Favorable Regulatory Changes Embolden the CBD Market’s Expansion

The CBD, or cannabidiol, segment is one of the fastest-growing within the cannabis industry. Overall, the CBD market has accelerated at a tremendous pace as various studies have debunked the common misconceptions swirling around the compound. CBD is now known to offer therapeutic effects just like tetrahydrocannabinol, or THC, however, it is the non-psychoactive derivative of cannabis. CBD is also legally available within the U.S. as long as it contains 0.3% or less THC, making it very accessible for consumers. And due to its current status under federal law, CBD is expected to be the more explosive market compared to its counterparts. Back in 2018, the U.S. Food and Drug Administration decided to delist CBD as a Schedule 1 drug. Shortly after, the U.S. House passed the Farm Bill, allowing for the cultivation of hemp, which CBD is primarily derived from. In 2017, the hemp-derived CBD product segment delivered USD 190 Million in sales, accounting for 23% of the overall market. Furthermore, the hemp food segment, which delivered USD 137 Million in sales, accounted for 17% of the hemp market in the same year. Now, the food segment is expected to reach USD 212 Million by 2022 as the segment continues to see major investments, primarily by large beverage corporations looking to enter into the cannabis-infused beverage industry. And according to data compiled by QY Research, the global cannabidiol market is expected to increase from USD 303 Million in 2018 to USD 2.28 Billion by 2025 while registering a CAGR of 33.5%. American Premium Water Corporation (OTC: HIPH), United Cannabis Corporation (OTC: CNAB), Emerald Health Therapeutics, Inc. (OTC: EMHTF), Nightfood, Inc. (OTC: NGTF), MariMed Inc. (OTC: MRMD)

Various CBD products have gained a favorable reputation among health-conscious consumers, as full-spectrum CBD oils provide consumers with protein, fiber, and essential fatty acids, according to Dixie Botanicals. Moreover, the oil can also be added to other products such as tinctures, topicals, capsules or beverages. Overall, full-spectrum oil also contains all 20 amino acids, including the nine essential amino acids that the human body processes on its own. In particular, the CBD edible and beverage segment is quickly gaining traction because consumers are ingesting products simply for relaxation. “On one hand, yes, it’s really surprising to see this young industry be at such huge numbers so quickly—and still kind of pulling itself together—and on the other side, I don’t think it’s a surprise at all, because it’s about time,” said Lex Pelger, Science Director at Bluebird Botanicals, said in an interview with Cannabis Dispensary. “With such a long human history of cannabis being an important plant, it makes sense that this is just exploding back onto the public consciousness like it does every couple decades.”

American Premium Water Corporation (OTC: HIPH) today announced breaking news that, “it has closed the transaction with a definitive agreement to acquire domestic distribution rights for Q4 Sports (www.q4sports.com) for a one year period that can be extended upon the consent of the Company and Q4. The agreement was first announced in December 2019. The agreement also provides for a one year exclusive worldwide headwear licensing rights for the Company’s Gents division.

“I am thrilled to announce the completion of the distribution agreement with Q4 Sports,” said American Premium Water Corporation CEO, Ryan Fishoff. “This transaction with Q4 is a milestone event for the Company. I expect this transaction will add significant revenue through expanded distribution points, which is one of the Company’s key initiatives in 2020. This deal allows the Company to explore various cross selling opportunities based on the platform Q4 has built, which provides for global reach and aligns with our Company initiative to expand our footprint internationally. We believe the sky is the limit with potential joint distribution deals. I think this will be a huge opportunity for the Gents subsidiary, and should open many new doors for all facets of the business. Today, the Company takes another step forward reaching demographics and potential customers that have not been targeted by CBD companies, and I am excited to begin cross-promoting these new customers and target bases.”

“I expect now that the Company has closed this transaction, shareholders will see many benefits that should increase shareholder value. First and foremost, this deal is expected to have a positive effect on the Company’s 2020 numbers; this distribution agreement, when combined with our current operations and strategic relationships, could result in over $1 million of revenues of in 2020. As I’ve stated, I anticipate that this distribution deal opens many new doors for the Company to sell products, and gives us the opportunity to do many cross-promotions and joint marketing campaigns. I am also a big believer in diversification; I come from a background in private equity and I have seen first-hand the benefits of a diversified offering of products and brands. I feel that offering a diversified product offering in global markets distinguishes the Company from its peers, and should create additional shareholder value. I look forward to providing updates to the investment community on how this transaction will align with the Company’s goals for 2020 in the coming weeks and months.”

About American Premium Water Corp.: American Premium Water (OTC: HIPH) is a diversified luxury consumer products company focused on businesses in the health and beauty and biotech sectors. The company is focused on harnessing the powers of Nano technologies paired without cannabidiol (“CBD”) to treat health disorders and enhance quality of life. The Company’s portfolio includes the LALPINA Hydro and LALPINA CBD brands (www.lalpinahydrocbd.com), Gents (www.gentsco.com), Vanexxe (www.vanexxe.com) and plant + body essentials (www.plantbodyessentials.com). American Premium Water strives in providing only the highest quality hemp CBD sources for its products, with quality control being one of our first and foremost focuses. The Company aims for this standard not only for compliance reasons, but also to provide our customers the highest quality product possible.”

United Cannabis Corporation (OTCQB: CNAB) announced last December that it has received a Notice of Allowance from the United States Patent and Trademark Office (“USPTO”) for its application for a new patent that claims methods of using and preparing cannabinoid formulations.  The allowed application will mature into an issued patent once the issue fee is paid to the USPTO. The allowed application is a divisional of the application that was previously allowed by the USPTO and which matured into the Company’s US Patent No. 9,730,911 (the “‘911 Patent”).  The ‘911 Patent was issued on August 15, 2017.  Jesús Vázquez, Vice President and General Counsel of the Company and who was recently named as one of the “50 Most Influential People in IP 2019: Industry Leaders” by the publication “Managing Intellectual Property,” commented: “The new patent will compliment and will have the same priority date as our ‘911 Patent.  It will be a valuable addition to the Company’s patent portfolio.”

Emerald Health Therapeutics, Inc. (OTCQX: EMHTF) announced last December, that it has entered into a multi-year agreement (the “Agreement”) with Valens GroWorks Corp. to contract cannabis extraction and white-label product development services. Under the Agreement, which has a 4-year term, Emerald will supply Valens with a minimum of 10,000 kg of cannabis and hemp biomass annually for processing on a fee for service basis into premium quality resins and distillates using Valens’ leading proprietary extraction and processing methods. Valens will also provide white label services including formulation, mixing and filling for product formats such as vaporizers, softgels and tinctures. Emerald expects to make its first shipment to Valens in Q1 of 2020. Valens currently holds all required licensing from Health Canada to carry out its obligations under the Agreement. “We are excited to partner with Emerald to provide our extraction and white label expertise to bolster their supply chain,” said Tyler Robson, CEO of Valens GroWorks. “Emerald is focused on an incredibly important medical cannabis patient program for individuals in need across Canada. We look forward to working closely with the team at Emerald as they scale their operations and expand their product portfolio for years to come.”

NightFood Holdings, Inc. (OTCQB: NGTF) revealed earlier last year that the Company is exploring CBD ice cream products, as well as adding additional flavors of the current Nightfood ice cream line, and plant-based non-dairy frozen dessert options.  The timeline for release of any CBD products will depend on FDA regulation, but the additional flavors and non-dairy options are expected to be available later this year. NightFood Holdings owns Nightfood, Inc. and MJ Munchies, Inc, which was formed in 2018 as a new, wholly owned subsidiary of Nightfood Holdings, Inc. to capitalize on legally compliant opportunities in the CBD and marijuana edibles and related spaces.  The Company intends to market some of these new products under the brand name “Half-Baked”, for which they’ve successfully secured trademark rights.

MariMed Inc. (OTCQX: MRMD) a leading multi-state cannabis and hemp operator focused on health and wellness, announced last month, that their Illinois dispensaries in Anna and Harrisburg saw a significant uptick in sales on the first day under new laws to legalize recreational use of cannabis throughout the state. MariMed’s dispensaries in Anna and Harrisburg, which operate under the Thrive brand, saw customers waiting outside for hours before opening. MariMed worked hard prior to January 1st to prepare for expected demand by recreational users while ensuring valued medical customers would still receive the attention, service and access to products that they have come to expect.  It was positive to see demand appearing to be as high in rural areas as in the more concentrated and competitive urban areas of the state.  MariMed CEO, Bob Fireman, noted that, “We are excited to see the response by the people of Illinois to the new law. Gorgi and his team led by Rosie Naumovski, worked diligently servicing our medical patients while preparing for the recreational launch in our two dispensaries.  They are in the process of developing two additional adult use dispensaries in Illinois allowed under our licenses.  They have been valuable advocates for the Illinois cannabis programs from their inception providing guidance to both state and local authorities. We are proud to have them as part of the MariMed team. With our consolidation on track, MariMed’s revenue from these licensed businesses will now be included in our financial results in 2020 which in turn, will generate greater long-term value for our shareholders.”

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