FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “Canopy Rivers Announces Significant Supply Agreement Between PharmHouse and Canopy Growth.”
Canopy Rivers Inc. (TSX-V: RIV) (OTC: CNPOF) is pleased to announce that its portfolio company PharmHouse Inc. (“PharmHouse”) has entered into a second offtake agreement (the “Agreement”) with Canopy Growth Corporation (“Canopy Growth”) (TSX: WEED) (NYSE: CGC) for the purchase of cannabis from its 1.3 million square foot greenhouse facility upon licensing. The Agreement commits an additional 20% of PharmHouse’s flowering space to Canopy Growth for the next three years, in addition to the 10% that was originally committed in May 2018. The Agreement provides for the delivery to Canopy Growth of a minimum of 25,000 kg of cannabis per year and a maximum of 45,000 kg of cannabis per year.
Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers works collaboratively with Canopy Growth Corporation (TSX: WEED, NYSE: CGC) to identify strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.
In the early twentieth century, President Franklin D. Roosevelt signed the Marijuana Tax Act of 1937 which prohibited cannabis entirely. Prior to then, cannabis was primarily used as an herbal medicine to treat ailments. However, due to the biological nature of the THC or tetrahydrocannabinol compound, cannabis was deemed as a drug by prior administrations. By the early 1990s, a handful of states began to legalize cannabis for strictly medicinal purposes as California became the first state to do so back in 1996 with the approval of Proposition 215. After California’s ruling, numerous states began to follow suit and also legalized medical cannabis. Then in 2012, the cannabis industry was completely reshaped after Colorado and Washington both legalized recreational cannabis. Now, there are 33 states that have legalized medical cannabis while 10 states and the District of Columbiahave legalized recreational use as well. Following in its steps, a string of countries also began to legalize cannabis for medicinal purposes. Countries such as Argentina, Australia, Chile, Colombia, France, Germany, Spain, and South Koreahave all implemented some form of cannabis legislation. Notably, Canada became the second country ever to legalize cannabis entirely in late 2018 after Uruguay was the first country to legalize cannabis back in 2013. Despite Uruguay’searly adoption, the North American region still represents the largest global cannabis market. Specifically, U.S. states such as California, Colorado, and Washington are the primary market drivers because they collectively deliver billions of dollars in cannabis revenue every year. While cannabis is still federally illegal in the U.S., its growing advocacy and usage is causing the market to continue growing. According to Grand View Research, the global marijuana market is expected to reach USD 146.4 Billion by the end of 2025 while exhibiting a CAGR of 34.6% during the forecast period.
Currently, the medical cannabis sector accounts for the majority of the global market share. However, as the North American recreational market continues to prosper, the recreational sector is expected to overshadow its medical counterpart. Nevertheless, the medical sector is still thriving and is much more readily available around the world as most countries are not moving towards legalizing recreational cannabis because of its psychoactive properties. However, based on the economic growth on display in North America, some countries are beginning to explore opportunities for the plant. Furthermore, as clinical trials and research continue to advance, more countries will begin to consider adopting medical cannabis legislation. As of now, researchers have suggested that cannabis can effectively treat symptoms associated with medical conditions such as cancer, Alzheimer’s Parkinson’s, chronic pain, and epilepsy. Moreover, the positive data from clinical trials had resulted in the U.S. Food and Drug Administration approving its first cannabis-based drug, Epidiolex, to treat childhood epilepsy. Specifically, Epidiolex is a CBD-based drug, meaning it does not provide the consumer with psychoactive effects like its THC complement does. The FDA’s approval of Epidiolex marks a historic milestone within the industry since it is the first time a government agency has recognized cannabis as a medicine. Additionally, the growth of the CBD marketplace is expected to complement that of the THC marketplace, causing a symbiotic industry. “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, 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 (of) decades.”
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