Beyond Cannabis 2.0: Yield Growth’s Perfect Timi
Post# of 254
October 17, 2019
Today is the one-year anniversary of Canada cementing itself in history as the first G20 country to legalize recreational marijuana. The first year has been a learning experience for all involved, with some companies falling by the wayside and others, like The Yield Growth Corp. (CSE: BOSS)(OTCQB: BOSQF) thriving, growing its brands while aligning for Cannabis 2.0 and 3.0.
Round 1 of cannabis legalization was all about the industry getting its legs under it, allowing sales of dried cannabis flower, oil and sprays. Cannabis 2.0, which starts today, is the sobriquet for the legalization of more cannabis products, including edibles, beverages and topicals. Looking ahead, investors are already planning for another batch of legal products, namely psychedelics.
For Yield Growth, perfect timing is a matter of understanding where the market is going.
Unrivaled Leadership
Owing to a bevy of medicinal benefits of cannabis, the legalization of marijuana put in motion the confluence of the $4.2 trillion global wellness and $11 billion legal cannabis markets. Continued relaxation of legislation and increased consumer uptake will result in the legal cannabis market surging from $11 billion in 2018 to $153.7 billion in 2027, according to analysts at Research and Markets.
In order to capitalize on the trend, Yield Growth has assembled a team of venerable experts in diversified fields spanning consumer packaged goods, pharmaceuticals, blockchain, finance, branding, legal, capital markets and more. In a clear demonstration that cannabis is transitioned from dark alleys to Wall Street, BOSS leadership is chock full of C-suite and senior management with experience at companies like Johnson & Johnson (NYSE: JNJ), Best Buy (NYSE: BBY), Skechers (NYSE: SKX), Aritzia, Hanwei Energy Services corporation (TSX: HE) and M·A·C Cosmetics (acquired by Estee Lauder (NYSE: EL)). The ability to attract this sort of talent speaks volumes to the market opportunity and the quality of Yield Growth’s vision and execution.
This group has not just spotted the trend, they have gotten firmly in front of it as evidenced by building a diversified, integrated company and the growing success of the portfolio of brands. The portfolio includes Urban Juve, Wright & Well, Jack n Jane, Flourish Mushroom Labs and UJ Beverages. The aggregate of the wholly owned subsidiary companies operating these brands gives the parent company exposure to cannabis markets in the U.S., Canada and Europe.
In fact, after premium exposure in British Vogue and Elle Canada publications, the Urban Juve Skin Awakening Anti-aging Serum is featured in the current issue of Vanity Fair UK. The company plans to launch more than 50 skincare and wellness products infused with cannabis sativa hemp root and hemp seed oil under the Urban Juve moniker.
Done Walking, Time to Run
The adage goes that you have to walk before you run. That axiom was exemplified by Canadian regulators moving slowly and vigilantly during the first year of legal marijuana operations. Cannabis 2.0 is expected to see the markets move to a slow jog and by 3.0, the markets will be running at a brisk pace.
There are plenty of tailwinds to help the acceleration. To begin with, the negative stigma attached to marijuana is fading as people get a better understanding of cannabis and hemp compounds like CBD (cannabidiol) and THC (tetrahydrocannabinol). Furthermore, consumer adoption is underpinned by people realizing the therapeutic merits of cannabis to treat everything from dry skin to anxiety to epileptic seizures. The informed public will only grow bigger going forward with Canada allowing more products to hit the market.
Yield Growth already has a growing footprint in the wellness space and is making prescient moves to solidify its future. Concurrent with the new laws in Canada, the company is aligning with Apothecary Botanicals, a Canadian licensed cannabis producer and subsidiary of Geyser Brands Inc. (TSX-V: GYSR). Per the LOI announced today, the two will work together on the production and launch of Yield Growth’s Canadian cannabis brand Jack n Jane, a line of cannabis-infused products including tinctures, topicals and capsules.
The race is on and the companies aren’t wasting any time, setting a goal to have the first products – which will include three tinctures containing THC and CBD – on the market by the end of the year.
Savvy investors will take note that one of Yield Growth’s units is UJ Beverages, which aligns perfectly with the new Canadian laws as well. The global cannabis beverage market is expected to nearly triple to rise from $1.6 billion in 2018 to $4.5 billion by 2025.
The New Age of Psychedelics
As the negative stigma of marijuana goes up in smoke, the next culture shock will be in medicinal usage of psychedelics like psilocybin (better known as the drug in “magic mushrooms”) and MDMA (better known as ecstasy). There is a growing movement and emergent research supporting the quality of these drugs to potentially provide options for people with hard to treat diseases and conditions.
For example, researchers at Johns Hopkins showed that MDMA may be effective in treating post-traumatic stress disorder (PTSD). Other research demonstrated the ability of psilocybin to help people suffering from clinical depression when other treatments have failed. Moreover, studies indicate that medicinal mushrooms can boost exercise performance, improve memory, cognitive performance and sex drive, slow tumor growth and improve heart health.
BOSS CEO Penny White and her team are in good company in anticipating robust psychedelic-therapy market. Bruce Linton, the man responsible for building Canopy Growth (NYSE: CGC)(TSX: WEED) into the first billion-dollar (and world’s biggest) cannabis company, is making strategic investments into the space and has taken a director’s seat at Toronto-based Mind Medicine. Mind Medicine is developing new treatments using psychedelics for mental illness.
To this point, Yield Growth’s subsidiary, Flourish Mushroom Labs, recently completed the acquisition of a catalogue of mushroom formulas to establish the foundation of a mushroom edibles business. The strategy is to use the formulations and know-how to create ready-to-eat packaged food products and other packaged goods that can be mixed with mushroom varietals. Potential products include soups, teas, hot cocoa, elixirs and truffles, with plans for soups and coffees to be developed first.
The decision to enter the edible mushroom business dovetails perfectly with the culture of Yield Growth to use bring ancient medicines to modern times for hard-to-treat maladies and overall wellness. It doesn’t hurt that that global edible mushroom market is growing nearly 8% annually and will reach $62 billion by 2023, according to Research and Markets, which squarely fits with BOSS management identifying lucrative markets ripe for new solutions.
https://app.quotemedia.com/quotetools/newsSto...rId=101884