FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “TruTrace Technologies enters into Strategic Working Relationship with Strainprint Technologies.”
TruTrace Technologies Inc. (TSX-V: TTT) (OTC: BKKSF) announced that it has entered into a letter of intent dated April 30, 2019 (the “LOI”) with Strainprint™ Technologies Ltd. (“Strainprint”). Under the terms of the LOI, the parties will work together to explore development and integration opportunities to utilize their mutual technologies in order to bring greater transparency and visibility to the legal cannabis industry.
TruTrace Technologies has developed the first integrated blockchain platform to register and track intellectual property in the cannabis industry. TruTrace’s technology allows cannabis growers and breeders to identify and secure rights to their intellectual property. It also streamlines the administrative process and reduces the costs of genetic and mandatory quality-control testing for legal cannabis. TruTrace’s technology is proprietary, immutable and cryptographically secure, thereby establishing a single-source, accurate, validated and permanent account for cannabis strains from ownership to market.
The widespread proliferation of cannabis legalization has led to the emergence of several multi-billion dollar cannabis corporations. Previously, cannabis was viewed as a taboo drug because of its psychoactive nature. However, many countries around the world are now beginning to acknowledge the medical benefits associated with the plant. For instance, the U.S. Food and Drug Administration approved the first-ever cannabis-based drug, Epidiolex, last year to treat childhood epilepsy. Moreover, a cluster of other countries have also realized the benefits of cannabis and have since moved to adopt medicinal legislation of their own. The rapid growth of the industry has even led a handful of companies to list on the New York Stock Exchange and the Nasdaq Stock Exchange, the two largest exchanges in the world. After a string of companies listed on these two major New York exchanges, investment firms began to take note of the cannabis market’s potential. Now, investment banks such as Piper Jaffray, RBC Capitals, and Cowen have all backed the industry by covering publicly traded cannabis-based companies. Moreover, Bank of America Merrill Lynch recently initiated its coverage on the overall cannabis industry as well. Overall, the growth within the industry, as well as investments from other public and private sectors, have been appealing to analysts. Especially as investments from industries such as the tobacco and beverage sectors further highlight that the cannabis marketplace is expected to become a thriving industry. According to data compiled by Mordor Intelligence, the global cannabis market was valued at USD 7.7 Billion in 2016 and is expected to reach USD 65 Billion by 2023. Additionally, the market is expected to grow at a robust CAGR of 37% throughout the forecast period from 2019 to 2024.
Merrill Lynch analyst Chris Carey predicts that two major events could lead to a shift within the cannabis industry: Canada reaching marijuana oversupply by 2021 and the U.S.’s ongoing legalization efforts, according to Marijuana Business Daily. Canada has recently had problems meeting the immense demand for cannabis after legalizing the plant entirely last year. Bill Blair, Canada’s Minister in charge of marijuana, noted some provinces have work to do in order to establish their wholesale and retail distribution systems. The slowed retail sales are also primarily due to some provinces limiting their retailers’ hours or halting licenses altogether. For instance, Ontario blamed its severe shortage on its limited retail expansion. On the other hand, the U.S. has had a different approach to the recreational market. Oregonand Colorado were the first states to legalize recreational use, however, the two states differ heavily from the Canadian marketplace as Oregon had issues with oversupply, while Colorado maintained a well-balanced market. The current state of the U.S. market has also led a series of Canadian companies to enter into the U.S. market space. However, their strategies rely heavily on the U.S.’s decision on whether or not to legalize cannabis on a federal level. “Importantly, whether legalization occurs or not, we think the prospect of legalization, an event which could lift U.S. asset prices, prompts Canadian companies to accelerate U.S. strategies, and see some announcing deals in the U.S. before legalization,” Carey’s report mentioned.
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