American CBD Market Hype Increasing as Analysts Projecting US$16 Billion by 2025 March 12, 2019 - Baystreet.ca Use of cannabidiol (CBD) is on the rise, as nearly 7% of Americans have reported they’re already using CBD products. Now analysts are “conservatively” projecting the cannabis compound’s market to hit US$16 billion by 2025. Beyond the consumers, the rising CBD market’s biggest benefactors are going to be the providers of CBD products, including CROP Infrastructure Corp. (OTC:CRXPF) (CSE:CROP), Village Farms International, Inc. (NASDAQ:VFF) (TSX:VFF), Green Growth Brands Inc. (CSE:GGB) (OTC:GGBXF), Canopy Growth Corporation (NYSE:CGC) (TSX:WEED), and Tilray, Inc. (NASDAQ:TLRY). Companies involved in cultivating such as CROP Infrastructure Corp. (OTC:CRXPF) (CSE:CROP) are ramping up their operations, in the lead-up to full US federal legalization of CBD. Having recently received 2019 production and extraction licenses for its 2,115-acre Nevada hemp operation, CROP’s aim is to move towards becoming a world-class producer of CBD in time to provide for the market’s growing demand. Through a survey of 2,500 adults, investment bank Cowen found that 6.9% of respondents use CBD as a supplement. These surprise findings regarding consumer awareness of CBD, Cowen expressed it “conservatively” sees CBD growing to 10% of US adults (roughly 25 million consumers) by 2025—leaving room for a US$16 billion market opportunity. With the passing of the 2018 US Farm Bill, anticipation of a wave of new hemp-derived CBD products has been growing. However, the legality of CBD is still a bit hazy. In response to the confusion, bipartisan group of Senators and Representatives are putting increasing pressure on the US Food and Drug Administration to release and implement new rules for the non-psychoactive chemical compound found in cannabis. Upon Congress’ legalization of industrial hemp, lawmakers are getting annoyed that the FDA is taking so long to push through clarification—Which is causing confusion and costing American businesses money. However, CBD products are popping up in stores and malls across the country, leaving the impression that it’s basically legal. What’s in the air is federal guidance for CBD products which already are being consumed by nearly 7% of the adult population. Should that popularity and usage continue to grow, the supply of CBD will need to increase significantly. Which is what is underway, as companies jockey for position in the new market. NEVADA AS A NEW HEMP HUB After legalizing adult recreational cannabis in July of 2017, the state of Nevada has been one of the cannabis market’s biggest success stories. Given the judgement-free reputation regarding social norms in the state, especially on the Las Vegas strip, the rise of cannabis had to have been expected. However, it’s the growing of plants off the strip, and in the state’s sunnier and more fruitful growing terrains that is gaining focus from investors, and companies alike. Seeing an opening, and focusing attention on valuable cultivation real estate, CROP Infrastructure Corp. (OTC:CRXPF) (CSE:CROP) decided to initiate major operations in Nevada. Now through its subsidiary and tenant, CROP is erecting 50,000 square feet of greenhouses on its Nevada property. The facility will be run by CROP’s 49%-owned subsidiary Elite Ventures, and the main tenant, Hempire—which received the license as hemp handler on the property. On the property, the company recently announced that Hempire, received 2019 hemp handler, hemp nursery and hemp grower licenses covering 1,350 irrigated acres on its 2,115 acres of owned or leased CBD focused lands. A hemp handler is defined as a person who is registered by the licensing department to receive industrial hemp for processing into commodities, products or agricultural hemp seed. The licences put into motion the operation that anticipates a throughput capacity of one ton per day of raw biomass, done through its lab that will extract and produce CBD isolate on site. “With the increased size and operating range of our tenant’s licenses, CROP’s Nevada CBD operations are emerging into a truly world class operation,” said Michael York, CEO of CROP. “Our land holdings, micropropagation team, strategies, drying and extraction capabilities and supply agreements will enable us to operate from seeds to isolate to sales in 2019.” HEMP SUPPLY DEALS IN PLACE CROP has already secured a 500,000-lb annual supply agreement over three years, totaling 1.5 million lbs, with a commercial extraction technology company. As part of the deal, the partners will also develop and provide extraction equipment on site for CROP’s Nevada facility. As well, the company has already announced another Nevada CBD flower off take is to be delivered in shipments of 50,000 dry pounds on a bi-monthly basis to a processor that will in turn provide a finished product of ISO-certified CBD isolate. “The synergies and relationship between CROP and our off-take partner continue to evolve,” said CROP CEO, Michael Yorke. “We look forward to continuing to develop this new partnership into new opportunities and other territories.” CROP has plans for its own products derived from CBD isolates. Pure CBD is already being infused into beauty products, or food and beverage items. The company has announced plans to infuse its CannaDrink functional beverage with hemp-derived CBD, provided by its partners. CROP is also developing lines of CBD capsule and tinctures. Under the company’s Hempire and Tiff CBD brands, Crop will sell hemp, CBD isolate, and related products and will be utilized for the Canna Drink beverage line. "We believe in the nutritional spectrum and health benefits of both hemp and CBD so adding a consumer goods vertical is a logical progression as consumer data shows strong trends in plant-based foods and nutritional products,” said Michael Yorke. “We see it as a tremendous opportunity for CROP Infrastructure's branding & IP portfolio." OTHER LEADERS IN THE CBD MOVEMENT Village Farms International, Inc. (NASDAQ:VFF) (TSX:VFF) Greenhouse operator Village Farms recently signed a deal with Nature Crisp to launch a joint venture focusing on outdoor cultivation of hemp and extraction of CBD, which aims to have a presence across several states. The new joint venture will be 65% owned by Village Farms and 35% owned by Nature Crisp. Village Farms is also looking into growing in Texas, where it owns and operates 5.7 million sq ft of greenhouse facilities. The goal is to potentially convert the company’s greenhouses in Texas to hemp production, which would make Village Farms the largest greenhouse hemp production facility in North America. Green Growth Brands Inc. (CSE:GGB) (OTC:GGBXF) In an attempt to further introduce CBD into a mass market, Green Growth Brands announced a deal with shoe retailer DSW Inc. Under the terms of the deal, DSW will sell Green Growth’s Seventh Sense line of Botanical Therapy topical CBD products in 96 locations within the US. The Seventh Sense brand will also be growing its footprint in malls across America, through a deal signed with Simon Property Group, that will rollout kiosks and stores in 95 shopping malls, and including 108 locations. The CBD-infused products will sell between US$19-$29 per item. Canopy Growth Corporation (NYSE:CGC) (TSX:WEED) Canopy Growth is at the forefront of pushing CBD into the mainstream. The latest major announcement from the company was the signing of an endorsement deal with lifestyle guru Martha Stewart. The deal has both Stewart and Canopy teaming up to design and produce new CBD lifestyle products, starting with a line for pets, and later with plans to introduce products for their human owners. Canopy has also struck a deal with the National Hockey League (NHL) Alumni Association to team up on research of concussions and cannabinoids. Tilray, Inc. (NASDAQ:TLRY) Tilray recently made a US$314 acquisition of Manitoba Harvest, the largest hemp company in the world. Through the deal, Tilray gained access to the US CBD market, as well as traditional retail spaces, starting with a line of CBD-infused sprays, soft gel caps, and tinctures, all expected to launch later this year. Tilray also signed a US$100 million deal with Authentic Brands Group, whose portfolio includes Juicy Couture, Nine West and Jones New York, to develop and distribute cannabis products, including hemp-derived CBD items like foot creams and mints. Legal Disclaimer/Disclosure: While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our article is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment. 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