Canada, the USA and Australia are seeing a major increase in new product launches and acquisitions in hemp food and medical marijuana in 2018, with the market heating up after Canada became the largest country with a legal, recreational marijuana marketplace on October 17, 2018, the date its Cannabis Act came into force.
Cannabis edible products and concentrates will be legal for sale in Canada approximately one year after the Cannabis Act was legislated. In the USA, 33 states have legalized medical marijuana. According to industry estimates, cannabis is a US$120 billion industry including both legal and illegal consumption.
And listed Canada producer of cannabis brands Newstrike Brands ('Newstrike') has announced that it has entered into an agreement made on 28 November with Peter and Chris Neal and their company, Neal Brothers Inc. ('Neal Brothers') to create a co-branded specialty food products company to develop, market and sell cannabis edibles. Newstrike had a market valuation of over CA$200 million in late 2018.
Neal Brothers, established for 30 years, manufactures premium snack foods that are sold in Whole Foods Market in Canada and the USA and also has a distribution business in Canada for other products that include sauces and salsas.
"We are bringing together two established brands and combining our respective strengths in a venture focused on the cannabis edibles sector. Through its distribution business, "The Neal Brothers has also discovered and built several premium brands in the Canadian retail marketplace," said Jay Wilgar, CEO of Newstrike.
"Our goal is to become the most trusted consumer-focused brand in the cannabis sector. Through our joint venture with Neal Brothers, we will engage in vast consumer insights, as well as in-house R&D to create real products that will stand the test of time in the consumer, packaged goods (CPG) space."
"We are thrilled to partner with Newstrike," said Peter Neal. "Bringing together our combined brand and product development capabilities under one roof, coupled with our respective experience in the cannabis and food sectors, creates a powerful combination."
The joint venture partners will conceive and develop edible cannabis products at Newstrike's fully-licensed Niagara operations, where an in-house research and development facility is being constructed.
As part of the deal, Newstrike will acquire a 19.9 percent minority interest in Neal Brothers, pursuant to a share purchase agreement and the joint venture agreement.
CNS Media reported in December that as a host of US states and Canada legalize, in some form, the use of medical marijuana, a number of cannabis-infused products have recently hit the market.
"Innova Market Insights data show that of the global food and beverages and supplement product launches featuring CBD in 2018 so far, the US accounts for 76 percent of launches," CNS Media said.
"The growth of cannabis and hemp products is expected to rise as they gain increasing consumer and regulatory acceptance. The health benefits associated with marijuana plant extract cannabidiol may also drive the growth."
Recent research by AT Kearny found that of over half of USA/Canada consumers surveyed, 50 percent would try recreational pot; while 62 percent of these are interested in edible food products.