Companies Eye to Make the Most of the CBD Market’s Rapid Growth Spurt

Over the past year, cannabidiol-based (CBD) products have rapidly emerged due to widespread legalization efforts. Specifically, in regions such as the U.S. and Canada, consumers have flocked to retailers to buy CBD products such as topicals, beverages, tinctures, and patches. Notably, major retail corporations such as Amazon, Walgreens, and CVS have all decided to sell CBD products in-store as well as on their online platforms. Overall, the rapid acceleration of the market is attributable to the passage of the U.S. Farm Bill in late 2018, which legalized the commercialization of hemp-derived products. Shortly after, retailers throughout the nation began to stock up on CBD products as consumers became increasingly curious. At the market’s inception, most consumers generally had little to no knowledge about CBD, except for the fact that it was derived from the cannabis plant. As a result, most people associated CBD with psychotropic effects similar to its THC counterpart. However, researchers noted that CBD is the exact opposite of THC and instead provides soothing and therapeutic effects without the head high associated with marijuana. Now, while CBD is becoming increasingly popular among consumers, it has also become more and more difficult for newer players to compete within the market space. Typically, pre-established players such as large corporations with excess marketing budgets or reputable dispensaries tend to dominate the marketplace. Consequently, the utilization of social media as well as other marketing techniques have been key for smaller players to stand out against the competition. According to data compiled by Acumen Research and Consulting, the global cannabidiol market is projected to reach USD 22 Billion by 2026 while exhibiting a CAGR of 33% over the forecast period from 2019 to 2026. Newleaf Brands Inc. (OTC: NLBIF) (CSE: NLB), The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) (TSX: TGOD), Emerald Health Therapeutics Inc. (OTC: EMHTF) (TSX-V: EMH), Harvest One Cannabis Inc. (OTC: HRVOF) (TSX-V: HVT), Marijuana Company of America, Inc. (OTC: MCOA)

Marketing within the cannabis industry poses many regulatory challenges as the industry remains in a legal gray area in many regions. For instance, in the U.S., cannabis is illegal at a federal level, however, states have the jurisdiction to legalize cannabis or not. And despite the large number of states that have moved to legalize cannabis, many broadcasting stations or social media platforms strictly prohibit advertisements related to cannabis. Large advertisement platforms such as Facebook and Google prohibit ads related to drugs; and under federal law, cannabis is still a controlled substance. However, Facebook recently allowed advertisers to run ads for topical hemp, but the ads cannot depict specific features of the product and other CBD products are also not allowed. While advertisers cannot promote CBD products, the authorization of topical hemp hints that social media platforms may be loosening regulations. On the other hand, while some states allow advertising, they prohibit advertisements in places where minors may be exposed or in large public areas. Nonetheless, despite the restrictions, cannabis-related operators can still promote their brands through other means of advertisement. Notably, many companies have decided to promote themselves as a lifestyle brand and strive to educate consumers instead of directly marketing products. Moreover, third-party services have developed their own platforms in efforts to help push CBD retailers into mainstream markets. And while the CBD market is continuing to progress each year, it is important for cannabis-based operators to comply with regulations set at both the state and federal levels. “Despite the risks, if you come at social media with a responsible approach with quality content driven by a desire to drive non-social media engagements as well, your cannabis company may just tame the Wild West of the social media and cannabis,” said Andre Bourque, Vice President of Business Development for Verdantis Advisors.

Newleaf Brands Inc. (OTC: NLBIF) (CSE: NLB) is also listed on the Canadian Securities Exchange under the ticker (CSE: NLB). Earlier this week, the Company and its wholly owned subsidiaries, We Are Kured, LLC (“Kured”) and ReLyfe Brand, LLC (“ReLyfe”) announced that, “the Company has entered into an agreement (the “Agreement”) with Herbfluence, Inc. (“Herbfluence”). Under the terms of the Agreement, Herbfluence has selected two of the Company’s CBD branded products to be included in the initial launch of the Herbfluence marketing platform on Monday, October 28, 2019. Herbfluence is an influencer marketplace for the Cannabis Industry. It is a smarter, simpler approach to advertising cannabis brands through social media influencers.

Tyler Knight, Founder and CEO of Herbfluence states, ‘Having worked in the cannabis industry as a Marketing Executive for over six years, I have experienced numerous problems marketing cannabis and CBD companies online. Our team developed a streamlined online platform that truly allows CBD, cannabis and ancillary companies to seamlessly find, connect, and communicate directly with social influencers in our industry. The platform will prove to successfully advertise brands online to their desired target market and will receive full analytical data on the marketing campaigns, without the barriers caused by typical digital advertising platforms. As a firm believer in NewLeaf Brands’ CBD products, we are confident that we can provide an advertising service through our social influencers that will greatly increase product sales and brand awareness for NewLeaf Brands as a leader in the CBD industry.’

As many social media platforms restrict paid cannabis and CBD advertising, Herbfluence has developed a marketing platform where the cannabis and CBD brands can communicate with social media influencers to negotiate online promotions. Herbfluence currently has hundreds of social media influencers, whom have over 20,000,000+ followers on Instagram online.

‘After meeting Tyler Knight, I immediately wanted to get our CBD brands involved. I have been in the cannabis and CBD industry for over seven years now, and I know how hard it is to market CBD and cannabis brands online. The Herbfluence platform is truly an industry game-changer, and I couldn’t be more excited about the opportunity to work with Tyler and the Herbfluence team,’ said Benjamin Martch, CMO of NewLeaf Brands.

ABOUT NewLeaf Brands: NewLeaf Brands, Inc. is an innovative Cannabidiol (“CBD”) lifestyle Company. Through the Company’s wholly-owned subsidiaries We are Kured, LLC, Drink Fresh Water, LLC, ReLyfe Brand, LLC and TeaLief Brand, LLC the Company’s main business activities encompass the development, marketing, and distribution of CBD products (including vaporizer pens/cartridges, hot/cold tea, softgel capsules and beverages) throughout North AmericaSouth America, and Europe. In addition, NewLeaf Brands, Inc. has extensive retail and cultivation land investments in Oregon, USA.”

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The Green Organic Dutchman Holdings Ltd. (OTCQX: TGODF) (TSX: TGOD) is a publicly traded, premium global organic cannabis company, with operations focused on medical cannabis markets in CanadaEurope, the Caribbean and Latin America, as well as the Canadian adult-use market. The Green Organic Dutchman Holdings Ltd. recently announced that following its launch in Ontario at the end of August, which marked the Company’s entrance into Canada’s recreational market, initial demand has exceeded expectations. TGOD’s high-THC signature strain, Unite Organic, is performing well online and at dispensaries, triggering a second order from the OCS earlier than initially anticipated. “We are thrilled to witness such strong sales and positive feedback from retailers and consumers across Ontario, Canada’s most populous province at 14.32 million people. We can see from the initial response that demand for high-quality flower is strong,” commented Brian Athaide, Chief Executive Officer of TGOD. “Our team is working hard to ramp up production of our premium organic products as we get ready to expand distribution with additional strains and product forms as well as to other provinces in the months ahead.  With our Hamilton hybrid greenhouse completed, and a second one nearing completion in Valleyfield, we are on track to distribute nationally early next year.”

Emerald Health Therapeutics Inc. (OTCQX: EMHTF) (TSX-V: EMH) is a Canadian licensed producer of cannabis products focused on differentiated, value-added product development for medical and adult-use customers supported by novel intellectual property, large-scale cultivation, extraction, and softgel encapsulation, as well as unique marketing and distribution channels. Emerald Health Therapeutics, Inc. recently fulfilled its first shipment of premium cannabis products to the Nova Scotia Liquor Corporation (NSLC) for the adult-use market. This first shipment consisted of Emerald’s high potency SYNC 25 CBD oil and White Rhino cannabis flower, two of Emerald’s best-selling products in other markets. “We are pleased to have the opportunity to serve customers in Nova Scotia,” said Riaz Bandali, Chief Executive Officer of Emerald. “The NSLC was looking for popular cannabis products to broaden their offering. Our quality products provide the attributes they were looking for and having access to this new market further expands Emerald’s distribution and adult-use consumer reach.”

Harvest One Cannabis Inc. (OTCQX: HRVOF) (TSX-V: HVT) is a global cannabis company that develops and provides innovative health, wellness, and selfcare products to consumers and patients in regulated markets around the world. Harvest One Cannabis Inc. recently received a cultivation license from Health Canada for Phase I of its new Mission Road facility. The license allows United Greeneries to immediately begin to cultivate cannabis in the new Mission Road facility located adjacent to the existing facility on Vancouver Island in the town of Duncan, British Columbia. Once fully completed, the Mission Road facility will triple the production capacity in Duncan and increase operational efficiency. “The issuing of this new licence from Health Canada represents another key accomplishment for Harvest One as we continue to execute on our projects and plans to be a leading producer of premium indoor-grown cannabis,” said Grant Froese, Chief Executive Officer of Harvest One. “With our unique genetics and small batch production under the watchful eye of our first in class cultivation team, we continue to produce top tier cannabis for our discerning consumers.”

Marijuana Company of America, Inc. (OTCQB: MCOA) is a corporation that participates in product research and development of legal hemp-based consumer products under the brand name “hempSMART™” that targets general health and well-being and an affiliate marketing program to promote and sell its legal hemp-based consumer products containing CBD. Marijuana Company of America, Inc. recently announced that the Company’s wholly owned subsidiary, hempSMART™, Inc., has entered into a CBD beverage product supply agreement with MCTC Holdings, Inc. hempSMART™ will market MCTC’s powdered drink mixes and other CBD edibles online and via hempSMART’s network marketing partners. The products, which are branded under the trademarks: Hemp You Can Feel™, will be based on the MCTC’s patent pending cannabinoid infusion technologies that offer high bioavailability of cannabinoids. Mr. Trevor Muehlfelder, Chief Operating Officer of hempSMART™ commented, “Over the past few quarters we have gained traction with our products here in the U.S. and in our new European markets.  These new products, which are based on unique and highly bioactive infusion technologies, fit well within our product line. We are looking forward to rolling out these products across our marketing channels.”

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