Canada became the second country ever to fully legalize cannabis back in late 2018, however, the country continues to struggle with meeting the exorbitant demand. Additionally, cultivators and producers are facing regulatory challenges which are hindering their operations. For example, the Canadian government has provided a very limited number of cultivation licenses and curtailed retail operating hours. Consequently, supply shortages have significantly impacted many retailers and dispensaries’ financials. Certain Canadian provinces, such as Ontario and Quebec, were ultimately forced to close down select brick-and-mortar stores due to the overwhelming demand. And while supply shortages seemed to be a major problem within the Canadian cannabis marketplace, Brock University Professor Michael Armstrong believes otherwise. The industry just became fully legal in Canada not even a year ago, meaning the industry is still heavily monitored and regulated. Even so, Armstrong said that legal production began ramping about half a year prior to Canada’s legalization. Moreover, Armstrong cites data from 2017 and highlights that production rates have actually grown year-over-year. He mentions that producers have been stockpiling supply and are continuing to grow cannabis at a faster rate. And if licensed producers can continue increasing their inventory size, Armstrong predicts that supply will catch up to the demand by the end of 2019. Furthermore, cultivators have implemented new technologies and farming methods in order to bolster their yield per harvest. The combination of increasing production rates, as well as the use of new technologies, is expected to eventually close the gap between supply and demand. According to data compiled by Verified Market Research, the global marijuana market was valued at USD 42.20 Billion in 2016. By 2025, the market is expected to reach USD 466.81 Billion while registering a CAGR of 35.3% from 2018 to 2025. Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Innovative Industrial Properties, Inc. (NYSE: IIPR), HEXO Corp. (NYSE-A: HEXO) (TSX: HEXO), CannTrust Holdings Inc. (NYSE: CTST) (TSX: TRST)

There are various methods farmers have implemented in order to obtain a higher yield each harvest. Primarily, techniques such as extending the harvest length, increasing light intensity, manipulating the plants’ growth, providing essential nutrients, and having a controlled  environment can lead to higher yields. Moreover, careful trimming can also provide a better harvest. While the genetics of a strain may play a large role in the harvest, proper cultivation care can also play a significant factor. Some growers have thus taken an extra step and integrated state-of-the-art technology to help their plants grow much more richly. For example, technological entrepreneurs have developed innovative technology such as lighting and air circulation systems. These systems are designed to provide a more controlled setting as well as ample lighting and airflow to the plants. Moreover, some companies have taken a step further, also integrated artificial intelligence or smart technology to fully automate their grow houses. Furthermore, the controlled growing procedure can also produce more potent strains and controlling the environment can potentially lead to an increase in trichome development on the cannabis plant. A significant portion of the cannabinoids found in the cannabis plant is located predominantly within the trichomes. Additionally, more companies are continuing to expand upon their innovative technologies or introducing unique and modern machinery. As such, the advancements in technology are further propelling the overall cannabis industry, allowing cultivators and growers to produce top quality strains while increasing their harvest. “With over 10,000 years of history, cannabis cultivation remained quite traditional up until prohibition in the 1930s. As law enforcement became increasingly drastic, cannabis cultivation went indoor, switching from agricultural to horticultural practices. This led to efficiencies but also to a certain evolution of varietals being grown, driven by the new constrains imposed by prohibition. With legalization, we probably won’t go back in time but evolve toward new, less constrained or… otherwise constrained techniques,” said Alan Founder, Chief Executive Officer of Strainly.

Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV) is also listed on the TSX Venture Exchange under the ticker (TSX-V: RIV). Earlier today, the Company announced, “an investment and strategic collaboration between Canopy Rivers and ZeaKal, a California-based plant science innovator with proprietary technologies that sustainably increase photosynthesis, improve plant yield and enhance nutritional profiles for a variety of agricultural crops. The investment from Canopy Rivers marks another significant corporate milestone this calendar year for ZeaKal, following the February announcement of its R&D collaboration with Corteva Agriscience (NYSE: CTVA), the recently spun-out and NYSE-listed agricultural science division of DowDuPont.

ZeaKal’s proprietary technology, PhotoSeed, increases a plant’s intrinsic photosynthetic capacity, meaning that PhotoSeed plants can convert more sunlight and carbon dioxide into energy for growth. This results in substantial improvement in seed and grain yield, as well as improved macronutrient profiles that drive an increase in both oil and protein content. For farmers, this means better productivity and profit margins; for consumers, this means higher nutritional profiles and an environmentally friendly way to meet growing global demand.  With multi-year field trials across diverse plant species in the United States, Canada and New Zealand, the initial commercial focus has been on major row crops. Following Canopy Rivers’ investment, ZeaKal intends to expand its program to include cannabis and hemp.

‘Our investment in ZeaKal, the fifth consecutive international transaction for Canopy Rivers, builds on our thesis of selecting globally scalable and innovative processes, products, and technologies from complementary industries, and applying them to the cannabis and hemp economy,’ said Mary Dimou, Director of Business Development at Canopy Rivers. ‘Plant sciences is a mostly overlooked but absolutely critical segment of the cannabis and hemp value chain, and we are seeking to address this gap with this investment. ZeaKal’s technology has already realized success across a number of crops during field trials, and these are crops that have been commercialized for decades. The application of this innovative technology throughout the Canopy Rivers portfolio and the cannabis and hemp industry at large could be a game changer.’

Canopy Rivers believes that ZeaKal’s PhotoSeed technology has the potential to translate into significant benefits for the cannabis and hemp industry. Due to prohibition, the cultivation of cannabis and hemp has lacked the agricultural research and advancements that have significantly improved the cultivation of other crops. Canopy Rivers believes that applying ZeaKal’s PhotoSeed technology to cannabis and hemp represents a significant step forward – with increased crop yield, higher oil production, additional grow cycles, and enriched cannabinoid output numbering among the potential benefits of the technology. While trials on cannabis and hemp have yet to begin, the positive results already achieved give Canopy Rivers confidence in ZeaKal’s experienced team and its ability to successfully optimize and adapt its technology for expansion into this industry.

‘We are elated that Canopy Rivers, a cannabis and hemp industry authority, has selected ZeaKal as an agriculture partner,’ said Han Chen, Chief Executive Officer of ZeaKal. ‘Beyond the capital, it is further validation that PhotoSeed is a next-generation blockbuster trait that can be utilized across diverse industries. With its rich domain and technical expertise, Canopy Rivers is supporting our entry into the cannabis and hemp markets with a technology we expect to be transformative for the sector.’

As a result of its US$10,000,000 investment, Canopy Rivers owns approximately 8.7% of ZeaKal on a fully diluted basis and holds an observer seat on ZeaKal’s board of directors.

SOURCE FinancialBuzz.com