The growth story around cannabinoids such as CBD is well documented over the past couple years. The key dynamic is a mainstreaming process as CBD and other cannabinoid-based products develop from a tiny niche market to a multi-billion-dollar global juggernaut.
According to Grand View Research, the global cannabidiol market was valued at USD 4.6 billion in 2018 and is expected to grow at a compound annual growth rate (CAGR) of 22.2% from 2019 to 2025. The demand for cannabidiol (CBD) for medical and wellness purposes is high due to its healing properties, which is the key factor driving the growth of the market. Moreover, growing product adoption and utilization owing to government approvals is a major factor anticipated to drive the demand for cannabidiol infused products.
However, one must also take into account the potential for other exotic cannabinoids to become serious commercial market assets. At this point, we haven’t seen the means operationalized to turn that corner for anything other than CBD and THC. But one company discussed below – Cannabis Global Inc. (OTCMKTS:MCTC) – has shown promising signs of success here, and it may license applicable technology to the others. So, this factor must be considered in forward projections.
Overall, the exotic cannabinoids may be the next chapter in this story.
Today, we take a close look at a handful of active stocks in the cannabinoid space, including: cbdMD Inc (NYSEAMERICAN:YCBD), Neptune Wellness Solutions Inc (NASDAQ:NEPT), MCTC Holdings Inc (OTCMKTS:MCTC) aka Cannabis Global Inc. (OTCMKTS:MCTC), CV Sciences Inc (OTCMKTS:CVSI), and Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF).
cbdMD Inc (NYSEAMERICAN:YCBD) recently announced its financials for the quarter ended March 31, 2020. The Company reported net sales of $9.4 million, a year-over-year quarterly increase of approximately 67%, as well as a significant shift in online sales as an overall percentage of net sales, with direct to consumer e-commerce online sales reporting 72% of overall sales, up from 67% from the prior quarter.
It was solid data set and the note was obviously a precursor of likely even more dramatic shifts to come as the coronavirus pandemic set the tone from March forward.
cbdMD Inc (NYSEAMERICAN:YCBD) promulgates itself as a company that produces and distributes various cannibidiol (CBD) products.
It owns and operates the consumer hemp-based CBD brand, cbdMD. The company’s product categories include CBD tinctures, capsules, gummies, bath bombs, topical creams, and animal treats and oils. It also offers pet related CBD products under the Paw CBD brand name.
The company distributes its products through an e-commerce Website, wholesalers, and various brick and mortar retailers in the United States.
And the stock has been acting well over recent days, up something like 19% in that time.
cbdMD Inc (NYSEAMERICAN:YCBD) generated sales of $9.4M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -7.4% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($14.9M against $5.8M).
Neptune Wellness Solutions Inc (NASDAQ:NEPT) just announced an expansion of its branded hand sanitizer product line.
According to the release, developed by Neptune Health & Wellness Innovations, in partnership with International Flavors & Fragrances (IFF), the expanded product line consists of six new scented varieties, including Garden Mint, Fresh Linen, Orange Hibiscus, Eucalyptus, Fresh Lemon & Tea Tree , and Lavender. Neptune’s products are natural, plant-based sanitizers made with a specialized blend of essential oils, aloe vera and fruit extract.
Neptune Wellness Solutions Inc (NASDAQ:NEPT) frames itself as a company that operates as a health and wellness products company. The company operates through two segments, Nutraceutical and Cannabis.
The Nutraceutical segment offers turnkey solutions, such as raw material sourcing, formulation, quality control, and quality assurance for omega-3 and hemp-derived ingredients under different delivery forms, including softgels, capsules, and liquids.
The Cannabis segment provides extraction and purification services from cannabis and hemp biomass. The company also offers formulation and manufacturing solutions for value added product forms, such as tinctures, sprays, topicals, vapor products, edibles, and beverages. It offers its products under the Forest Remedies and Ocean Remedies brand.
Neptune Wellness Solutions Inc (NASDAQ:NEPT) generated sales of $9.5M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 3.9% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($16.6M against $17.2M, respectively).
The company has a strategic collaboration with International Flavors & Fragrances Inc. to co-develop hemp-derived CBD products for the United States market.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 15% in that timeframe. NEPT shares have been relatively flat over the past month of action, with very little net movement during that period.
MCTC Holdings Inc (OTCMKTS:MCTC), now doing business as Cannabis Global, Inc. (MCTC), just announced the expansion of its Project Varin research and development effort to include Cannabinol (CBN), under the umbrella of patent pending polymeric nanoparticle and nanofiber technologies developed for Tetrahydrocannabivarin (THC-V).
As noted above, this company appears to be generally ahead of the pack in terms of developing actual resources to commercialize in the exotic cannabinoid space.
According to its release last week, the first stage of Project Varin produced high load particles of pure THC-V, allowing the Company to now move into production of commercial quantities. As part of this second phase, CBN has been added to the production protocol.
“The addition of CBN to the Project Varin production schedule is an important test of our internally developed technologies,” commented Arman Tabatabaei, CEO of the Company. “We believe the production parameters developed for THC-V will apply to CBN and other manufactured cannabinoids and we will be testing this premise on our currently scheduled manufacturing run. This will be an important test of the flexibility of our manufacturing process and if successful should allow us low cost leadership over a variety of rare cannabinoids.”
Cannabinol, the company notes, is found in trace amounts in hemp plants and is often found in aged hemp. Unlike most cannabinoids, the release goes on to say, CBN does not stem directly from cannabinol (CBN), but occurs as cannabis is exposed to air or ultraviolet light for an extended period of time.
While not as rare or as difficult to obtain as THC-V, CBN is still priced at a significant premium to more commonly found cannabinoids, such as CBD. Therefore, the production of high load polymeric nanoparticles based on the Company’s breakthrough technology solutions could yield considerable flexibility and cost savings when it comes to producing new cannabinoid-based products using CBN.
CV Sciences Inc (OTCMKTS:CVSI) bills itself as a company that operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors.
CV Sciences, Inc. has primary offices and facilities in San Diego, California and Las Vegas, Nevada.
CV Sciences Inc (OTCMKTS:CVSI) managed to rope in revenues totaling $8.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -44.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($7.6M against $12.5M, respectively).
Moreover, CV Sciences, Inc. operates as a life science company. It operates through two segments, Specialty Pharmaceuticals and Consumer Products. The company focuses on developing and commercializing prescription drugs utilizing synthetic cannabidiol (CBD) as the active pharmaceutical ingredient. Its initial drug candidate is CVSI-007 that combines CBD and nicotine for the treatment of smokeless tobacco use and addiction.
CV Sciences Inc (OTCMKTS:CVSI) also engages in the development, manufacture, marketing, and sale of consumer products containing plant-based CBD under the PlusCBD Oil name in various market sectors, including nutraceutical, beauty care, specialty foods, and vape.
CVSI has had a rough past week of trading action, with shares sinking something like -6% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -43%.
Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) has been a leader in terms of brand development in the CBD space for the past couple years. It would be interesting if the company were to start pushing for an expansion beyond CBD and into the exotic cannabinoids.
Given its strength of brand recognition and the size of its distribution footprint, it would make an interesting vehicle for mobilizing additional cannabinoid marketplace products. So, perhaps, stay tuned.
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.
The company sells its products online as well as through distributors, and brick and mortar retailers.
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 Holdings Inc (OTCMKTS:CWBHF) generated sales of $28.9M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -4.2% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($75.5M against $42.2M).
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.
In total, over the past five days, shares of the stock have dropped by roughly -5% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.