CannabisNewsWire
Editorial Coverage: The cannabis industry is about more than
medicine and recreational drugs. Whether selling hemp-derived
textile and construction products or providing resources to support
cannabis growers, companies are now accessing the market in a
variety of ways. Marijuana Company of America Inc. (OTC:
MCOA) (MCOA
Profile) is developing hemp-based
wellness products and cultivating industrial hemp on a large scale
in Canada and the United States. Scotts Miracle-Gro Company
(NYSE: SMG) is selling hydroponic equipment to legal
cannabis growers and has recently made a significant acquisition in
this area. Cronos Group, Inc. (TSX: CRON) (NASDAQ:
CRON) has used its success to become the first pure play
cannabis company traded on Wall Street and in Canada was uplisted
to reach the Toronto Stock Exchange. PotNetwork Holding,
Inc. (OTC: POTN) has fostered a range of subsidiaries
whose diverse products include cannabinoid wellness products. In
addition, companies such as AbbVie, Inc. (NYSE:
ABBV), which already has a cannabis-based drug on the
market, may be ahead of the game as the industry expands and
evolves moving forward.
A Diverse Industry
A lot of attention is currently on the medical and recreational
potential of the cannabis industry. The huge sums of money already
spent on the life-changing promise of medical marijuana have pushed
these areas to center stage. But while they are undoubtedly an
important part of the sector, they do not illustrate the whole
picture involving industrial hemp’s nationwide come back.
Much of the growth in the hemp industry is in subsidiary
services and other uses for the plant’s products. Hemp – a variety
of cannabis that does not contain its siblings’ intoxicating
potential – is being grown for use in food, fibers and
even building materials, all without getting anyone high.
Landlords, compost manufacturers and engineering companies are
finding ways to support and profit from the changing market. Even
research into active ingredients involving cannabinoids is shifting
away from THC, the chemical that gets marijuana users high, and
toward the potential uses of non-intoxicating cannabidiol (CBD),
which can be obtained from hemp.
The result is a varied industry in which companies can flourish
through variety instead of focusing on one sphere.
Careful Cultivation
Marijuana
Company of America (OTC: MCOA) is making the most of
this opportunity. Founded by two veterans of the cannabis industry,
MCOA is building a portfolio of partnered companies working across
the sector.
One of the company’s important assets is hempSMART™, a
wholly-owned subsidiary of MCOA. The hempSMART brand is focused on
producing and marketing wellness products including CBD derived
from hemp. The hempSMART team makes use of the cannabinoid
chemicals to provide a range of products that are useful and
appealing to consumers.
Hemp products were worth at least $688
million in 2016 and are expected to be worth $1.8 billion by
2020. Ownership of hempSMART gives MCOA a place in this
significant part of the sector, meaning that it is not dependent on
federally illegal THC-laden cannabis products to grow and sustain
its revenue streams.
As a newly emerging industry, cannabis faces a great deal of
uncertainty over sales and income potential. This uncertainty
creates investor opportunities as companies outperform
expectations. But it also creates risks due to fluctuations in
income. A cultivation
project in Washington State is providing MCOA with a buffer
against these risks.
Created as part of a joint venture with Bougainville Ventures
Inc., the cannabis cultivation and processing facility at Oroville,
Wash., covers 10,000 square feet of state-of-the-art growing space,
which will eventually be expanded to 30,000 square feet. Rather
than using the site to grow its own products, MCOA is renting out
the facility to a growing company, which is expected to begin work
there this month. The rent from the facility ensures a stable
source of income for MCOA — derived from cannabis cultivation but
not prone to its uncertainties. By providing this facility, the
company is also supporting the growth of the cannabis sector,
creating a market for such properties and for its own related
products.
Preparing for the Canadian Market
Making the most of the possibilities offered by cannabis isn’t
just about diverse products, it’s also about diverse markets. For
any company working in North America, Canada is one of the most
important markets currently and MCOA is preparing to enter that
market.
Canada is already a significant market for industrial
hemp-derived products and medicinal cannabinoids. Legislation due
to come into force later this year will legalize the extraction of
cannabinoids for all potential uses which will make Canada one of
the largest markets for legal cannabinoids in the world.
To make the most of this expected market growth, MCOA recently
entered into a joint venture with Global Hemp Group, a Canadian
company, to develop high-yield CBD hemp. Working on a
109-acre agricultural property in Scio, Oregon, the companies
will use a dual-cultivation strategy with traditional outdoor
cultivation alongside the year-round harvesting made possible by
greenhouses. Cultivation of plants has already begun, and work has
started to construct five new greenhouses to ensure substantial
year-round growing capacity.
The project team will be using data collection and analysis to
check the performance of growing techniques and to develop hemp
rich in CBD. This will help to ensure supplies of high-grade hemp
for both companies’ products.
“Our evolving project in Scio, Ore., highlights the quality of
the team in place as they continue to lean on their many years of
experience cultivating hemp,” said Donald Steinberg, the CEO of
Marijuana Company of America. “Activities such as these will help
to secure the raw oil that we will need for our hempSMART brand of
CBD infused products.”
Meeting Growing Demand
The Oregon facility is coming into play at a perfect time for
MCOA. Demand for CBD is high due to the increasing number of
manufacturers and products on the market. This is creating a
shortage of high-quality CBD.
MCOA’s new farm will provide an ample source of hemp-derived
CBD. With its tie-in to the Canadian industry, the company looks to
be in a strong position to profit from the shortage in both the
American and Canadian markets. MCOA seems to have placed itself as
the right business at the right time to make the most of a shifting
market.
With its range of facilities and partnerships, MCOA has already
developed a broad hemp-related portfolio. By incorporating elements
that are protected from market uncertainties alongside ones better
positioned to make the most of change, the company may be on track
to make the most of changes in the sector.
More Companies Target Cannabis
Plenty of other companies are also building their hopes of
tapping into the same markets as MCOA.
A growing interest in growing things means cannabis is creating
opportunities for companies already established in the agriculture
and gardening sectors. Scotts Miracle-Gro Company (NYSE:
SMG) has agreed to
acquire Sunlight Supply, the United States’ leading distributor
of hydroponics products, for $450 million in cash and stocks. The
company’s largest-ever transaction will double its sales to
cannabis growers, turning the lawn and gardening company into an
important supplier to the medical and recreational drug sectors.
Though hydroponics are used for other specialist plant-growing
purposes, legalized cannabis is a critical new part of the
market.
The increasing importance of the cannabis industry was heralded
when Cronos Group, Inc. (TSX: CRON) (NASDAQ: CRON)
became the first pure-play
cannabis company traded on Wall Street. A major grower and
seller of cannabis products, the Canadian company is set to profit
from the growth of the industry in its native country. In a further
sign of its healthy prospects, its shares in Canada were recently
upgraded from
the Toronto Venture Exchange to the Toronto Stock Exchange.
Like MCOA, it is working across North America thanks to a
cross-border venture with Los
Angeles-based MedMen.
Others are using a similar model to MCOA, investing in a range
of cannabis companies. PotNetwork Holding, Inc. (OTC:
POTN) has developed a range of subsidiaries that
contribute to an increasingly diverse industry. Its Diamond CBD,
Inc. subsidiary is reaching into the $110 billion global pet care
industry by creating CBD-based wellness products for pets.
Finally, traditional pharma AbbVie, Inc. (NYSE:
ABBV) seems to be positioning itself in the industry so it
can take advantage of potential future growth and opportunities.
The company already has a cannabis-based drug on the U.S. market.
FDA-approved Marinol helps alleviate nausea or vomiting for
chemotherapy patients, as well as helping AIDS patients who have
lost their desire to eat.
From hydroponics to pet health and beyond, hemp-based
cannabinoids are reaching into all corners of the economy and
returning corporate profits.
For more information about Marijuana Company of
America, please visit Marijuana
Company of America (OTC: MCOA).
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