North Americans are slowly beginning to understand and welcome the benefits of hemp and cannabis. The shift has seen many companies begin to focus on how hemp and cannabis can medically benefit humans, but others are instead looking at what these products can do for pets.
While that may sound surprising, the pet industry offers huge opportunities for companies to profit. Indeed, the US pet food market alone is worth about $60 billion, and the global market is expected to reach almost $75 billion by 2017.
Hemp in particular is gaining traction in the pet industry. It’s an all-natural, grain-free, gluten-free source of omega 3 and omega 6 fatty acids, and compared to other oils, hemp oil offers the lowest level of saturated fats. Hemp also contains natural antioxidants, is very high in protein and acts as a natural anti-inflammatory agent.
With those statistics in mind, the Investing News Network decided to take a closer look at publicly traded companies developing pet products that use hemp and cannabis. Here’s a look at two of them.

Trueleafpet™ hemp chews

True Leaf Medicine International (CSE:MJ) is carving out a niche in the pet industry through its hemp-based pet chews, which are expected to hit stores across Canada in October. CEO Darcy Bomford has extensive knowledge of the pet nutrition industry, and worked in it for nearly 30 years prior to moving into the cannabis industry.
“From the very beginning I thought there was an opportunity for cannabis as a medicine for pets, so I always wanted to do that,” Bomford explained. “I know the pet industry inside and out, I know people all over the world. We had basically every distributor in North America sell my Darford product line, so I have got a really good base of contacts and knowledge in manufacturing and marketing. It was a pretty good fit.”
As mentioned, the company is about to launch its line of Trueleafpet™ hemp chews for pets and has already secured Canada-wide distribution.
“We will be launching at the end of the month and we will be shipping sometime in October. We signed up two big distributors, one that covers all of Western Canada and another that covers all of Eastern Canada, so that is where we are starting. In the US, we are doing a soft launch in LA this week at an international cannabis show. It’s basically just =a sneak peek of the product line and the packaging, and we will be doing a hard launch in the US in the spring,” he said.


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“We have three products — one is called True Love, which is an antioxidant; True Spirit is a joint support product for dogs that are getting older and are having a tough time moving around; True Calm is a calming product, so it has a blend of calming herbs like passionflower, lemon balm.”
Moving forward, the company hopes to develop a hemp-based CBD supplement pet food that has some pilot trial research behind it for anti-inflammatory purposes.

Pawsitive FX™

Taking a different route, Naturally Splendid Enterprises (TSXV:NSP) has developed a pet product line that works as a topical treatment formulated to keep dogs’ noses and paws healthy.
“Happy Snouts™ is our soothing, moisturizing balm for a dog’s nose. It is packed with omega-rich ingredients and essential oils that are renowned for their abilities to treat dry skin issues, while still keeping a neutral odor so as not to overwhelm the dog’s olfactory senses,” explained Naturally Splendid’s brand manager, Andy Birchall. “Happy Paws™ is formulated for the pads on the paws. It moisturizes and nourishes the skin and uses similar nutritious and anti-bacterial ingredients. Strong Paws™ acts as your dog’s shield against the elements and terrain. Smoothed onto the paws before going for a walk, this wax soaks into the skin and offers protection from heat, cold, salt, dust and moisture while still providing nutrition and helping repair damaged skin.”
The three products are currently being sold in pet stores across Western Canada and will be taken into the US following a successful presentation of the product line at the SuperZoo trade show in Las Vegas.
“The SuperZoo show was a great opportunity to present the product line to US distributors and to meet with some of our key US partners. As a result of those discussions we have identified several potential private-label opportunities, and we believe we are close to entering into a very promising distribution relationship in the US. Additionally, we are reviewing opportunities with large retail pet store chains,” Birchall said.
Moving forward, Naturally Splendid is looking at moving into the pet food industry and is currently conducting studies that involve formulating a dog food that uses HempOmega™ as an ingredient.
“The first phase of the study was to confirm HempOmega™ will survive the manufacturing process used for pet food, ” explained Naturally Splendid CEO Craig Goodwin. “Additional studies will track the positive effects resulting from feeding HempOmega™ to dogs in a controlled study. We will continue with the study to collect data and interpret the effect feeding HempOmega™ had on the dogs.”
“All domesticated pets can benefit from omega fatty acid supplementation. As in humans, omega fatty acids promote immunity strength, cardiovascular health, healthy skin and hair, growth and development and joint function for our pets,” he added.
 
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Naturally Splendid Enterprises is a client of the Investing News Network. This article is not paid-for content.

Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis market update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.

 

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Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the US federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, working in the lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now undergoing a return to form as excitement about the US opening up increases.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes in US cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.

“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”

 

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As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed for the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be.

 

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While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance. In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadian companies waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent future positivity for already thriving operations.

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 Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States will release its first quarter 2021 financial results on Thursday, May 13, 2021 before markets open. Following the earnings release, management will host a conference call at 8:30 AM Eastern Time to review the financial results.

All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

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Appointment of Dr. Kelmendi, Assistant Professor of Psychiatry at Yale University and co-founder of the Yale Psychedelic Science Group, brings another experienced medical professional to Lobe’s advisory team.

 Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce the appointment of Benjamin Kelmendi, MD, Assistant Professor of Psychiatry at Yale University School of Medicine, to its Scientific Advisory Board.

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Ayurcann Holdings Corp. ( CSE: AYUR ) (the “ Company ” or ” Ayurcann “), a Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, is pleased to unveil further details of its Phase 2 expansion plans.

Ayurcann has commenced trading on the Canadian Securities Exchange (” CSE “) on April 8, 2021 and subsequently announced a private placement of up to $500,000 (” Financing “), as per the Company’s press release dated April 12, 2021. The proceeds of the Financing are intended to be used to further pursue Phase 2 of the expansion of the production capacity of the Company’s Pickering facility.

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