall, the CBD oil market size is expected to grow by USD 3.52 Billion during the period of 2020 to 2024, according to Technavio. MediPharm Labs Corp. (OTC: MEDIF) (TSX: LABS), Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT), Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), Cresco Labs Inc. (OTC: CRLBF) (CSE: CL), Canopy Growth Corporation (NYSE: CGC)
In the meantime, there are various political attempts to convince governors across the country to legalize cannabis products either for medical or recreational use. Recently, a coalition of advocacy groups and cannabis businesses have introduced a new plan to legalize commerce across state lines regardless of federal prohibition. Adam Smith, founder and President of the Alliance for Sensible Markets, explained, according to the Marijuana Moment, that the proposed policy change, "immediately across producer states, you will see valuations for thousands of farms and businesses increased by multiples, which will spur an immediate wave of investment expansion and job creation. On the east coast in the consumer states, legalizing cannabis with interstate commerce, will mean that they can get industries up and running and stable in six-to-18 months, rather than three years or five years or seven years, spurring an immediate wave of investment, business formation and tens of thousands of jobs just when the states need them. We are looking to partner with the governors and be their partners in economic recovery."
MediPharm Labs Corp. (OTCQX: MEDIF) (TSX: LABS) just announced breaking news this morning that, "its wholly owned subsidiary MediPharm Labs Inc. will supply premium, GMP-certified formulated cannabis oil to XLR8 BRAZIL ("XLR8"), a Rio de Janeiro based value-added distributor serving Brazil, Latin America's largest medical cannabis market.
Under the two-year agreement commencing from the time of product authorization, MediPharm Labs Inc. will provide a variety of cannabis concentrate formats for patient-ready formulated products that will be distributed by XLR8 to leading pharmacies and other authorized channels in Brazil. The initial product SKUS include a 20:1 CBD rich product and a 10:10 balanced THC and CBD formulation. XLR8 will obtain ANVISA Sanitary Product Authorization and undertake the process for final Product Registrations.
"By virtue of its large population, forward-thinking legislative eco-system and economic strength, Brazil is one of the world's most promising medical cannabis markets and the natural next port of call for our international expansion and growth strategy," said Pat McCutcheon, CEO of MediPharm Labs. "Given Brazil's potential as one of our key target markets, we have chosen to partner with XLR8 because of their focus on quality and compliance, their extensive relationships with local healthcare professionals and dedicated focus on the advancement of medical cannabis scientific validation and education. They are the perfect complement to and outlet for our pharma-quality production."
This is MediPharm Labs' second distribution agreement in Latin America and evidence of growing international momentum with its strategy of targeting emerging jurisdictions that offer excellent opportunity for sustainable revenue expansion.
"As early participants in the Brazilian medical cannabis industry dating back to its involvement in the pioneering import of medical cannabis oil for patient use from Canada to Brazil in 2017, XLR8 is pleased to have entered into this supply agreement with one of the only PIC/S GMP certified manufacturers of medical cannabis derivatives," says Mike Dacks of Type 2 Ventures who acts as a strategic advisor to XLR8. "We look forward to bringing these products to market and to working with ANVISA as well as our ecosystem of local partners to bring the required clinical validation for final Product Registrations under the new Brazilian legislative framework."
"In our view, Brazil is destined to be a global powerhouse in medical cannabis," said Thiago Callado, Founder and CEO of XLR8. "To make this exciting future a reality, Brazilians need reliable access to formulations that are constructed using proven methodologies that meet the most rigorous international standards of care. By aligning with MediPharm Labs, a company that has GMP certification, the veritable gold seal in pharma-grade production, XLR8 can now begin to fulfill our mission of market leadership."
About Brazil's Market - Using a range of pricing, consumption and patient datasets, the LATAM Cannabis Report™ by Prohibition Partners(1) forecasts that the LATAM market is expected to exceed US$12 billion by 2028, offering "serious growth potential to global cannabis companies." Today, Brazil is the region's largest addressable market with a population of nearly 210 million, and according to Prohibition Partners, Brazil could potentially have one of the world's highest potential patient counts.
In December 2019, Brazil established a new legalized environment for the sale and consumption of cannabis for medical use. As part of the announcement by the National Agency for Health Surveillance of Brazil ("ANVISA"), a new class of medical cannabis products can be prescribed by doctors and sold through pharmacies, enabling safe and legal patient access.
The regulatory framework, valid for an initial three-year term, governs the manufacture and import of medical cannabis products as well as the requirements for commercialization, prescription, dispensing, monitoring and supervision. ANVISA's rules apply to medicines whose therapeutic indication is restricted to patients with severe and/or life-threatening debilitating diseases and without alternative therapy.
Since 2015, ANVISA has allowed for the importation of cannabidiol-based medicines and other cannabinoids for "compassionate use".
MediPharm Labs' facilities were recently certified by the Australian Therapeutic Goods Administration ("TGA") as meeting the GMP standard of production. The TGA is one of 53-members of the Pharmaceutical Inspection Co-operation Scheme (PIC/S). Many PIC/S members enter into mutual recognition agreements whereby each participating country's regulatory authority specifically recognizes certain processes and procedures of the other country to expedite the international flow of goods. For cannabis extracts, Brazil requires PIC/S GMP certification for foreign produced goods and recognizes MediPharm Labs' TGA GMP certification. XLR8 intends to obtain its ANVISA Sanitary Authorization and approvals required for importation.
For our latest "Buzz on the Street" Show featuring MediPharm Labs Corp. recent corporate news, please head over to: https://www.youtube.com/watch?v=HMq4ih8pFnM
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) introduced earlier last month its proprietary Mood Ring cannabis brand for the Canadian market. The Mood Ring brand and product line will officially launch in select Canadian markets this fall to meet consumer demand for high-quality, affordable and environmentally friendly cannabis products. "Mood Ring is directly aligned with our strategy to move closer to the consumer and drive our growth with unique, high-quality and affordable health and wellness branded products," said Michael Cammarata, Chief Executive Officer of Neptune Wellness Solutions. "Our initial launch of Mood Ring will focus on CBD and THC products that we can immediately scale up to support the volumes required to meet demand, with future products in development. We intend to price our products to be competitive with the illicit market, which will provide legal options for legacy consumers that meet their needs and expectations, while attracting new consumers in a friendly and approachable way."
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) announced last September that it had closed its previously announced acquisition of four Redwood Holding Group, LLC operating subsidiaries. The transaction provides Cronos Group with a leading U.S. hemp-based products platform, including hemp-derived cannabidiol infused skincare and other consumer products that are sold online and through retail and hospitality partner channels in the United States under the brand, Lord Jones™. Mike Gorenstein, Cronos Group's Chairman, President and Chief Executive Officer, said, "This acquisition is one of a number of new growth opportunities that is differentiating our company and our strategic direction. We are pleased to have completed this acquisition and look forward to working closely with Rob and Cindy to further build on their record of innovation and fully capitalize on the platform they have created."
Cresco Labs Inc. (OTCQX: CRLBF) (CSE: CL) announced earlier in July the opening of its eighth Illinois dispensary in the city of South Beloit. The adult-use dispensary is located near Highway 75 and visible from Interstate 90 by the Illinois-Wisconsin border. "We are thrilled to bring the Sunnyside retail experience to the hundreds of thousands of people living in South Beloit and surrounding communities in Winnebago County. This is our third store opening since the COVID-19 pandemic began, and I'm incredibly proud of our team's dedication to providing responsible access to cannabis," said Charlie Bachtell, Cresco Labs' CEO and Co-founder. "At 7,208 square feet, this is one of the largest dispensaries in Illinois and across our entire portfolio. Illinois cannabis sales set a record in June reaching approximately $77 million, which translates to an almost billion-dollar annualized run rate. With our 6x increase in cultivation capacity and focus on going deep in the state, we continue to command an outsized share of this market."
Canopy Growth Corporation (NYSE: CGC) announced on August 28th, the Company will be opening 10 brick-and-mortar retail cannabis locations across Alberta under its award-winning Tweed and Tokyo Smoke banners. This announcement marks the Company's latest commitment to national retail expansion and added consumer engagement opportunities across the country. "With 10 new stores set to open and additional locations in the pipeline, we are thrilled to announce this milestone and excited to bring the Tokyo Smoke and Tweed guest experiences to Alberta for the first time," said Grant Caton, General Manager for Canada at Canopy Growth. "We've seen the value brick-and-mortar retail brings to our consumers – welcoming new guests to learn about cannabis and building relationships in new communities – and we're excited to share our knowledge and industry leadership across the region."
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