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Reacting to Rising Demand, CV Sciences Aims for 500+ Acres of Hemp CBD Production

CV Sciences CVSI

With the 2018 U.S. Farm Bill unshackling hemp from its cousin cannabis and making hemp legal from coast-to-coast, farmers across the country began positioning for what was already explosive industry growth. According Vote Hemp, 78,176 acres of licensed industrial hemp were grown last year, an eight-fold increase from the advocacy group’s first crop report in 2016.

While nearly identical in appearance to marijuana, hemp is clearly differentiated in that it contains no (<0.3%) tetrahydrocannabinol, or THC, the intoxicating component of cannabis that is responsible for the psychotropic high.  Hemp does, however, contain cannabidiol, or CBD, and other non-psychoactive cannabinoids found in cannabis believed to have strong medicinal properties.

CBD demand is driving hemp farmers to expand their harvests.  Part of that demand is coming from hemp-derived CBD products company CV Sciences (OTCQB: CVSI), who on Wednesday said it is actively sourcing domestic hemp as part of an initiative for more than 500 acres of U.S.-based hemp production in 2019.

As part of this initiative, the company has penned supply agreements with hemp farmers in Wisconsin, Illinois, Indiana and Kentucky.

More Retailers Stocking PlusCBD Oil

CV Sciences is widening distribution channels for its PlusCBD™ Oil, which is comprised of a full line of products and flavors, including sprays, drops, balms, capsules, and softgels. All the hemp harvested for CV Sciences is processed through a chemical-free, CO2 extraction process at the company’s production facility in San Diego, California.

Underlying forces at the heart of the upsurge in demand for PlusCBD™ products are new distribution deals into nearly 950 Kroger (NYSE: KR) stores, spanning a variety of monikers like the eponymous grocery chain, Dillons, Fred Meyer and others across 17 states.  CVS (NYSE: CVS) is also now putting PlusCBD™ Oil Extra Strength Balm on its shelves.

All told, CV Sciences branded products are now in almost 4,600 retail stores as of June 12, 2019.  That was up from about 3,300 locations two months earlier.

Taking a corporate and a macro view, CVSI CEO Joseph Dowling commented in this morning’s news release, “We believe establishing and building the U.S. hemp industry will ensure a global supply chain of the highest quality hemp, while also driving job creation and economic development for rural communities – a primary goal of the 2018 Farm Bill.”

Shares of CVSI are trading ahead 1.2% Wednesday morning at $4.12.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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