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Adastra Holdings CEO Provides Corporate Update

Adastra is pleased to provide the Company's shareholders with a corporate update from Michael Forbes, Director and Chief Executive Officer of Adastra. (CNW Group/Adastra Holdings Ltd.)

 Adastra Holdings Ltd. (formerly Phyto Extractions Inc.) (CSE: XTRX) (Frankfurt: D2EP) ("Adastra" or the "Company"), a leader in innovative ethnobotanical and cannabis science products, is pleased to provide the Company's shareholders with a corporate update from Michael Forbes Director and Chief Executive Officer of Adastra.

"Dear Shareholders,

Over the last quarter, there have been several key developments that I'd like to share.

We have restructured Adastra's operations to be leaner and far more cost-efficient, allowing Adastra to reduce its monthly expenses by $70,000 in Q2 2021 compared to Q4 2020 whilst simultaneously increasing production output. Having done so, Adastra can now focus more on the following key growth sectors, which we anticipate will create far more value for our shareholders:

1.   Medical Extraction

We believe that medical extraction is poised to be a growing sector as big pharmacies, retailers, and various demographics use cannabis as an alternative to mainstream pain rubs, anxiety medications, sleeping aids, and pain relievers. In addition, with support from medical doctors, Adastra intends to develop topical body creams, cosmetic creams, capsules, and tinctures to address a growing international market segment.

2.   Premium Branded Extraction Products

The Company intends to release Phyto Platinum and Gold Vape Pens in the near future. Premium, full-spectrum craft biomass will be extracted using hydrocarbons to create our vape product and marketed to upmarket consumers. This is anticipated to be a popular product among those who prefer premium, full-spectrum products with cannabis-derived terpenes. We believe this move will position Adastra to take full advantage of a shift in Canadian cannabis consumer preference towards premium craft products.

3.   Flower Products

The Phyto Extractions brand is rapidly becoming a household name and enjoys shelf space in over 1,300 retailers across Canada . To leverage Phyto Extractions' brand recognition and retail footprint, we plan to offer dried cannabis targeted at the cost-conscious and the premium craft markets. This will include pre-rolls and dried flower offerings.

4.   Drug Formulation

On the production front, I am thrilled to report that Adastra has been accepted for review by Health Canada for a Dealer's Licence to possess and conduct activities with controlled substances legally. Once approved, Adastra's 13,500 sq. ft. lab will be permitted to assess and formulate MDMA, LSD, and Psilocybin into new proprietary delivery systems and formulations to address anticipated market demand.  Pending Health Canada approval, Adastra is poised to be a drug formulation and development leader in this exciting new sector.

With the recent acquisition of PerceiveMD, Adastra acquired a multidisciplinary centre for medical cannabis and psychedelic therapies, which we believe will support new regulated formulations and delivery systems for innovative treatments. We anticipate that Adastra will work alongside doctors and healthcare professionals within the regulated environment to help create superior drugs that address the actual needs of patients.

Additionally, Adastra has been busy creating new hydrocarbon-derived cannabis extract products to follow on the successful launch of Phyto Extractions Shatter into the Canadian market and to satisfy growing demand. In the coming months, we anticipate listing several new products across the country. These will include the already announced shatter pen, along with sugar waxes and crumbles. In addition, we will continue to convert legacy consumers to the regulated space by offering tested, safe, high-quality products at attractive prices.

5.   Strength of Sales

The strength of Phyto Extractions sales initiatives is beginning to pay off. Boots on the ground brand representatives from coast-to-coast have contributed to a 190% growth in revenues for the three months ended June 30, 2021 , over the same period last year. We expect sustained robustness in sales for forthcoming quarters as market share expands and new products enter the market. In July and Aug 2021 , the Company generated over $990,000 in unaudited gross revenue, bolstering our strongest sales quarter-to-date.

6.   Global Strategy

Over the coming months, Adastra intends to aggressively pursue opportunities with carefully selected partners in strategic locations around the globe. We currently have several ongoing discussions, and I look forward to announcing upon entry into binding agreements.

7.   Conclusion

As CEO, it is my responsibility to lead Adastra towards our goal of becoming a significant player in the cannabis and psychedelic space. I feel a tremendous responsibility to return maximum value to our employees, stakeholders, and shareholders, and I have been and will continue to work tirelessly towards that goal. I would like to thank the past management team for driving the Company to where it is today. Without your hard work and dedication, Adastra would not have the top-tier facility it has today.  However, to get to where we want to go, we need change. To that end, we've been busy onboarding experienced senior management and directors to manage growth properly and who are passionate about taking the Company to the next phase of our exciting journey.

As a cannabis retailer, licensed producer, pharmacist, and entrepreneur, I look forward to taking Adastra beyond Blue Skies and into even greener pastures."

About Adastra Holdings Ltd.

From its inception, Adastra has built a successful reputation as a household name in cannabis concentrates among consumers and retailers alike. Adastra Labs Inc. is an agricultural-scale cannabis extraction, distillation, and product manufacturer, located in Langley, BC . Operating out of its 13,500 sq. ft. Health Canada Licensed Standard Processing facility, Adastra, produces and distributes cannabis-derived products designed for medical cannabis and forward-looking therapeutic use.

Known for its renowned cannabis concentrate products, Adastra has now successfully taken the first steps in becoming a licensed cultivator, tester, extractor, and seller of controlled substances, including Psilocybin, Psilocin, MDMA, N, N-Dimethyltryptamine (DMT), 5-MeO-DMT, and LSD by applying for a Controlled Substances Dealer's Licence, which is under review by Health Canada.

As a leading supplier, Adastra Holdings Ltd. currently distributes its product line to 1400+ adult-use retailers and a web-based medical platform, CannMart Inc., seeking to provide consistent, quality concentrate products and alternative treatment options across the country to patients.

Connect with Adastra: Email | Website | Instagram | LinkedIn | Twitter | Facebook

ON BEHALF OF THE BOARD
ADASTRA HOLDINGS LTD. (CSE: XTRX)

Forward-Looking Information:

This news release includes forward-looking information within the meaning of Canadian securities legislation, concerning the business of the Company. Forward-looking information is based on certain key expectations and assumptions made by the management of the Company. Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Forward-looking information in this news release include: (i)   the Company's focus on the enumerated key growth sectors which the Company anticipates will create far more value for our shareholders; (ii) the belief that medical extraction is poised to be a growing sector; (iii) the intention to develop topical body creams, cosmetic creams, capsules, and tinctures; (iv) the intention to release Phyto Platinum and Gold Vape Pens in the near future and that such development will position Adastra to take full advantage of a shift in Canadian cannabis consumer preference towards premium craft products; (v) pending Health Canada approval, Adastra is poised to be a drug formulation and development leader in the drug formulation sector; (vi) the belief that the acquisition of PerceiveMD will support new regulated formulations and delivery systems for innovative treatments and that Adastra will work alongside doctors and healthcare professionals within the regulated environment to help create superior drugs that address the actual needs of patients; (vii) in the coming months, the Company anticipates listing several new Cannabis extract products across the country including shatter pens, along with sugar waxes and crumbles; and (viii)   over the coming months,   the Company   intends to aggressively pursue opportunities with carefully selected partners in strategic locations around the globe   . There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward looking information, including: (i) adverse market conditions; (ii) risks inherent in the cannabis extraction sector in general; (iii) changes in regulations surrounding the cannabis, cannabis extraction and controlled substances; (iv) inability to close announced transactions for any reason; (v) inability to obtain   a Dealer's Licence from Health Canada to legally possess and conduct activities with controlled substances;   (vi) inability to execute on the Company's stated business and growth plan; and (vii) other factors beyond the control of the Company. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.

This news release contains future-oriented financial information and financial outlook information (collectively, " FOFI ") about the Company's expected gross revenue in July and August 2021 , which is subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraphs. The actual financial results of the Company for Q3 2021 may vary from the amounts set out herein and such variation may be material. The Company and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about the Company's anticipated future business operations. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.

The Canadian Securities Exchange has not reviewed or approved of any contents of this news release.

www.adastraholdings.ca (CNW Group/Adastra Holdings Ltd.)

SOURCE Adastra Holdings Ltd.

Cision View original content to download multimedia: https://www.newswire.ca/en/releases/archive/September2021/08/c2957.html

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Australia federally legalised medicinal cannabis in 2016, and Australia's cannabis market has seen major growth since then.

Medical cannabis approvals were up by 120 percent in the first half of 2023 compared to the same period in 2022. Statista forecasts that Australian cannabis revenue will reach AU$3.73 billion in 2024 and grow at an annual rate of 3.22 percent, culminating in market volume worth AU$4.53 billion by 2029.

However, Australia’s cannabis industry is still young. Despite there being a strong case for a regulated market, which was outlined in a July 2024 report by the Penington Institute, recreational use is not legal and medical access remains limited and regulated.

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Understanding trends in the cannabis industry is paramount for investors eyeing a market with steady growth potential, but the landscape is complex as products and regulations continue to evolve.

Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

Consumption methods evolving post-legalization

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While smoking remains the dominant method of cannabis consumption, a recent report from the Centers for Disease Control and Prevention highlights the growing popularity of edibles, vaping and dabbing.

The report notes that vaping and dabbing are particularly pronounced among younger adults.

A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.


The study indicates that while the use of flower, cannabis concentrates, oil, tinctures and topicals has decreased during that time, the use of vape cartridges, edibles and beverages has increased.

Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

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However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

The 2018 Farm Bill is now set to expire on September 30, 2025.

While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

US cannabis legalization remains stalled

Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

In addition to that, new research is adding complexity to the debate.

A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

Investor takeaway

While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

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