Cannabis
U.S. and Canada Lead the Cannabis Industry Despite Differing Regulations
As of late 2018, it was legal to cultivate marijuana in the homes of 21 U.S. states and the District of Columbia. However, some states such as Rhode Island and Oklahoma strictly stated that home growers can only cultivate cannabis for medical purposes. On the other hand, states such as California and Coloradoallow their residents to grow cannabis for both recreational and medical applications. In particular, Colorado allows its residents to grow up to six plants per person, but if a household has two or more people, it is limited to 12 plants maximum per householder. Before the prohibition era, many growers cultivated cannabis outdoors, largely for medicinal purposes. However, once former President Franklin D. Roosevelt signed the Marihuana Tax Act of 1937, a large influx of indoor and greenhouse facilities began to emerge. Therefore, cultivators were able to hide their grow houses from government officials. But now legalization has gained momentum across the world, resulting in more outdoor facilities once again. Indoor and greenhouse facilities are still popular, but outdoor facilities provide growers with a more natural end product. On the contrary, indoor and greenhouse facilities allow cultivators to control the growing environment, allowing them to manipulate the growing process of the plant and potentially grow more potent cannabis buds and obtain a substantially higher yield per harvest. Nowadays, greenhouse and outdoor facilities are much more popular because they’re built to produce on a large scale. However, the major drawback of these facilities is that the quality of the buds can be diminished as cultivators go for quantity over quality. Whether cultivators are choosing a more natural or a more controlled approach, it is still tapping into various consumer markets. For instance, a frequent consumer may prefer a more potent strain, while a first time user might be more attracted to the organic and natural aspect of outdoor-grown cannabis. Generally speaking, cultivators can market to different consumer trends based on their growing methods and techniques. According to data compiled by Grand View Research, the global legal marijuana market is expected to reach USD 146.4 Billion by 2025 while registering a CAGR of 34.6%. Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Curaleaf Holdings, Inc. (OTC: CURLF) (CSE: CURA), iAnthus Capital Holdings, Inc. (OTC: ITHUF) (CSE: IAN)
Unlike the U.S., Canada’s home growing regulations tend to vary across different provinces. To note, the U.S. has not federally legalized cannabis but has given states the jurisdiction to decide whether to legalize cannabis or not. On the other hand, Canada fully legalized cannabis in October 2018. Despite the legalization, it still illegal to cultivate in certain provinces, including Manitoba and Quebec. Even if home growers follow federal guidelines, growing in Manitoba or Quebec violated provincial regulations. For instance, in Manitoba, the penalty for growing between one to four cannabis plants at home is a USD 2,542 fine. Quebec has a much more lenient fine, ranging from USD 250 to USD 750 for the first offense. However, fines can double for repeat offenders. Moreover, the consumption of cannabis in provincial areas will also result in fines and also includes additional court costs. In large, the two provinces have enforced the regulations to ensure an underage person does not consume cannabis. Yet, the Canadian government has pushed to allow homeowners to grow their own cannabis. Comparatively, the Canadian federal government has also taken precautions by limiting cultivation licenses to producers and shortening retail operating hours. And as a result, Canada’s total adult-use sales were weaker-than-expected. Nonetheless, industry analysts believe that the Canadian market will mature and continue to thrive over the next several years as regulations tone down. Once cultivators ramp up operations and as more consumers enter into the marketplace, the Canadian market is positioned to become a global driving force for the cannabis industry. “I would say there’s a lot of adjustment that needs to take place in this sector,” said Bethany Gomez, Managing Director of Brightfield Group. “The good thing is Canada has one of the highest cannabis usage rates in the world — so it’s going to be a longer play.”
Canopy Rivers Inc. (OTC: CNPOF) (TSX-V: RIV) is also listed on the TSX Venture Exchange under the ticker (TSX-V: RIV). Earlier last week, 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
‘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
‘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
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