Weekly News in Cannabis - March 29thHemp and CBD are in high demand, can cultivators keep up? If not, are yeast-created cannabinoids the answer? Meanwhile, digital payments also seeing a boost from the cannabis sector and three cannabis stocks are heating up.
Hemp Farmers Face Difficulties Meeting Global CBD Demand
CBD is now everyone’s favorite cannabinoid. By 2025, Cowen Group estimates sales of CBD products to reach at least $16 billion.
Such high demand for CBD has placed a strain on many American farmers. To satiate the public’s desire for this calming compound, many farms have been cutting corners to meet their quotas.
Not only is hemp challenging to produce, but it’s also impossible for farmers to reliably tell how much CBD to THC content will be in the finished product. Currently, the US government only allows farmers to grow hemp with 0.3 percent THC or lower.
Although companies like Arcadia Biosciences are working on ways to produce more stable hemp crops, this research is still only in its initial stages. There’s also no FDA-approved standard to check the quality of CBD before many of these products hit store shelves.
As demand continues to rise for CBD, however, both farmers and government officials will have to tackle how to regulate this hot industry.
USC Develops Unique Yeast Able to Produce Cannabinoids
A research team at the University of California has just discovered a revolutionary method of producing high-quality cannabinoids from yeast. By feeding brewer’s yeast a certain amount of sugar, scientists were able to create the exact same cannabinoids present in the cannabis plant.
In addition to the popular CBD and THC, scientists say they were able to create many rare cannabinoids that are nearly impossible to extract from hemp. The USC team believes this new method could dramatically cut costs for both researchers and general consumers.
In their report, study authors claim this method could pose a significant challenge to the growing cannabis industry. Not only is it cheaper to produce brewer’s yeast, but it’s also easier to extract more cannabinoids than from the cannabis plant.
Cannabis Helps Fuel Digital Payment Sector
Since marijuana remains a Schedule I drug under US federal law most banks are hesitant to work with American cannabis companies. Interestingly, this legal grey area has helped spur tremendous growth in the digital payment sector.
Dozens of digital payment companies are now working to address the unique financial challenges in the cannabis space. Instead of sending their physical tax dollars via armored cars, these new technologies offer cannabis companies convenient and secure ways to track their expenses and make their necessary payments.
IgnitePro by Spark Digital Technologies is just one of many new digital platforms specifically designed to help cannabis companies organize their documents and track global transports. Since the company Blockstrain Technology Corp. recently acquired Spark, IgnitePro will soon have more advanced blockchain-encrypted software.
Another major player in this growing field is Global Payout Inc., which owns MTrac Tech Corp. Indeed, MTrac is such a big deal in the space that execs from the company will speak at New Jersey’s Cannabis Insider conference on April 3rd.
What goes on at this conference could have an impact on how lawmakers vote on the SAFE Act. If this act passes into law, it will allow banks to work with cannabis companies so long as they meet each state’s cannabis laws.
Seedo Will Operate New AI Indoor Farm in Israel
Executives at the US-based Seedo Corp. recently said they would bring their AI-enabled indoor farm technology to Northern Israel’s Kibbutz Dan. Many investors believe this will dramatically improve Seedo’s standing in the cannabis industry.
Estimates from the company suggest these climate-controlled, pesticide-free containers will be able to grow about 14 tons of dried cannabis buds in 36 months. If Speedo meets these estimates, it could earn $24 million from its new Israeli venture.
All of Seedo’s containers have been designed to provide cannabis plants with ideal growing conditions regardless of the environment. These AI-enabled containers were also created to reduce the need for pesticides and other harmful chemicals in the cannabis growing industry.
Seedo is currently listed on the OTC Markets under the ticker SEDO.
Three Cannabis Stocks Hot on Wall Street
The growing cannabis industry has swiftly become one of Wall Street’s “greenest” sectors. Although some of these stocks have soared over 100 percent, many investors believe the cannabis sector has great potential for continued growth.
Since recreational cannabis is legal throughout all of Canada, cannabis companies in the Great White North don’t face the same federal pressures as in the USA. For this reason, most of the stocks outperforming on the American stock market have their headquarters in Canada.
The most prominent of these Canadian players is Canopy Growth Corp. (CGC). Canopy was the first cannabis stock to trade publicly in North America and went from roughly $15 per share at the end of 2017 to $51 per share in September of 2018.
A significant reason for Canopy’s sudden growth has to do with a partnership it reached with alcoholic beverage manufacturer Constellation Brands. Although Canopy’s valuation may be high at this stage, most people consider this company the leading manufacturer in this new industry.
Another slightly safer play in the cannabis stock market is Cronos Group (CRON). Like Canopy, Cronos’ stock surged after announcing a major partnership. In Cronos’s case, however, the company made a deal with tobacco giant, Altria Group.
One Canadian company that’s also gained a great deal of attention recently is Aurora Cannabis (ACB). While Aurora doesn’t have the financial backing Cronos and Canopy enjoy, it now has the guidance of famed investor Nelson Peltz. In the past, Aurora has also reportedly been in talks with Coca-Cola.