While the global cannabis industry has grown at a remarkable pace over the past several years, its growth has been hindered by burdensome regulatory challenges. As numerous countries have moved to either decriminalize cannabis for adult-use in the past decade, others have decided to legalize cannabis solely for medicinal purposes. Notably, countries such as the U.S. and Canada are thriving in the recreational market because of their large legal channels. However, recreational markets have come under intense scrutiny due to the influx of tainted products from the black market. In recent months, hundreds of medical cases have emerged related to vaping and the Centers for Disease Control and Prevention noted that THC vape products have played a major role in the outbreak. The CDC mentioned that vape products purchased from illicit vendors should be disposed of immediately and advised consumers to obtain their products from authorized retailers. New York health officials have confirmed that synthetic vitamin E is the main threat in tainted vape carts. Moreover, the U.S. Food and Drug Administration found traces of formaldehyde and pesticides in the carts as well. AS such, the data compiled by health officials has deterred many consumers from the market, including the legal industry. Research firm New Frontier discovered that nationwide vape sales even fell by 15% in the first week of September and saw no rebound through September 18th. Specifically, states such as New Mexico, Massachusetts, and Nevada witnessed their sales decline by a third, while California fell by 6%. In response to the epidemic, many industry experts have told consumers to purchase cannabis products from legal vendors, who explicitly mention the additives as well as the growing procedure of the product. And in light of recent events, consumers and federal officials alike are beginning to demand for more stringent research and better-regulated products. According to data compiled by Verified Market Research, the global marijuana market was valued at USD 42.20 Billion in 2016. Furthermore, by 2025, the market is expected to reach USD 466.81 Billion while registering a CAGR of 35.3% from 2018 to 2025. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Tilray, Inc. (NASDAQ: TLRY), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Harvest Health & Recreation, Inc. (OTC: HRVSF) (CSE: HARV), Planet 13 Holdings Inc. (OTC: PLNHF) (CSE: PLTH)

Despite legalization efforts in certain regions, many consumers still tend to purchase their products from illegal vendors. In particular, one year after Canada fully legalized cannabis, 60% of Canadians still obtain their products from black market dealers or sources that are not entirely legal. However, the percentage has steadily fallen since Canada legalized cannabis back in October 2018. Currently, consumers purchase their products from the black market because it is typically much cheaper than obtaining goods from legal vendors. According to a study by Statistics Canada, legal cannabis now costs 65% more than black market products, increasing from 50% in the fourth quarter of 2018. And while legal cannabis may be expensive to most consumers, a study by Brightfield Group discovered that 43% of the respondents were willing to pay more for premium, while just 34% were reluctant to pay more for certified organic products. On the other hand, occasional users were more willing to pay for healthier methods of delivery. Consequently, certain consumers decided to turn towards “craft cannabis.” Cultivating craft cannabis is the meticulous process of growing high quality and organic flowers, which can appeal to both spectrums of user demands. Specifically, craft cultivators avoid using any artificial products, such as pesticides and growth stimulants during the growing process. The use of additives can heavily weaken the cannabinoid content within strains and also create an inorganic product. In order to maintain a healthy and potent strain, craft cultivators tend to each and every individual plant to ensure it grows properly. “When it comes to retail, consumers will always pay more for premium-quality products. In the cannabis industry, that means top-shelf genetics cultivated in small batches will fetch higher prices,” said Anne Forkutza, former Vice President of Strategic Partnerships and Brand Officer at Cova Software.

Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT) is also listed on the Canadian Securities Exchange under the ticker (CSE: CRFT). Yesterday, the Company announced that, “Between 2014 and 2018 global sales of legal cannabis more than tripled from $3.4 billion to $10.9 billion, according to the State of the Legal Cannabis Markets report from Arcview Market Research. BDS Analytics calls for a near-quadrupling from 2018 levels to $40.6 billion by 2024 at an annual growth rate of 21.9%. This has led many people to wonder, why the recent market downturn in the cannabis sector?

‘Legal cannabis, particularly in Canada, has been struggling under the weight of burdensome regulations, poor supply-chain management, and quality issues,’ said Jamie Shaw, Chief Communications and Culture Officer for Pasha. ‘Coupled with that, companies in the sector were slow to deliver the results expected and were generally seen as overvalued. Share prices were determined at a time when there were relatively few licences that seemed to have a stranglehold on the regulated marketplace.’

While these challenges are most pronounced in today’s market, for Pasha it has been an affirmation of its business plan. ‘We never bought into the big-box mentality that’s causing many of these problems,” Shaw said. “Pasha has focused on small batch, craft producers, and has been meeting its goals at a quick pace, with the first micro-cultivation harvest expected in December.’

Pasha has been on-boarding brands and people that made legalization possible, including Baked Edibles, Earth Dragon Organics, and Beard Brothers Collective, and has acquired a Health Canada licensed facility on Vancouver Island. Pasha expects to be the first licensed, nation-wide, all-craft company to be operational by end of Q4 2019/early Q1 2020.

Of the first 5 micro-licences issued by Health Canada, Pasha has signed supply agreements with all of them. Pasha also has signed supply agreements with 60 more applicants currently in the CTLS queue with Health Canada, and another 40 navigating the licensing process with Pasha subsidiary, BC Craft Supply Co. Ltd. With 100 micro-cultivators each permitted to produce up to 500kg per year, Pasha could have the ability to bring up to 50,000kg per year of high-quality craft cannabis to Canadian consumers.

‘The legal market has yet to see products with the same care and attention to detail that went into the highest quality, illicit products,” said Patrick Brauckmann, Executive Chair of Pasha Brands. “Pasha is committed to bringing products to the marketplace that put the consumer first.’

Partnered with powerful distributors like Great North and developing innovative industry solutions like Craft Labs, Pasha looks to disrupt how people think of legal cannabis.

SOURCE FinancialBuzz.com