Monday, 2 December 2019

U.S. Support for Cannabis Legalization Just Increased Again

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FinancialNewsMedia.com

PALM BEACH, Florida, Dec. 2, 2019 /PRNewswire/ -- Many more Americans now support cannabis legalization. A Pew Research Center survey now finds that 67% are in support. That's up from 62% year. Better, the House Judiciary Committee just passed The Marijuana Opportunity Reinvestment and Expungement (MORE) Act with a vote of 24 to 10. While the bill still has a way to go before passage, there are hopes this move could federally decriminalize cannabis by removing it from Schedule I Controlled Substances.

That's opening a wide range of opportunity for companies such as Nutritional High International Inc. (CSE:EAT) (OTCQB:SPLIF), Aphria Inc. (NYSE:APHA)(TSX:APHA), Tilray Inc. (NASDAQ:TLRY), and HEXO Corporation (NYSE:HEXO) (TSX:HEXO), and Canopy Growth Corporation (TSX:WEED)(NYSE:CGC).

Nutritional High International Inc. (CSE:EAT) (OTCQB:SPLIF) BREAKING NEWS: Nutritional High International Inc. just announced $23.6 million revenue from the sale of cannabis related products primarily through its wholly owned distributor in California, Calyx Brands Inc.,  representing year over year growth of 306%.  In the coming months, management fully expects to continue revenue growth from Calyx, while at the same time being able to consolidate revenue and financials from Green Therapeutics and directly enter the Colorado market. The company also reported a gross profit of 23.2% indicating cost of goods sold of $18.1 million including costs of product purchase, direct labor related to products sales and an allocation of overhead directly attributable to product sales. Margin improvement of 10.1% year over year. In the past year, Nutritional High has evolved and organized as two distinct lines of business – distribution and manufacturing. The Company's distribution business, Calyx Brands, is based in California and has rapidly expanded its footprint in the past year to serve over 600 dispensaries in the State. Nutritional High's manufacturing business started in Colorado with Palo Verde LLC and is looking to expand into Nevada, California. The Company has successfully leveraged both manufacturing and distribution for its own FLÏ™ branded product and is pursuing opportunities to do the same for other brands.

Nutritional High entered the distribution business in March 2018 with the acquisition of Calyx Brands. Since this time, Calyx has grown distribution revenues by 368% year over year and has become a leading distributor of edibles in California. The Calyx platform is unique in that it provides distribution and fulfilment supported by a strong sales and product support model. This model has resulted in significant success with the top brands in the market and continues with four new brands being onboarded in the fourth quarter alone.
In pace with the evolution of the California market, Calyx will be introducing a hybrid model for distribution where client brands can select the level of service required for each product on an à la carte basis. Through this new service model, brand partners will have the option of selecting some or all of the following services: Core Fulfilment Services (Transportation, Warehousing, Delivery and Order Management), Optional Fulfillment Services (Title Possession and Working Capital/AR Factoring) and Enhanced Services (Field Sales and Inside Sales, Stock Out Management, Retail Merchandizing and Brand Ambassadors, Data and Analytics services). This new model positions Calyx to remain the preferred distribution partner for brands at every stage of their growth cycle.

Other cannabis-related developments from around the markets include:
Aphria Inc. (NYSE:APHA)(TSX:APHA) announced that all five of its medical and recreational brands, as well as its subsidiary Broken Coast Cannabis' Head Grower were recognized at the 6th Annual Canadian Cannabis Awards presented by Lift & Co (TSXV: LIFT and OTCQB: LFCOF). The Company received a total of seven awards. An expert panel of judges awarded Broken Coast's Head Grower Kevin Anderson 'Master Grower' and Aphria's Solei's CBN Renew oil 'Innovation of the Year'. Additionally, after more than 31,000 Canadians voted, the Company's adult-use brands Solei, RIFF, Good Supply, Broken Coast, and its medical brand Aphria, took home top honours in product categories. "We are thrilled to have not only all five of our brands across our medical and recreational portfolios – Solei, RIFF, Good Supply, Broken Coast and Aphria – recognized by thousands of Canadians but to have our Solei Renew CBN oil win 'Innovation of the Year'," said Irwin D. Simon "These awards speak to the quality of our products and strength of our brands, as well as our commitment to innovation and continuously setting the bar higher to deliver products we believe meet the needs of our patients and consumers."

Tilray Inc. (NASDAQ:TLRY) reported financial results for the third quarter ended September 30, 2019. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.  "Our performance in the third quarter, including solid revenue growth and sequential gross margin expansion, reflects the positive business trends we have underway," said Brendan Kennedy, Tilray's President and Chief Executive Officer. "We are in the early days of seeing our strategic initiatives bear fruit – including our European expansion, brand portfolio evolution and strategic partnership product launches. We continue to expect significant growth in the fourth quarter and into 2020." He continued, "Beyond that, our strong global infrastructure and supply chain are a critical competitive advantage and our team is focused on maximizing the substantial opportunity we have to deliver long-term, sustainable value to our shareholders." Revenue increased 408.6% to $51.1 million (C$67.8 million), compared to the third quarter of last year, driven by the Canadian adult-use market, the Manitoba Harvest acquisition, and growth in international medical markets as a result of the first GMP certification of the Portugal facility. Excluding excise tax, revenue was $48.2 (C$64.1) million.  Total kilogram equivalents sold increased over six-fold to 10,848 kilograms from 1,613 kilograms in the prior year period.

HEXO Corporation (NYSE:HEXO) (TSX:HEXO) just launched Original Stash, its new value brand, in Ontario on Black Friday (Friday, November 29, 2019). Adult-use consumers in Ontario will be able to purchase 28 grams (1 oz) of quality dried cannabis flower at black market prices, retailing at $140 ($5 per gram), including taxes. "HEXO is disrupting the black market this Black Friday," said Sebastien St-Louis, CEO and co-founder of HEXO. "We are committed to playing a valuable role in eliminating the illicit market and in protecting public health and safety. That's why we are pleased to continue rolling out Original Stash across Canada, providing consumers with a quality product at a low price. Our experience with the launch of Original Stash in October demonstrates that there is a strong demand for this type of product." HEXO is launching OS.220, the second dried flower product to roll out from the Original Stash brand, in Ontario. OS.220 is a mid-THC Indica flower blend of two strains, available in a 28 g (1 oz) format. The Ontario Cannabis Store is poised to make Original Stash available on its webstore and to all licensed retailers in the province, who can in turn choose to carry the brand. HEXO's Original Stash will be the first brand to be featured as part of the Ontario Cannabis Store's inaugural homepage holiday campaign, in conjunction with Black Friday. "Original Stash is providing consumers with 'quality weed at legit prices'," added St-Louis. "Consistent, reliable and controlled products like this can play a major role in achieving the goals we set out nationally by legalizing cannabis just over a year ago: eliminating the illicit market and protecting public health and safety. We look forward to continuing to work with our regulators and partners to deliver on those objectives."

Canopy Growth Corporation (TSX:WEED)(NYSE:CGC) will officially unveil its new portfolio of Cannabis 2.0 products, including its Distilled Cannabis concept, chocolates, vape cartridges and vape pens at a media launch event in Toronto, Ontario. "With the coming of Cannabis 2.0, our goal is to provide customers with the best quality products, and I truly believe through the hard work and dedication of our team, we have delivered just that," said Mark Zekulin, CEO, Canopy Growth. "Since our first medical sale in 2014, we've been focused on innovation and quality, and now we're expanding that with the launch of our game-changing recreational beverages, chocolates, and vapes." After months of preparation and expansion, the Company is gearing up to supply the Canadian market with a variety of innovative cannabis products. In partnership with Hummingbird Chocolate, the Company's state-of-the-art chocolate factory is now fully operational. On Friday, November 22nd, Canopy Growth received a critical operating and secure storage licence from Health Canada for its 150,000 sq. ft. beverage facility located in Smiths Falls, Ontario. The Company wishes to thank its partner, Constellation Brands, for providing expertise and support in constructing and operating the world-class facility, from building design to equipment selection to staffing requirements. In addition to establishing scaled infrastructure, the development of protectable intellectual property has always been a priority for Canopy Growth. To date, the Company, including through its subsidiaries, holds over 130 patents and has filed more than 330 patent applications.

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