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CBD infused products Canada's next major growth area

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The cannabis infused-beverage industry is set to explode into the mainstream, as shown with a mature edibles market in legalized United States. There is a huge potential for infused beers, wines and other beverages as well as health and wellness based cannabinoid infused beverages, like CBD iced teas, juices and shakes.

A recent Initial Public Offering (IPO), some high-powered hires and new Canadian regulations are putting Phivida Holdings (CSE: VIDA) on the map, both globally and domestically. Well known in both American and European markets, Phivida makes premium extracts, foods, beverages and natural health products, all infused with CBD from CBD infused hemp oil.

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The company’s story is one of perseverance and vision. Phivida’s founder John Belfontaine created the concept of a CBD infused foods and beverage company in 2013 while recovering from a life-altering injury.

“I was in car accident in 2011 and suffered severe neck and back injuries and a tremendous amount of pain,” he recalls. “Doctors insisted on prescription opiates, but I preferred to look for a natural plant-based medicine. I’d heard about medical marijuana and its effects on pain, but the psychoactive side effects of THC just weren’t right for me. I was thrilled when I discovered that CBD was found in the highest concentrations in medicinal hemp. When I tried CBD hemp oil for myself, I was amazed at the pain relief and increased mobility. It was a godsend.”

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CBD is found in both marijuana and hemp, which are derived from a common species, cannabis sativa. However, hemp contains only 0.3% or less of THC, the psychoactive component of cannabis, while rich in dozens of other cannabinoids, most notably CBD. Phivida’s full-spectrum hemp oil products contain only trace levels of THC, allowing users to experience the benefits of CBD without experiencing an altered state. Phivida adds CBD into its offering of functional foods and beverages including ice teas, juices and pure line of CBD oils.

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Belfontaine credits full-spectrum CBD hemp oil extract with lifting the burden of his pain and giving him the strength to get back on his feet.

“In the process, CBD became a lifeline for pain treatment. I read everything I could find on cannabinoid science to help others discover the incredible benefits of cannabinoids from hemp.”

The regulatory protocol for accessing CBD in Canada requires a medical marijuana license, but at the same time, the U.S. legalized hemp on a federal level, opening up Phivida to sell their functional foods and beverages.

Anecdotal reports on the effectiveness of CBD for conditions ranging from epilepsy to anxiety, pain and stress are being replaced with more rigorous science. A report on CBD released in November 2017 by the World Health Organization’s Expert Committee on Drug Dependence notes that: “CBD has been demonstrated as an effective treatment of epilepsy in several clinical trials. There is also preliminary evidence that CBD may be a useful treatment for a number of other medical conditions.” Equally important, the report dispels the idea that CBD can be addictive, stating that the product exhibits “no effects indicative of any abuse or dependence potential.”

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Phivida is now setting its sights on Canada and actively pursuing partnerships with licensed LP’s. Bill C-45, which proposes to legalize cannabis sales in Canada by mid-2018, includes an amendment to allow the category of ‘cannabinoid-infused foods and beverages’ and people are taking notice.

“We have been inundated by our interested Canadians, investors, interested distributors and retailers with a lot of excitement around our products. Unlike the U.S., Canadian hemp farmers can only legally produce seed and fibre, parts of the plant which contain little to no CBD,” Belfontaine said. “However, we can align ourselves with a licensed cannabis cultivator and distributor for CBD supply. We’re now actively pursuing partnerships with Canadian licensed producers so we can get our products in the hands of our homegrown customers.”

It’s not only the promise of building the Phivida brand in Canada that has the company feeling optimistic. Phivida launched its IPO in December 2017 — the first IPO by a pure-play U.S. CBD hemp company in Canadian capital markets. 

Phivida’s IPO was priced at $0.40 per share with a $0.75 half-share warrant. The raise had a maximum of $5.75 million, which closed extremely quickly. In the first 60 days of trading, the shares rose to a 52W high of $2.20 Phivida has since raised another $6 million in capital from exercising its options and warrants. Now fully capitalized with over $11M, Phivida is shifting from start-up to operating small cap and has attracted an all-star management team that includes former senior executives on the board from Red Bull, Procter & Gamble, the Business Development Bank of Canada and others.

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Phivida recently added CMO Michael Cornwell to its leadership group. Cornwell comes to Phivida with decades of brand experience as former CMO of Samsung, Microsoft and Red Bull. At Red Bull, Cornwell worked side-by-side with Jim Bailey, who sits on the Phivida Advisory Board, and together built the energy drink category in Canada. Bailey has recently been named the new CEO of Phivida.

“I couldn’t be more excited to join the Phivida team and help build this brand across North America,” said Bailey. “CBD is going to be the next big wave in the functional foods and beverage market industry and infused consumer products are going to be one of the most exciting growth areas to follow in this space. Already having commercialized products in the market gives us a major head start and competitive advantage.”

Phivida is now solidly staffed and fully funded to commercialize its CBD product portfolio for U.S. Pacific coast markets and is focused on building out operations and securing new partnerships that will bring some form of Phivida product to a store near you.

This story was created by Content Works, Postmedia’s commercial content division, on behalf of Phivida.

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