California Governor Signs Historic Bill to Legalize Smokable Hemp and CBD Edibles

7.1 min readPublished On: October 20th, 2021By

NEW YORK – Nearly four years after legalizing recreational marijuana, California has finally opened the path to make smokable hemp and CBD-infused foods and beverages legal. Governor Gavin Newson signed the bill earlier this month to legalize the sale of consumables derived from hemp, creating a regulatory framework for the manufacture and sale of hemp products like smokable hemp, and hemp-infused foods. This new bill is welcome for many companies in the hemp industry, which has remained unregulated since the federal legalization of hemp and CBD. While companies are still waiting for California lawmakers to establish a tax scheme for hemp and hemp derivatives, they are allowed to sell their products in other states. Meanwhile, companies like Sundial Growers Inc. (NASDAQ:SNDL), Tilray Inc. (NASDAQ:TLRY), Organigram Holdings, Inc. (TSX:OGI) (NASDAQ:OGI), and HEXO Corp (NASDAQ:HEXO) are ramping up their production, distribution and marketing efforts, and Sixth Wave Innovations Inc. (OTCQB:SIXWF) (CSE:SIXW) is positioned to help them tie their efforts towards better yields.

The new legislation lays the groundwork for the manufacture of high-quality hemp products creating a significant opportunity for Sixth Wave Innovations Inc. (OTCQB:SIXWF) (CSE:SIXW), the company behind the Affinity™ system. Affinity™ is a cannabinoid purification system, which isolates specific cannabinoids from crude cannabis oil.

The company recently announced the shipment of the Affinity™ system from the contract manufacturer, Advanced Extraction Systems Inc. (AESI). AESI completed the wet testing for the system before shipping it to Sixth Wave for the final configuration. Once configured, Sixth Wave will deliver the system to Green Envy Extracts.

The system, once delivered, will be subject to a commissioning/optimization process. The Affinity system has a production capacity of 6kg of high purity distillate, every ten hours. Sixth Wave Innovations Inc. also plans to deliver a larger system in December. The system will be capable of about 14kg/10 hours or more than 30kg/day.

“Launching this small system provides Sixth Wave with a fast track to ensuring that every major design component is operating as expected and improvements are incorporated into the delivery of larger production units. The smaller system will be used to service new clients and support the company’s quality improvement program. As an example, the company is ready to finalize the SOPs for processing high CBD hemp extracts and can already meet Canadian regulatory requirements for reduced THC levels. This includes promising data to indicate that THC compliant products for the USA are possible as well,” said John Cowan, COO of Sixth Wave.

The collaboration between Sixth Wave and Green Envy is positioned to bring technical and commercial benefits for the two companies. The companies have plans to introduce the system in Michigan, Massachusetts, Oregon, and additional locations.

Sundial Growers Inc. (NASDAQ:SNDL) is looking to enhance its exposure in the cannabis industry with the acquisition of Alcanna Inc., which holds about 63% equity assets in the pure cannabis play, Nova Cannabis Inc. Through this acquisition, Sundial Growers will have strengthened its position as a cannabis industry partner with access to more than 170 of Nova’s locations in Canada. The acquisition will also give Alcanna shareholders exposure to the cannabis industry while supplementing Sundial’s Spiritleaf retail operations.

Tilray Inc. (NASDAQ:TLRY) reported the tenth consecutive quarter of positive adjusted EBITDA. The leader in the global cannabis packaged lifestyle and consumer group saw a 43% increase in its net revenue for Q1 2022 to $169 million from $117 million in Q1 2021. The company also maintained in #1 market share in Canada with five of its brands ranking top five across adult-use products. During the quarter, Tilray acquired MedMen, a US cannabis retailer, and launched a new medical cannabis brand in Canada.

Organigram Holdings, Inc. (TSX:OGI) (NASDAQ:OGI) launched an extension of its popular SHRED portfolio with the SHRED’ems bold-flavored cannabis-infused gummies. SHRED’ems is Organigram’s first product from The Edibles & Infusions Corporation, which Organigram acquired in April. The gummies have captured a leading market share since their launch in August. The company expects SHRED’ems to become a popular choice in the market. The vegan-friendly gummies come in Wild Berry Blaze, Sour Cherry Punch, and Sour Megamelon flavors.

HEXO Corp (NASDAQ:HEXO) and Molson Coors Beverage Company announced the expansion of its line of hemp-derived CBD beverage Veryvell. Following this expansion, Veryvell will be available in 17 states including AlaskaArkansasColoradoConnecticutFloridaIowaKentuckyNew JerseyNew MexicoNew YorkOhioOklahomaOregonTexasVermontVirginia, and West Virginia. Veryvell’s hemp-derived CBD beverages and beverage drops will be available online and in select stores in Colorado.

As the cannabis industry gains momentum thanks to increasing legalization and adoption, companies like Sixth Wave Innovations have a first-mover advantage in this growing market.

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