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Investments in the Legal Cannabis Industry Set to Grow as R&D Ramps Up

C.RWB, LBUY, V.AME

FinancialBuzz.com News Commentary

PR Newswire

NEW YORK, August 15, 2018 /PRNewswire/ --

According to recent report published by Research and Markets, the North American legal cannabis market value is expected to reach approximately USD 35 Billion by 2023 while expanding at a CAGR of 27.1%. The North American legal cannabis market has already crossed the USD 8 Billion mark in terms of value in 2017. The research also indicates that cannabis is gaining prominence in North America due to the increasing acceptance of products for both recreational and medical uses. As a result of continued legalization and evidence of demand, investments have poured into research and development, which in turn leads to innovation. Tidal Royalty Corp. (OTC: TDRYF), Leafbuyer Technologies Inc. (OTC: LBUY), Emblem Corp. (OTC: EMMBF), VIVO Cannabis Inc. (OTC: ABCFF), PotNetwork Holdings Inc. (OTC: POTN)

Canada had recently passed a nationwide legalization of recreational cannabis usage, following Uruguay to become the second country to do so. According to CBC, Canada is one of only two countries, besides the Netherlands, that exports cannabis products, which allows companies in Canada to gain instant revenue from recent medical cannabis legalizations in more than 20 countries. CBC reported that the "offerings in today's Canada medical marijuana market differ little from those used recreationally - the smokable plant and, more recently, oil extracts. More than 70 companies have licenses from the federal drug regulator, Health Canada, to cultivate, produce and sell medical marijuana, with more than half those licenses granted in 2017 or 2018."

Tidal Royalty Corp. (OTC: TDRYF) is also listed on the Toronto Stock Exchange Venture under the ticker (CSE: RLTY.U). Just earlier this morning, the company announced breaking cannabis news that, "a leading provider of royalty financing to licensed U.S. cannabis operators, is pleased to announce that on August 1, 2018 it has entered into a Letter of Intent ("LOI") with an established licensed operator in Illinois (the "Illinois Cannabis Company") to finance the expansion of the Illinois Cannabis Company's operations and strategic acquisitions.

The Illinois Cannabis Company LOI - The Illinois Cannabis Company is led by a seasoned management team with years of cannabis industry experience. The Illinois Cannabis Company currently operates a state-of-the-art 75,000 sq. ft. facility that uses highly-advanced plant monitoring technologies to precisely track plant inputs and other critical control factors in order to achieve optimal production yield and consistency. The Illinois Cannabis Company will use proceeds from the financing to expand their existing cultivation and manufacturing facility, as well as pursue acquisition of additional strategic assets that will increase market share.

Pursuant to the LOI, Tidal Royalty will provide the Illinois Cannabis Company with up to US$41MM, in the form of both a royalty financing and equity investment. The royalty financing and equity investment will be staged over specific milestones set by Tidal Royalty management:

  • Royalty Investment: Tidal Royalty will receive a 15% net sales royalty on all the Illinois Cannabis Company's Illinois operations. This includes both net sales generated from existing cultivation and dispensary sales, as well as incremental sales generated by the planned expansion.
  • Equity Investment: Tidal Royalty will purchase the Illinois Cannabis Company's common shares at an agreed-upon valuation.

"As Tidal Royalty looks forward to where the U.S. cannabis market is headed, we are excited to broaden our investment strategy," said Paul Rosen, CEO & Chairman of Tidal Royalty. "We are very excited to count the Illinois Cannabis Company among our portfolio constituents. Between the near-term cash flow generated by their existing operations, management's vision and drive to grow their market share, and the ability to accelerate their growth with Tidal Royalty capital, we feel this is going to be the beginning of a great long-term relationship between our companies."

Illinois is the sixth most populous state in the United States with nearly 13MM residents. According to Marijuana Business Daily, the state's medical market is expected to grow to US$150MM by the end of 2018 with significant opportunity for upside as the market develops. The LOI includes an exclusivity period during which the Illinois Cannabis Company will not negotiate with any other party. It further provides Tidal Royalty with a right of first refusal on any future financing with respect to the Illinois Cannabis Company or any of its affiliates. Closing of the transaction contemplated by the LOI is subject to, among other things, the satisfactory completion of Tidal Royalty's diligence investigation, which is currently underway. Tidal Royalty expects to announce further details in respect to the contemplated transaction with the Illinois Cannabis Company upon the execution of a definitive agreement between the parties and the receipt of all necessary regulatory approvals.

With the execution of this LOI, Tidal Royalty has now entered into letters of intent for expansion projects in California, Nevada, Massachusetts and Illinois. In addition, Tidal Royalty is in the process of evaluating multiple additional opportunities across the U.S., including in Florida, New York, Arizona, Ohio and Michigan. Tidal Royalty intends to provide further information on those discussions when the parties reach an agreement and execute respective letters of intent.

About Tidal Royalty - Tidal Royalty provides royalty financing to the U.S. regulated cannabis industry. Led by an executive team with extensive industry experience in Canada and the U.S., Tidal Royalty provides operators with the funding they need to grow their business. Operators benefit from non-dilutive capital and investors get top-line access to a diversified portfolio of companies that will form the future of this transformative industry."

Leafbuyer Technologies Inc. (OTCQB: LBUY) is one of the most comprehensive online sources for cannabis deals and information. The Company recently announced its plans to provide a suite of services to Surterra Wellness. With eight locations in Florida, Surterra Wellness is one of the leading dispensary chains in the Sunshine State. Founded in 2014, Surterra Wellness has eight dispensary locations and two distribution centers in Florida and Texas. The company also provides statewide delivery services in Florida. "Surterra strongly supports every Floridian's ability to pursue the safest, highest quality cannabis treatments to enable them to live well," states Jay Blaskovich, of Surturra. "Our mission to connect qualifying patients to one of Surterra's Wellness Centers - or to place an order for statewide delivery - will be made easier through our partnership with the Leafbuyer network and the considerable digital reach they will offer us."

Emblem Corp. (OTCQB: EMMBF) is a fully integrated licensed producer and distributor of medical cannabis and cannabis derivatives in Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR). The Company, along with GreenSpace Brands, recently announced a strategic partnership to develop and commercialize cannabidiol infused health and beauty products for the expected adult-use cannabis market. This groundbreaking partnership unites a highly-regarded consumer packaged goods company with one of Canada's most trusted licensed producers of medical cannabis. The partnership will leverage GreenSpace's expertise in consumer brand development and distribution to launch products infused with Emblem's CBD extracts across a number of verticals including beauty, health and wellness, supplements, food and beverage. Each approved product will indicate it is "Powered by Emblem" to signify Emblem's involvement. Expansion into edibles and consumables using cannabis CBD extracts will move forward when these additional products are permitted under applicable regulations, expected in 2019. Any CBD products will be produced and marketed in accordance with applicable Canadian laws and regulations.

VIVO Cannabis Inc. (OTCQB: ABCFF) is recognized for trusted, high-quality products and services. The Company recently announced that it will be known as VIVO Cannabis Inc. - a contemporary reflection of the Company's evolution, purpose and direction. The name change will be effective at market open on Tuesday, August 7th, 2018 and "VIVO" will replace "ABCN" as the Company's ticker symbol on the TSX Venture Exchange. VIVO - which translates to "living" in Latin - embodies the Company's commitment to providing quality cannabis products and services that improve lives. It's the common thread that unites all, and it's the spirit behind the rebranding. It also celebrates the recent announcement of the Company's proposed acquisition of Canna Farms Limited. With the emergence of the Canadian adult-use market, continued focus on the medical cannabis segment and a growing global opportunity - coupled with a healthy balance sheet showing USD 110 Million in cash - VIVO is well-positioned for success. VIVO is a collection of premium brands targeting unique customer segments and needs. Under the overall corporate umbrella of VIVO Cannabis Inc. (vivocannabis.com), the Company's portfolio includes the following brands: Beacon Medical; Fireside Cannabis; Lumina Wellness; Harvest Medicine. "VIVO is committed to making the most out of life. Our company tagline - 'living life' - demonstrates our dedication to meeting the needs of our customers in Canada and internationally with cannabis-based products, both in the medical and adult-use markets," says Barry Fishman, Chief Executive Officer of VIVO Cannabis.

PotNetwork Holdings Inc. (OTC: POTN) is a publicly traded company that acts as a holding company for its subsidiaries, First Capital Venture Co., the owner of Diamond CBD Inc., the maker of Diamond CBD oils. PotNetwork recently announced that its wholly owned subsidiary, Diamond CBD Inc., successfully displayed the Company's full product line including its newest products at the 56th ASD Market Week trade show at the Las Vegas Convention Center, July 29-August 1st, gaining over 400 new orders in the 3 days of the show. Diamond CBD focuses on the research, development, and multinational marketing of premium hemp extracts that contain a broad range of cannabinoids and natural hemp derivatives. Diamond CBD's team consists of hemp industry pioneers and natural product experts, chemists, doctors and scientists, dedicated to producing the finest and purest cannabidiol (CBD) oils. Historically, trade shows, such as the ASD Market Week shows, have been highly successful events for Diamond CBD generating both valuable publicity and record sales. With products in all 50 states, and a growing international brand awareness, Diamond CBD is a growing industry leader with proprietary premium products that contain a broad range of cannabinoids, natural hemp derivatives and hemp extracts.

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