FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “Canopy Rivers Makes US$10 Million Investment in Plant Genetics Innovator ZeaKal.”
Canopy Rivers Inc. (TSX-V: RIV) (OTC: CNPOF) and ZeaKal, Inc. are pleased to announce an investment and strategic collaboration between Canopy Rivers and ZeaKal, a California-based plant science innovator with proprietary technologies that sustainably increase photosynthesis, improve plant yield and enhance nutritional profiles for a variety of agricultural crops. The investment from Canopy Rivers marks another significant corporate milestone this calendar year for ZeaKal, following the February announcement of its R&D collaboration with Corteva Agriscience, the recently spun-out and NYSE-listed agricultural science division of DowDuPont.
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.
Canada became the second country ever to fully legalize cannabis back in late 2018, however, the country continues to struggle with meeting the exorbitant demand. Additionally, cultivators and producers are facing regulatory challenges which are hindering their operations. For example, the Canadian government has provided a very limited number of cultivation licenses and curtailed retail operating hours. Consequently, supply shortages have significantly impacted many retailers and dispensaries’ financials. Certain Canadian provinces, such as Ontario and Quebec, were ultimately forced to close down select brick-and-mortar stores due to the overwhelming demand. And while supply shortages seemed to be a major problem within the Canadian cannabis marketplace, Brock University Professor Michael Armstrong believes otherwise. The industry just became fully legal in Canada not even a year ago, meaning the industry is still heavily monitored and regulated. Even so, Armstrong said that legal production began ramping about half a year prior to Canada’s legalization. Moreover, Armstrong cites data from 2017 and highlights that production rates have actually grown year-over-year. He mentions that producers have been stockpiling supply and are continuing to grow cannabis at a faster rate. And if licensed producers can continue increasing their inventory size, Armstrong predicts that supply will catch up to the demand by the end of 2019. Furthermore, cultivators have implemented new technologies and farming methods in order to bolster their yield per harvest. The combination of increasing production rates, as well as the use of new technologies, is expected to eventually close the gap between supply and demand. According to data compiled by Verified Market Research, the global marijuana market was valued at USD 42.20 Billion in 2016. By 2025, the market is expected to reach USD 466.81 Billion while registering a CAGR of 35.3% from 2018 to 2025.
There are various methods farmers have implemented in order to obtain a higher yield each harvest. Primarily, techniques such as extending the harvest length, increasing light intensity, manipulating the plants’ growth, providing essential nutrients, and having a controlled environment can lead to higher yields. Moreover, careful trimming can also provide a better harvest. While the genetics of a strain may play a large role in the harvest, proper cultivation care can also play a significant factor. Some growers have thus taken an extra step and integrated state-of-the-art technology to help their plants grow much more richly. For example, technological entrepreneurs have developed innovative technology such as lighting and air circulation systems. These systems are designed to provide a more controlled setting as well as ample lighting and airflow to the plants. Moreover, some companies have taken a step further, also integrated artificial intelligence or smart technology to fully automate their grow houses. Furthermore, the controlled growing procedure can also produce more potent strains and controlling the environment can potentially lead to an increase in trichome development on the cannabis plant. A significant portion of the cannabinoids found in the cannabis plant is located predominantly within the trichomes. Additionally, more companies are continuing to expand upon their innovative technologies or introducing unique and modern machinery. As such, the advancements in technology are further propelling the overall cannabis industry, allowing cultivators and growers to produce top quality strains while increasing their harvest. “With over 10,000 years of history, cannabis cultivation remained quite traditional up until prohibition in the 1930s. As law enforcement became increasingly drastic, cannabis cultivation went indoor, switching from agricultural to horticultural practices. This led to efficiencies but also to a certain evolution of varietals being grown, driven by the new constrains imposed by prohibition. With legalization, we probably won’t go back in time but evolve toward new, less constrained or… otherwise constrained techniques,” said Alan Founder, Chief Executive Officer of Strainly.
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