Recent Legalization Clears a Path for Cannabis Market Growth

NEW YORK, January 17, 2019 /PRNewswire/ --

Recent political trends have positioned the cannabis industry to witness exponential growth in the coming years. In October of last year, for instance, Canada legalized cannabis entirely, allowing for recreational adult-use to begin across the country. Shortly after, the U.S. state Michigan legalized cannabis for recreational use while Missouri and Utah legalized it for medical applications. Then, one month later in December, the U.S. Congress approved and passed the new Farm Bill, which provided agricultural extensions. Notably, the Farm Bill allows for small-scale hemp cultivation facilities. Previously, hemp was grouped with marijuana as a Schedule 1 drug, however, since then, hemp has been removed due to its non-psychoactive properties. While cannabis may still be heavily restricted and moderated globally, legalization and mitigating regulations are steps taken towards the industry's widespread expansion. According to data compiled by Mordor Intelligence, the global cannabis market was valued at USD 7.7 Billion in 2016 and is expected to reach USD 65 Billion by 2023. Additionally, the market is expected to grow at a robust CAGR of 37% throughout the forecast period from 2019 to 2024. CLS Holdings, USA Inc. (OTC: CLSH), Molson Coors Brewing Company (NYSE: TAP), Altria Group, Inc. (NYSE: MO), Aurora Cannabis Inc. (NYSE: ACB), KushCo Holdings, Inc. (OTC: KSHB)

Globally, cannabis is primarily being used for medical applications to treat conditions such as chronic pain and cancer. European countries like Spain, the Netherlands, and Italy are exploring cannabis for medical use as well. Despite the movements ongoing internationally, the U.S. continues to dominate the industry and accounts for the approximately 90% of the global market. Currently, the U.S. only has 10 states and Washington D.C. that have legalized cannabis for recreational use but states like California, Colorado, and Nevada are the driving force for the recreational market. "Over the next couple years we will see 40 or more states approving cannabis for medicinal use, the overwhelming majority of those states going full recreational," said Danny Davis, Managing Partner of Convectium. "I anticipate the next administration will lean left and that will likely be the catalyst to a push for re-scheduling and federal approval. With this deregulation, we will see national support among citizens grow into the 70% or higher range, making M&A activity more commonplace among traditional firms and corporate sponsorships from cannabis companies less stigmatized and more mainstream."

CLS Holdings, USA Inc. (OTCQB: CLSH) yesterday, the Company announced breaking news that, "it has entered into an option (the "Agreement") to acquire In Good Health, in accordance with the previously executed letter of intent. In Good Health is a licensed medical dispensary in Brockton, Massachusetts.

Subject to the terms and conditions of the Agreement, the parties have agreed upon all of the documents necessary to complete the acquisition. The completion of the acquisition of In Good Health remains subject to a number of conditions as set out in the Agreement.

In Good Health is located 25 miles south of downtown Boston and is one of the 48 licensed dispensaries in the state. In Good Health operates a dispensary that was the second licensed medical dispensary in the state and has been operational since September 2015. In Good Health is currently servicing 18,000 registered patients and delivering to 1,700 homes with key product offerings of flower, concentrates, vapes, edibles, pre-rolls and tinctures.

Massachusetts has a population of 6.9 million people as compared to 5.6 million people in Colorado. Massachusetts is also centrally located to the dense population of New England with a less than 100-mile drive from Rhode Island, Connecticut, New York, New Hampshire and Vermont. In 2017, Colorado generated $1.5 billion in legalized marijuana sales and had over 500 licensed dispensaries and over 700 licensed cultivation facilities. Massachusetts currently has issued only 48 licensees.

About In Good Health: In Good Health is a for-profit corporation which holds a Certification of Registration to operate a registered marijuana dispensary in Massachussets. In Good Health was one of eleven original applicants awarded a Certificate of Registration from the Department of Public Health, and was the second to open in the state. In Good Health successfully operated its co-located marijuana cultivation and dispensary facility in Brockton, Massachusetts in September, 2015.

About CLS Holdings USA, Inc: CLS Holdings USA, Inc. (CLSH) is a diversified cannabis company that acts as an integrated cannabis producer and retailer through its Oasis Cannabis subsidiaries in Nevada, and plans to expand to other states. CLS stands for "Cannabis Life Sciences," in recognition of the Company's patented proprietary method of extracting various cannabinoids from the marijuana plant and converting them into products with a higher level of quality and consistency. The Company's business model includes licensing operations, processing operations, processing facilities, sale of products, brand creation and consulting services."

Molson Coors Brewing Company (NYSE: TAP) has defined brewing greatness for more than two centuries. Molson Coors Canada (MCC), the Canadian business unit of Molson Coors Brewing Company, and HEXO Corp. (OTC: HYYDF) recently announced that they have closed the transaction announced on August 1^st, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer. Vye will report to the Truss board of directors consisting of three members appointed by MCC and two members appointed by HEXO. "With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running," said Brett Vye, Chief Executive Officer at Truss. "When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer. Why "Truss"? We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future."

Altria Group, Inc. (NYSE: MO) wholly-owned subsidiaries include Philip Morris USA Inc. (PM USA), U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co. (Middleton), Sherman Group Holdings, LLC. Altria Group, Inc. recently announced that it had entered into an agreement to acquire newly issued shares in Cronos Group Inc. (NASDAQ: CRON), a leading global cannabinoid company, headquartered in Toronto, Canada. The transaction represents a 45% equity stake in Cronos Group, at a price of CAD 16.25 per share, for an aggregate investment by Altria of approximately USD 1.8 Billion (approximately CAD 2.4 Billion). This investment positions Altria to participate in the emerging global cannabis sector, which it believes is poised for rapid growth over the next decade. It also creates a new growth opportunity in an adjacent category that is complementary to Altria's core tobacco businesses. Altria expects its investment to help Cronos Group accelerate its growth strategies and its R&D and intellectual property development. Additionally, Altria will provide expertise to help Cronos Group thrive in the growing global cannabis market. These services may include regulatory affairs, regulatory science, compliance, government affairs and brand management. "Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria," said Howard Willard, Altria's Chairman and Chief Executive Officer. "We believe that Cronos Group's excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential."

Aurora Cannabis Inc. (NYSE: ACB), headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 500,000 kg per annum and sales and operations in 22 countries across five continents, is one of the world's largest and leading cannabis companies. Aurora Cannabis Inc. recently announced that the Company has entered into a letter of intent to acquire all the issued and outstanding shares of privately held Whistler Medical Marijuana Corporation, in an all-share transaction valued at up to approximately USD 175 Million, including certain milestone payments. "This transaction adds an iconic, organic certified BC-based brand with exceptional traction and a significant price premium in both the medical and retail markets," said Terry Booth, Chief Executive Officer of Aurora. "We intend to accelerate the completion of Whistler's Pemberton expansion project, and leverage our domestic and international distribution channels to increase market reach for their exceptional products. Whistler has established leadership in the organic cannabis market, and we look forward to welcoming Christopher and his team to the Aurora family."

KushCo Holdings, Inc. (OTCQB: KSHB) is the parent company to a strategically integrated group of business units that are transformative leaders across several industries. KushCo Holdings, Inc., the parent company of innovative industry leaders such as Kush Supply Co., Kush Energy, The Hybrid Creative, and Koleto Innovations, which provide a range of services and products for a variety of industries including the regulated cannabis and CBD industries, recently reported its financial results for its first fiscal quarter of 2019, for the period ended November 30, 2018. Revenue was up 186% Year-over-Year to USD 25.3 Million. Revenue exceeded the previous quarterly high of approximately USD 20 Million in the fourth fiscal quarter of 2018, representing a 26.5% increase. On a Non-GAAP Basis, excluding the impact of the non-recurring charges described above, as well as other non-cash gains and losses outlined below, net loss was equal to USD 8.0 Million and net loss per share was negative USD 0.10 for the first quarter of fiscal 2019. Nick Kovacevich, Chairman and Chief Executive Officer, commented, "Coming off an exceptionally strong fiscal 2018, we continued to retain and grow our customer base, grow market share and drive sales across all our key markets in the first fiscal quarter of 2019. This drove record growth in the quarter, with revenues of USD 25.3 Million, representing 186% growth, compared with approximately USD8.8 Million in the first fiscal quarter of 2018. This strong performance reflects the strength of our business model, which leverages our ecosystem of diverse business units and product categories to cross-sell product classes, reinforce the sticky nature of our business and support stable revenue growth.

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