U.S. Cannabis Experience Holds Promise for Canada

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If Canada’s experience with legal recreational marijuana parallels what is taking place in U.S. states, we have much to anticipate in terms of entrepreneurial ferment, job creation, wealth expansion and boosted tax receipts.

Legal recreational marijuana has been the law of the land in Colorado for three and a half years, and a little more than three years in Washington. Oregon staggered its roll-out of recreational marijuana between 2015 and last year, Alaska’s and Nevada’s programs are up and running, and soon to follow are Massachusetts, Maine and the cannabis behemoth known as California.

And in Canada, we are marching towards nationwide legalization sometime next year.

Data from cannabis market research leader BDS Analytics shows that even as the pot boom enters its fourth year in Colorado and Washington, the marijuana marketplace continues to grow at a rapid pace.

Year-to-date through April of this year, cannabis sales in CO, OR and WA reached $916.13 million, which is 35 percent ahead of last year’s sales. Growth like that in established markets is simply jaw-dropping. In most industries, growth of a handful of percentage points is considered a break-out-the-champagne triumph.

While sales overall boomed, growth was especially pronounced in a few categories and we are wise to study sales trends in U.S. states to help understand what the Canadian cannabis marketplace might look like soon after joints, vape pens and brownies start being sold to recreational consumers.

The U.S. cannabis market falls into a number of categories, but the three dominant are flower (bulk cannabis sold by weight), concentrates (products like vape pens, shatter and wax) and edibles — everything from refrigerated sodas to cooking oils to slices of cherry pie.

Among the top three, flower sales dominate in all states. During the first quarter of 2017 in all channels between Colorado, Washington and Oregon, flower captured 52 percent of the broader cannabis market. Meanwhile, concentrates snagged 24 percent of the market, and edibles earned 12 percent.

Flower’s dominance is impressive, but the other categories are muscling into its domain. During Q1 2016, for example, flower owned 60 percent of the market.

The slow but steady increase of concentrates sales, at the expense of flower, rooted in Colorado, Washington and Oregon and could easily describe the Canadian marketplace once full legalization is in place. Edibles, while a strong cannabis market, has grown quite a bit in each state over the years in terms of sales, but market share between the states has tended to bounce around between 11 and 13 percent. Meanwhile, concentrates’ market share grew from 14 percent in 2014 to 18 percent in 2015, 21 percent in 2016, and 24 percent so far in 2017.

The concentrates category is growing across the board, for the most part, but the market leader is vape pens and cartridges. For the first quarter of 2017 in CO and WA, for example, vapes expanded by 86 percent percent, on sales of $44.52 million (we exclude studying growth in vapes in Oregon because the category was not for sale in recreational stores during Q1 of 2016.

Meanwhile, flower sales do continue to positively boom in states with recreational sales regimes. In Colorado, sales of flower during the first quarter of 2017 reached $178.6 million, up 20.4 percent from the same quarter in 2016 (and all of the growth came from the recreational channel, which saw sales increase by 35.5 percent, while medical fell by 4.5 percent).

In Washington State, the trend for flower is even more dramatic, up 44.5 percent during the first quarter of 2017 compared to the same quarter in 2016.

The Canada experience with recreational marijuana will hinge, in part, on the regulatory framework. Laws can have immense impact on sales trends. In Washington State, for example, the state banned THC-infused candy when recreational sales first began in June of 2014. The state eventually allowed candy, but sales of the category in the state today, at 32 percent of edibles during Q1 2017, are far behind the market share for candy in Colorado, which stands at 50 percent.

Laws do matter, especially in an industry like cannabis which is likely to experience complicated and wide-ranging regulations regardless of whether the laws are being set in California or Canada.

We are eager to continue to engage with provincial and federal officials and industry stakeholders as Canada continues its progress towards full legalization next year. Based on what has flowered in the United States, we have much to look forward to in this blossoming industry.

Invictus MD Provides an Update on Harvest by Acreage Pharms Ltd.

Posted on Categories: Investor Relations

Vancouver, BC, August 10, 2017 – INVICTUS MD STRATEGIES CORP. (“Invictus MD” or the “Company”) (TSXV: IMH; OTC: IVITF; FRA: 8IS) is pleased to announce that its wholly owned subsidiary, Acreage Pharms Ltd. (“Acreage Pharms”), a licensed producer under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”), completed its first two successful harvests earlier this month. Acreage Pharms, utilizing its pesticide free growing systems, anticipates two harvests to take place the first week of September.

Trevor Dixon, CEO of Acreage Pharms commented “The yields from both of the first two harvests exceeded expectations. The additional two harvests in the first week of September will utilize the entire grow space which will maximize yields and generate sufficient data to determine anticipated annual production rates. Acreage Pharms will be in a position to receive the license to sell once the QA team has analyzed the results of the third-party lab tests. This will be a significant milestone for Acreage Pharms.”

The initial harvests in this purpose built, state-of-the-art production facility along with the highly capable, cultivation team that uses Good Production Practices, has resulted in high quality, non-irradiated medical cannabis.

The company is also pleased to report that Phase 2, a 27,800 square foot purpose built, multiple room production facility, is well under construction with scheduled completion by the end of January 2018.  Given the production improvements realized from Phase 1, the new facility is projected to produce up to 4,200 kgs per annum. That represents a 800% increase in production over the existing production facility. The capital costs of constructing the Phase 2 production facility is within the $6 million that was initially budgeted.

Dan Kriznic, Chairman & CEO, Invictus MD commented “Invictus MD is well capitalized for expansion with approximately $28.5 million in cash and is prepared for an exciting year of growth. We have one of the industry’s most experienced teams and our focus remains on building our shareholder value with significant expansion plans as the demand for cannabis increases.”

About Invictus MD Strategies Corp.

Invictus MD Strategies Corp. is focused on two main verticals within the Canadian cannabis sector, namely the Licensed Producers under the ACMPR, being its wholly owned subsidiary Acreage Pharms and its non-wholly owned affiliate AB Laboratories Inc.; along with Fertilizer and Nutrients through its non-wholly owned subsidiary Future Harvest Development Ltd.

For more information, please visit www.invictus-md.com.

On Behalf of the Board,
Dan Kriznic
Chairman & CEO

Larry Heinzlmeir
Vice President, Marketing & Communications
604-537-8676

Cautionary Note Regarding Forward-Looking Statements: Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward Looking Information includes, but is not limited to, disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action; and the plans for completion of the Offering, expected use of proceeds and business objectives. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as “anticipates”, “expects”, “understanding”, “has agreed to” or variations of such words and phrases or statements that certain actions, events or results “would”, “occur” or “be achieved”. Although Invictus has attempted to identify important factors that could affect Invictus and may cause actual actions, events or results to differ materially from those described in Forward-Looking Information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended, including, without limitation, the risks and uncertainties related to the Offering not being completed in the event that the conditions precedent thereto are not satisfied. In making the forward-looking statements in this news release, Invictus has applied several material assumptions, including the assumptions that (1) the conditions precedent to completion of the Offering will be fulfilled so as to permit the Offering to be completed on or about June 1, 2017; (2) all necessary approvals will be obtained in a timely manner and on acceptable terms; and (3) general business and economic conditions will not change in a materially adverse manner. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, Invictus does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.