Three Top Stocks for Capitalizing on the CBD Boom (ACB, CBDL, CWBHF)

Steve Hackney - July 9, 2019

The CBD market is in a clear boom right now. New research out of the Brightfield Group puts 2019 CBD product sales above $5 billion, representing a shocking 700% year/year increase. Since the passage of the US Farm Bill at the end of last year, CBD has spread to the shelves of grocery and drug stores, and even onto fast food menus. It has spread to the cosmetics space, into pet care products, into supplements, and been infused into sports drinks. And that’s just a fraction of a list that keeps growing every day.

Today, we want to take a look at a few powerful opportunities that may offer investors interesting food for thought as they look for ways to capitalize on this dramatic growth curve: Aurora Cannabis Inc (NYSE:ACB), CBD Life Sciences Inc (OTCMKTS:CBDL), and Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF).

 

Aurora Cannabis Inc (NYSE:ACB) is one of the most widely diversified players in the cannabis space due to its powerful strategic investments.

In addition, the company has demonstrated rapid organic growth and strong execution on strategic M&A, which to date includes 15 companies – MedReleaf, CanvasRX, Peloton Pharmaceutical,  Aurora Deutschland (formerly Pedanios), H2 Biopharma, Urban Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics, Anandia Labs, HotHouse Consulting, Agropro, Borela, and the pending acquisition of ICC Labs.

We would also note that the company has invested in and established strategic partnerships with a range of leading innovators, including: The Green Organic Dutchman Holdings Ltd. (TSX: TGOD), Radient Technologies Inc. (TSXV: RTI), Hempco Food and Fiber Inc. (TSXV: HEMP), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings Inc. (CSE: CHOO), Namaste Technologies Inc. (TSXV: N), Evio Beauty Group (private), Wagner Dimas (private), CTT Pharmaceuticals (OTCC: CTTH), and Alcanna Inc. (TSX: CLIQ).

However, just drilling down into its core cannabis production operations, Aurora Cannabis Enterprises Inc, trumpets itself as “one of the world’s largest and leading cannabis companies” and a licensed producer of medical cannabis pursuant to ACMPR.

Aurora took steps to build up its global hemp business last year. In addition to acquiring Agropro, the EU’s largest hemp source, the company also acquired its partner company, Borela, a large-scale processor and distributor of hemp seeds, and related products. It also recently picked up ICC Labs (last year), giving it nearly 75% market share in Uruguay in the legal cannabis space and a leadership role in South American CBD production.

Shares of ACB have been consolidating in recent action, with a pointed battle underway for control of the stock around the 200-day moving average, which is tracking with a flat slope, indicating a large-scale consolidation well in place and the potential for a resumption of directional trade on the near horizon.

 

CBD Life Sciences Inc (OTCMKTS:CBDL) bills itself as a publicly traded company having its common shares quoted on the OTC Markets under the symbol ‘CBDL’. 

The Company’s main focus is to identify, evaluate and acquire undervalued opportunities with the objective of increasing shareholder value. The acquisition of LBC Bioscience Inc. is the first in the CBD space and the company is actively searching for additional opportunities within this emerging sector. 

LBC Bioscience Inc. is a wholly owned subsidiary of CBD Life Sciences Inc. 

LBC has developed and is retailing/wholesaling a full line of cannabidiol based organic products including hemp drops, massage oils, pain relief creams, anxiety and sleep supplements, CDB edibles, anti-aging skin solutions and a full line of CBD infused supplements for your pets. LBC’s products can be viewed and purchased on the company’s website at www.lbcbioscienceinc.com. 

If you’re long this stock, then you’re liking how the stock has responded in recent action. CBDL shares have been moving higher over the past week overall, pushing about 29% to the upside on above average trading volume. Shares of the stock have powered higher over the past month as well, rallying roughly 260% in that time on strong overall action. 

Helping to drive the action, the company just announced that LBC Bioscience has finalized the development of a line of CBD-infused coffee products and is preparing for a launch in the US domestic market. According to its recent release, the product line will initially consist of four products including a weight loss coffee and a brain booster. The company also noted that these products will be available for purchase within the next three to four weeks.

 

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.

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) generated sales of $28.8M, 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 1.8% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($92.3M against $20.7M).

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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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