NEW YORK, Feb. 12, 2019 /CNW/ -- After many years of effort and research, cannabis is now widely considered a source of tax revenue for many U.S. states. The majority of these states have already passed a bill to legalize medical cannabis, but only ten states and the District of Columbia have legalized recreational use. States like California, Nevada, Washington, and Colorado are among the few that have adopted recreational cannabis laws and are delivering or are expected to see, upwards of a billion dollars in sales annually. According to the California Department of Tax and Fee Administration, California delivered a total of USD 93.1 Million in taxes off cannabis in the third quarter of 2018. The state is one of the leading marketplaces in the global cannabis industry, however, its economic benefit signifies the monetary value cannabis can deliver. 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 witness a robust CAGR of 37% throughout the forecast period. The growth of the market is heavily attributable to the development and expansion ongoing in both North America and Europe. In particular, these regions are seeing strong support for the legalization of cannabis for both recreational and medical applications. Biome Grow Inc. (OTC: BIOIF) (CSE: BIO), General Cannabis Corp. (OTC: CANN), InMed Pharmaceuticals Inc. (OTC: IMLFF) (TSX:IN), Harvest One Cannabis Inc. (OTC: HRVOF) (TSX-V:HVT), Mentor Capital, Inc. (OTC: MNTR)
The North American segment alone accounted for approximately 90% of the global cannabis market value in 2017. And, the region is expected to continue to dominate the industry moving forward primarily due to Canada and the U.S as the U.S. is the world's single largest market, even though it has yet to federally legalize the plant. As more and more states within the U.S. move to accept cannabis, the market is positioned to explode. For instance, Michigan is one of the states that recently passed legislation to legalize recreational cannabis. According to Forbes, it is expected that recreational cannabis will be taxed at 10%. Furthermore, the state estimated that it will generate approximately USD 737.9 Million in additional tax revenue in the first fourth years following its legalization. "When there are budget deficits and the like, everybody wants to know where is there an additional revenue stream, and one of the most logical places is to go after cannabis and cannabis taxes," said Beau Whitney, a Senior Economist at New Frontier Data, via the Washington Post. "Consumers want to do things legally in general, but they don't want to do it at too much of a price. If they go to 7-11 to pick up cannabis, they're willing to pay 10 to 15 percent on top of what they get on the street. Once they get above that, it slows the transition and makes the consumer think twice about making that legal purchase."
Biome Grow Inc. (OTCQB:BIOIF) (CSE:BIO) also listed on the Canadian Securities Exchange under the ticker (CSE: BIO). Last week the company announced that, "it has released its first shipments of finished product to Newfoundland and Labrador. Products are expected to be delivered directly to retail locations across Newfoundland and Labrador and accessible to consumers next week. A second shipment of finished product will also be sent later this month with an emphasis on independent retail locations.
These first shipments will assist in reducing the immediate supply shortage in the domestic cannabis market in recent months. Biome Grow is committed to serving our customers in Newfoundland and Labrador. The Company is utilizing each of its assets to secure product for this market through internal and external sources and is committed to the long-term partnership that we have with the province.
This first shipment is part of the landmark agreement Biome and its Newfoundland and Labrador brand, Back Home Medical Cannabis Corporation ("Back Home") signed with the Government of Newfoundland and Labrador on November 2nd, 2018. This agreement is the largest cannabis supply agreement in Atlantic Canada and one of the top five largest deals of its kind in the Canadian cannabis market by quantity. The Company expects that the Supply Agreement will represent close to $100 million in revenue per annum starting in 2020.
In addition to regular product supply, Biome and Back Home are also finalizing the site selection for its five wholly owned retail locations. Biome anticipates that the first location will open in Western Newfoundland by Spring 2019.
Biome will also invest $500,000 over five years for research and development in the Province of Newfoundland and Labrador. The Company's investment in the provincial cannabis ecosystem supports Biome's commitment to the Newfoundland and Labrador Cannabis supply chain."
General Cannabis Corp. (OTCQX: CANN) is the comprehensive national resource for the highest-quality service providers available to the regulated cannabis industry. As the legal cannabis industry grows throughout the United States, the industry's leading service provider, General Cannabis Corp., recently announced it is expanding its presence on the East Coast with the opening of a New York office. "Given our growing list of East Coast clients and the steps that states like Massachusetts and New Jersey have taken toward launching adult-use sales, this is the ideal time for General Cannabis to further invest and establish itself in the region," said Michael Feinsod, Executive Chairman of the Board for General Cannabis. "The growth potential for the market in this region is unparalleled. An East Coast office is perfectly suited to cater to this territory as General Cannabis continues to expand its presence nationwide. We plan on expanding our security, operations and marketing segments aggressively throughout the East Coast. In addition, we will be utilizing this office to expand and enhance our corporate, marketing and mergers and acquisitions teams."
InMed Pharmaceuticals Inc. (OTCQX: IMLFF) (TSX:IN) is a pre-clinical stage biopharmaceutical company that specializes in developing novel therapies through the research and development into the extensive pharmacology of cannabinoids coupled with innovative drug delivery systems. InMed Pharmaceuticals Inc. recently announced that it has signed a contribution agreement with the National Research Council Canada Industrial Research Assistance Program to receive funding of up to CAD 500,000 to support InMed's ongoing R&D efforts in cannabinoid biosynthesis. NRC IRAP provides advisory services and funding to Canadian businesses to promote accelerated growth and technology innovation. "Manufacturing of pharmaceutical grade cannabinoids remains a major challenge to the industry," commented Dr. Eric C. Hsu, Ph.D., InMed's Vice President, Pre-Clinical Research & Development. Dr. Hsu continued, "We are extremely honored to receive this non-dilutive investment from NRC IRAP. This funding will support our on-going efforts to establish a leadership position in the field of cannabinoid biosynthesis."
Harvest One Cannabis Inc. (OTCQX: HRVOF) (TSX-V: HVT) is a global cannabis company that develops and provides innovative lifestyle and wellness products to consumers and patients in regulated markets around the world. Harvest One Cannabis Inc. recently announced that its wholly-owned medical subsidiary Satipharm Ltd. has launched European sales of its recently reformulated CBD capsules, now available online at www.satipharm.com. The first product to market is the Satipharm 10mg CBD Gelpell® capsule that provides superior bioavailability and quality. Bricks and mortar distribution of the 10mg CBD Gelpell® capsules will follow with major retailers throughout the United Kingdomand European Union, with Canadian distribution to follow. "We are delighted with the launch of Satipharm's new website and eCommerce platform, making our clinically proven CBD Gelpell® capsules available to consumers across Europe," said Jonathan Hartshorn, President of Satipharm. "With our focus on consumer education, GMP certified products, and superior bioavailability, we feel strongly that consumers will adopt Satipharm's CBD Gelpell® capsules as the product of choice for CBD delivery in the marketplace."
Mentor Capital, Inc. (OTCQX: MNTR) seeks to come alongside and assist private medical marijuana and cannabis companies and their founders in meeting their liquidity and financial objectives, to add protection for investors and to help incubate larger private cannabis companies. Mentor Capital, Inc. recently announced that its investment in G FarmaLabs Limited has increased to USD 2,700,000 following the seventh investment tranche delivered to G Farma of USD 250,000 from Mentor for additional leased equipment and working capital. In addition to receiving consulting fees, repayment, interest, and lease payments, Mentor has captured a USD 1 option for a 3.75% equity interest in the G Farma Family of Businesses. Nicole Gonzalez, Founder of G FarmaBrands, comments, "With financial backing from Mentor Capital, G FarmaLabs has hit its benchmarks on the way to building cannabis efficient facilities and production lines," Ata Gonzalez, Co-Founder of G FarmaLabs concludes, "Chet provides both money and a wealth of knowledge. We feel blessed to have this strategic relationship."
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