How to Get a Piece of the CBD Juggernaut (CGC, UPPR, CWBHF)

Chris Brown - March 15, 2019


With more and more folks starting to discover the wonders of CBD as a health and wellness supplement, experts are looking for astounding growth in the CBD space in terms of total sales of addressable market. That puts a bright spotlight on stocks in the space, and will likely spur some enthusiasm among investors seeking dramatic growth.

In an effort to keep you ahead of this action, we suggest three interesting names for due diligence that may offer outsized potential in this dynamic space: Canopy Growth Corp (NYSE:CGC), Upper Street Marketing Inc. (OTCMKTS:UPPR), and Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF).

Canopy Growth Corp (NYSE:CGC) engages in growing, possession, and sale of medical cannabis in Canada. Its products include dried flowers, oils and concentrates, softgel capsules, and hemps. The company has also recently moved into the roaring CBD space.

According to its own materials, the company offers its products under the Tweed, Black Label, Spectrum Cannabis, DNA Genetics, Leafs By Snoop, Bedrocan Canada, CraftGrow, and Foria brand names. It also offers its products through Tweed Main Street, a single online platform that enables registered patients to purchase medicinal cannabis from various producers across various brands.

In the company’s words, “Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time.”

This is also one of the most geographically diversified players in the cannabis space, with operations in 12 countries across five continents.

And there has been plenty of PR work here. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and through its partly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. Through partly owned subsidiary Canopy Rivers Corporation, the Company is providing resources and investment to new market entrants and building a portfolio of stable investments in the sector.

One of its most important divestitures and strategic interests is Canopy Rivers Inc., a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. The company works collaboratively with Canopy Growth to identify strategic counterparties seeking financial and/or operating support.

The company has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which the company believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.

Recent action figures into a tape that hasn’t been defined by any significant net price change for shares over the past week, with shares of CGC basically flat in that time. CGC shares have been relatively flat over the past month of action, with very little net movement during that period.

Canopy Growth Corp (NYSE:CGC) pulled in sales of $83M in its last reported quarterly financials, representing top line growth of 282.7%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($4.9B against $295.7M).

Upper Street Marketing Inc. (OTCMKTS:UPPR) is a public Oklahoma Corporation that specializes in acquisition, finance and management of hemp cultivation, extraction and CBD manufacturing in Colorado and other US States. UPPR is uniquely serving its target markets with cGMP grade cultivation and manufacturing standards.

The rapidly expanding hemp, CBD and cannabis markets in the North American and world markets is a perfect opportunity for UPPR and Growing Springs Holdings Corporation. UPPR and Growing Springs Holdings Corporation are ideally positioned to capitalize on recent regulatory changes that dramatically enhance opportunities in hemp production and CBD extraction as well as FDA concerns regarding use of CBD’s in the marketplace.

Most recently, the company’s wholly owned subsidiary, Growing Springs Holdings Corporation, announced an expansion of its collaborative agreement previously announced on January 22, 2019 with PrimaPharma, Inc., an FDA registered cGMP manufacturer of drugs.

According to the release, “this partner has agreed to establish a contract to support Upper Street Marketing Inc. and its wholly owned subsidiary, Growing Springs Holdings, Corporation (GSHC) efforts to develop fully cGMP CBD oils and isolate for commercial applications as well as research and clinical studies. Additionally, as of February 18, 2019, PrimaPharma, Inc., has agreed to process and manufacture various industrial hemp CBD isolate and CBD distillate products for UPPR and its wholly owned subsidiary, Growing Springs Holdings Corporation at the PrimaPharma, Inc., San Diego, California location.  These products include, but are not limited to, a variety of wholesale food supplement and pet supply providers seeking wholesale cGMP pharmaceutical quality products at favorable pricing.”

Shares of UPPR are doing well, up about 15% in the past week. UPPR shares have been relatively flat over the past month of action, with very little net movement during that period.

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) bills itself as a company that develops and distributes hemp-based cannabidiol (CBD) wellness products. Its products include CBD hemp oils, capsules, topicals, and pet products that feature CBD hemp oil extracts.

Charlotte’s Web Holdings, Inc. sells its products online as well as through distributors, and brick and mortar retailers.

The company was formerly known as Stanley Brothers Holdings Inc. and changed its name to Charlotte’s Web Holdings, Inc. in July 2018. The company was incorporated in 2018 and is headquartered in Boulder, Colorado.

Charlotte’s Web Holdings, Inc. is the market leader in the production and distribution of innovative hemp-based cannabidiol wellness products. Founded by the Stanley Brothers, the Company’s premium quality products start with proprietary hemp genetics that are responsibly manufactured into whole plant hemp extracts naturally containing a full spectrum of phytocannabinoids, including CBD, terpenes, flavonoids and other beneficial hemp compounds. Industrial hemp products are non-intoxicating.

Charlotte’s Web current product categories include tinctures (liquid products), capsules, topical, as well as pet products. Charlotte’s Web hemp-based whole plant extracts are sold through select distributors, brick and mortar retailers, and online through the Company’s website.

CWBHF shares are doing well, up about 17% in the past week. The stock has powered higher over the past month, rallying roughly 7% in that time on strong overall action.

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) managed to rope in revenues totaling $23.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 0%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($102.6M against $14.6M).

Chris Brown

About Me: I have a Phd in Economics Gender: Male Interests: Playing games like cricket, volleyball Favorite Music: hip hop, rock, jazz

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