About three weeks ago, Aurora Cannabis Inc (NYSE:ACB) announced its acquisition of Reliva, LLC, a leader in the sale of hemp-derived CBD products in the United States. Ever since that point, we have seen CBD stocks launch higher.
Turning points in major stock groups are often spurred by an M&A catalyst providing the preceding bear movement has reached a point of exhaustion or desperation – ie, provided it has run its natural course and purged the weak-handed bag-holders and the weak balance sheets.
We believe that point was reached for the CBD space in March and April, clearing the way for the May 19 move by ACB to launch the group back into gear because it signaled real distressed-asset values in play in a possible multi-decade “mainstreaming” structural growth trend as CBD-based products evolve from a $50 million niche market to a $50 billion dollar mainstream phenomenon, as widely anticipated by researchers and analysts.
Hence, here we are. The CBD space may well be past its cyclical bottom and a new cycle of skepticism, confidence, and euphoria lies ahead… along with potentially much higher share prices. With that in mind, here’s a brief profile of a few of the most interesting and notable names in the space: cbdMD Inc (NYSE:YCBD), CV Sciences Inc (OTCMKTS:CVSI), Gentech Holdings Inc (OTCMKTS:GTEH), Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF), and Medical Marijuana Inc (OTCMKTS:MJNA).
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.
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. Shares of the stock have powered higher over the past month, rallying roughly 74% in that time on strong overall action.
cbdMD Inc (NYSEAMERICAN:YCBD) has a strong balance sheet, with cash levels far exceeding current liabilities ($14.9M against $5.8M).
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.
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.
The stock has suffered a bit of late, with shares of CVSI taking a hit in recent action, down about -5% over the past week.
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).
Gentech Holdings Inc (OTCMKTS:GTEH) is one of the cheaper names in the space, and one of the most interesting right now, in part due to its diversification and its potential access to a sudden ballooning of its accessible distribution footprint.
The company recently launched its Secret Javas line of subscription-based premium CBD and non-CBD coffees, sourced from a top coffee grower in Brazil. It is working with a West Coast firm to deal in single-serving K-cup versions as well.
But the big news is that it is in the process of acquiring a top functional foods company with a distribution footprint of over 10,000 stores and e-commerce sales points. The end markets seem to line up well, and the company has discussed pivoting to include ready-to-drink versions of its Secret Javas CBD coffees. The combination of these ideas suggests some strong speculative potential.
Gentech Holdings Inc (OTCMKTS:GTEH), as noted, recently announced that it was acquiring all of the assets, including inventory, revenues, goodwill, intellectual property, trade secrets, and trading relationships of this Top-5 functional food brand currently sold in GNC stores, distributed by Europa Sports, and available in more than 10 countries worldwide.
We would also note that the acquisition target produced over $2.2 million in revenues in 2019.
“This acquisition has a tremendous synergistic element that enhances our current business model right now, with substantial revenues and a brand that vertically integrates perfectly in the GenTech growth model,” commented David Lovatt, CEO of GenTech (GTEH). “Since the outbreak of Covid-19, their business has done a great job of maintaining market positioning and brand momentum. Most of the business has been converted to an online model, which is driving a huge jump in Amazon and Direct to Consumer sales of their products. And we are now actively engaging our sales team in acquiring orders from physical store locations again.”
Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) recently announced that it has achieved another milestone in its continued commitment to innovation and consistency in hemp genetics.
According to its most recent release, the Company has earned U.S. utility patent U.S. 10,653,085, its second U.S. patent for hemp genetics. This patent is for ‘CW1AS1’, a new hemp variety created by company co-founder Joel Stanley and Sr. Director of Cultivation R&D Bear Reel. The patent takes Charlotte’s Web’s premier proprietary genetics to the next generation, and builds a strong wall of protection around it, and the products made from it.
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 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.
If you’re long this stock, then you’re liking how the stock has responded in recent action. CWBHF shares have been moving higher over the past week overall, pushing about 23% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 64% in that time on strong overall action.
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).
Medical Marijuana Inc (OTCMKTS:MJNA) claims to have generated sales of $16.9M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate decline of -4.5% on the top line.
In addition, the company is battling major balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($6.2M against $11M, respectively). Moreover, we see this as one to avoid like the plague as a dilution monster that massively overhypes its model and makes wild and wholly unsubstantiated claims about its financial performance without ever producing regularly audited financials or uplisting off the pink sheets despite many years of apparently “raking in millions”.
None of that makes any sense at all. As we said, avoid this stock like the plague. All of that said, even this one is up over the past month as the CBD space catches fire.
Medical Marijuana Inc (OTCMKTS:MJNA) bills itself as an investment holding company that operates in the medical marijuana and industrial hemp markets.
It engages in the research and development of cannabinoid-based pharmaceuticals; and marketing and distribution of cannabidiol hemp oil-based products. In addition, the company provides management support and services to cooperatives, collectives, health and wellness facilities, and medical clinics; and consulting and securities services to businesses and individuals in the legal cannabis industry.
Further, it focuses on the treatment of pain and other medical disorders with the application of chewing gum-based cannabis/cannabinoid medical products.
The stock has suffered a bit of late, with shares of MJNA taking a hit in recent action, down about -10% over the past week. And down about -90% over any other timeframe. We wouldn’t expect that change a great deal looking into the future.