Recent Developments in the North American Cannabis Market

FinancialBuzz.com News Commentary

NEW YORK, February 7, 2018 /PRNewswire/ --

A report by New Frontier Data in partnership with Arcview Market Research, indicates that the legalization of cannabis in California, Massachusetts, Nevada, Florida, Arkansas and North Dakota will result in new markets that will account for $7.1 billion in sales by 2020. The data estimates that the total U.S. cannabis market will surpass $20.9 billion by 2020. By segment, the medical cannabis market was worth $4.7 billion in 2016 and is expected to grow to $13.3 billion by 2025. Recreational cannabis sales during the same period are projected to grow at a 21 percent CAGR, from $1.9 billion to $10.9 billion. Cannabis Wheaton Income Corp. (OTC: CBWTF), 22nd Century Group Inc (NYSE: XXII), Emerald Health Therapeutics, Inc. (OTC: EMHTF), MedReleaf Corp. (OTC: MEDFF), FinCanna Capital Corp. (OTC: FNNZF)

Tom Adams, Editor-in-Chief at Arcview Market Research and Principal Analyst at BDS Analytics explained: "Our data shows positive indicators across the board for the legal cannabis industry, in North America and around the globe... The passage of the 2016 ballot initiatives and continued maturation of the existing Adult-Use markets are the primary drivers of the growth this year. That's nothing compared to what we can expect in 2018 and beyond from Nevada's tourism, and California and Canada planning to launch Adult-Use sales in 2018."

Cannabis Wheaton Income Corp. (OTC: CBWTF) is also listed on the TSX Venture Exchange under the ticker symbol 'CBW'. Just announced breaking news that, "it has closed its previously announced transaction (the "Transaction") with Inner Spirit Holdings Ltd. ("Inner Spirit")."

Inner Spirit is the parent company of Spirit Leaf Inc., which aims to be a market leader in the franchising of retail cannabis dispensaries in jurisdictions in Canada where the private distribution of recreational cannabis is permitted. Inner Spirit has currently executed over 100 franchise agreements in Canada for proposed retail locations which strongly positions the specialty retailer and franchisor in preparation for recreational cannabis legalization in July 2018.

Under the terms of the Transaction, the Company acquired 15,000,000 common shares of Inner Spirit ("Inner Spirit Shares") and pursuant to a strategic alliance agreement, was granted the exclusive right to supply up to 50 percent of Inner Spirit's annual inventory requirements for any cannabis, cannabis-infused or cannabis-derived products to be sold at its retail dispensaries with a mutually agreeable profit-sharing arrangement relating to any such cannabis product sales. In exchange for the Inner Spirit Shares, the Company provided Inner Spirit with a closing cash payment of $350,000 and issued to Inner Spirit 674,418 common shares and 1,250,000 common share purchase warrants.  

Pursuant to the investment agreement entered into by the Company and Inner Spirit, the Company also exercised its pre-emptive right to acquire an additional 1,500,000 Inner Spirit Shares for $150,000 and as a result now holds approximately 15% of the total issued and outstanding common shares of Inner Spirit.

The Company would also like to congratulate Inner Spirit on the concurrent closing of the final tranche of its previously announced private placement for gross proceeds of approximately $4.5 million which Inner Spirit intends to use to build out its flagship corporate dispensary in Calgary, Alberta, develop its Spiritleaf brand, and support the rollout of its franchise partners once the private sale of recreational cannabis is permitted.

22nd Century Group Inc (NYSE: XXII) is a plant biotechnology company focused on genetic engineering and plant breeding which allows the increase or decrease of the level of nicotine in tobacco plants and the level of cannabinoids in hemp/cannabis plants. Currently, farmers cannot obtain crop insurance to protect against this risk.  22nd Century has developed a solution to this problem by creating industrial hemp plants that contain zero THC. The Company's ongoing research is product-oriented and focused on developing a range of next generation industrial hemp plants that contain optimized levels of medically important cannabinoids, such as CBD, CBC, and CBG. In collaboration with the Company's university research partners, Botanical Genetics is also working to optimize Hemp varieties for various climates around the world. THC-free cannabis is an ideal agricultural crop and an excellent source of medically important cannabinoids. 22nd Century has the exclusive rights to commercialize the plants arising from these collaborative projects in the United States.

Emerald Health Therapeutics, Inc. (OTCQX: EMHTF) operates through Emerald Health Botanicals Inc., a wholly owned subsidiary and Licensed Producer under Canada's Access to Cannabis for Medical Purposes Regulations. Through Botanicals, Emerald is authorized to produce and sell dried medical cannabis flower and medical cannabis oil. On January 30, 2018, the company and Namaste Technologies Inc. have signed a Letter of Intent ("LOI") whereby Namaste and Emerald propose to enter into a definitive agreement to collaborate on strategic business opportunities worldwide and develop a fully-integrated e-commerce platform to serve as a retail channel for Emerald's patients. Under the terms of the Proposed Agreement, the companies would leverage Namaste's existing consumer databases, site traffic and e-commerce technology for marketing purposes along with Emerald's pharmaceutical and biotech expertise to develop medical cannabis downstream products tailored to specific markets and patients. This e-commerce platform is planned to connect to Namaste's inventory management system and be compliant with Canada's Access to Cannabis for Medical Purposes ("ACMPR") regulations.

MedReleaf Corp. (OTC: MEDFF) is dedicated to innovation, operational excellence and the production of top-quality cannabis.  On February 6th, the company announced that it has received Health Canada approval for the sale of its cannabis oil softgel capsules, becoming the first licensed producer ("LP") to bring colour-coded and cannabis variety-specific softgel capsules to market and the only LP to manufacture softgel capsules from a certified ISO and GMP facility. "Orally ingested softgel capsules give prescribing physicians and patients precise dosing in a familiar and convenient medicinal form factor. These products provide access to cannabis for an under-served patient community more comfortable taking their medication in a traditional capsule rather than by oil or through vapourizers," said Robert Gora, Senior Director of Physician Outreach. "As part of MedReleaf'songoing focus on patient safety, our softgel capsules are uniquely colour-coded to allow patients to easily differentiate between the specific cultivar or type of oil product that they are consuming, letting patients more safely manage their medication."

FinCanna Capital Corp. (OTC: FNNZF) also listed on the Canadian Securities Exchange under the trading symbol 'CALI'. Yesterday the company announced breaking news that it has, "entered into a royalty agreement with Green Compliance, Inc. ("Green Compliance"). Green Compliance, headquartered in Fort Lauderdale, Florida, offers a state-of-the-art enterprise compliance and point-of-sale software solution ("ezGreen") for licensed medical cannabis dispensaries and cultivators. Green Compliance helps its customers comply with both the Health Insurance Portability and Accountability Act ("HIPAA") and State Laws by ensuring patients' confidential data is being handled properly, helping to protect from possible security breaches and financial and criminal liability resulting from potential violations.Green Compliance has commenced sales, and its target market is every licensed operating dispensary and cultivator in States which have passed laws legalizing medical cannabis - currently 29 states and Washington, D.C. Its ezGreen compliance software offers a security and HIPAA compliance strategy for dispensaries operating with valid licenses within their respective States. Most dispensaries use a seed-to-sale solution, and ezGreen has the flexibility to integrate as a plug-in with any existing seed-to-sale software or it can operate as a stand-alone point-of-sale system. FinCanna CEO, Andriyko Herchak, comments, "We are building a diversified portfolio of royalty investments in companies that have the potential to be the leaders in their respective sectors of the licensed medical cannabis industry. Green Compliance, with its deep-rooted experience in compliance software and medical cannabis industry expertise, is an ideal addition to our royalty portfolio. Green Compliance has already commenced sales, and we expect our royalties to commence in the near future, with a tremendous opportunity for growth across all 29 U.S. states and Washington D.C. which have legalized medical cannabis."

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