Market analysts examining the cannabis industry and cannabis stocks believe we may be in store for more positive news this year. Wall Street analyst Vivien Azer, of Cowen Group, stated in a report, “The well-capitalized cannabis industry has been evolving rapidly and looks to address a far larger (market) than we had originally forecast.”
Azer continued to explain that Canada’s legalized marijuana market, which extends across 10 provinces, “is the first step” in preparing cannabis to be “a key functional ingredient” that could change several consumer product categories adding up to $500 billion. As more companies are making their way into the budding industry combined with the positive outlook surrounding the sector and marijuana, investors may continue to find opportunity in several cannabis stocks.
ParcelPal Technology Inc. (PTNYF) (PKG) announced signing a cannabis distribution agreement with Kiaro, a Vancouver based cannabis retailer. Together, ParcelPal and Kiaro will develop an optimal roadmap for the distribution of adult-use cannabis, with the goal of ultimately creating the ‘Amazon Effect’ within the cannabis industry. This marks the company’s second partnership to manage cannabis deliveries through the omnichannel platforms of Canadian retailers, previously ParcelPal announced a similar agreement with Choom Holdings (CHOOF).
President and CEO Kelly Abbott commented, “We are extremely excited to sign a distribution agreement with Kiaro and we will immediately begin planning and executing for all last mile operations. Our objective is to become the Uber of cannabis in Canada and this takes us one step closer to our goal. Cannabis delivery is expensive and often through antiquated courier services – with consumers waiting over a week to receive their items. With ParcelPal, customers will receive their cannabis products safely within an hour. Our technology enables seamless integration with any cannabis retail outlet or eCommerce platform.”
ParcelPal is a technology-driven logistics company where customers can shop at partner businesses and through the company’s technology and receive their purchase within an hour. ParcelPal currently offers on-demand delivery of merchandise from retailers, restaurants, medical marijuana dispensaries and liquor stores in Vancouver and intends to launch soon in other major Canadian cities.
Arcadia Biosciences (RKDA) recently launched a new division Arcadia Specialty Genomics, a first-of-its-kind strategic business unit to the optimization and standardization of cannabis plant content, quality, climate resiliency and yield to solely focus on the hemp market. Arcadia then was granted an Industrial Hemp Pilot Program License by Hawaii’s Department of Agriculture. allowing cultivation of industrial hemp in Hawaii for the purposes of agricultural and academic research in which the hemp and hemp products produced under the program may be commercially sold. With this license, Hawaii becomes the first state where Arcadia will begin research and cultivation of hemp, planting on ten acres of recently-leased land.
“With the explosive market growth projected in the industrial hemp and derivative markets, growers will need the very best hemp strains to meet demand, minimize waste, and ensure consistent quality. As the only company working in the cannabis industry with proven track record of improving plants and commercializing food ingredients from agricultural products using non-GM techniques, we’re ideally positioned to help hemp growers and end-users benefit from better hemp strains,” said Matt Plavan President of Arcadia Specialty Genomics.
Today, the company that the FDA has granted further approval of the ingredient for use in cat food. Arcadia’s SONOVA® GLA safflower oil is a highly concentrated source of GLA, an omega-6 fatty acid that has been used in human nutritional supplements since its approval by the FDA in 2009. Raj Ketkar, president and CEO commented, “The FDA clearance of SONOVA GLA for use in cat food is another example of our proven ability to improve crops’ nutrition and value as ingredients from concept to commercialization, as with our GoodWheat™ platform”.
HEXO Corp (HEXO) announced financial results for Q2 2019 fiscal year, the company’s first full quarter following the legalization in Canada. HEXO reported that the total gross revenue for the quarter reached $16.2 million, a 144% increase from the previous quarter. Gross adult-use revenue in the three months ended January 31, 2019, exceeded total revenues fiscal 2018 by 200%. Net loss decreased 52% compared to the same quarter in fiscal 2018, while net loss decreased 66% quarter over quarter as a result of the increased sales and 16% reduced total operating expenses.
Sebastien St-Louis, CEO and co-founder, commented, “This quarter not only saw an exponential increase in gross revenue and production, but also saw us continue to execute on our promises including reaching a construction and licensing milestone on our 1,000,000 sq. ft. greenhouse expansion and listing on the NYSE-A. Just yesterday, we announced an agreement to acquire Newstrike Brands Limited. HEXO’s future is very promising, I am looking forward to continually driving shareholder value and achieving milestones with our team”.
Earlier this week, HEXO annouced that they have entered into a definitive arrangement agreement to acquire all of Newstrike Brand’s Ltd. issued and outstanding common shares in an all-share transaction valued at approximately C$263 million. The agreement entails that Newstrike shareholders will receive 0.06332 of a HEXO common share in exchange for each Newstrike common share held.
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