One investment theme that captured the market’s imagination over the past decade but has been out of favor over recent years and thus might be due for some level of resurrection with potentially profound implications is CBD.
Research firms expect the CBD industry to grow significantly in the coming years. According to a report by Grand View Research, the global CBD market is expected to reach $22 billion by 2025. This growth is being driven by a number of factors, including the increasing legalization of CBD in countries around the world, the growing body of research on the potential health benefits of CBD, and the rising consumer demand for natural and alternative products.
Some of the research firms that have made predictions about the growth of the CBD industry include:
- Grand View Research logoLogoVectorSeek.ComGrand View Research: Grand View Research projects that the global CBD market will reach $22 billion by 2025.
- BCC Research logoEmory Libraries – Emory UniversityBCC Research: BCC Research projects that the global CBD market will reach $28 billion by 2023.
- MarketsandMarkets logoLogovtor.ComMarketsandMarkets: MarketsandMarkets projects that the global CBD market will reach $25.2 billion by 2026.
These predictions suggest that the CBD industry is poised for significant growth in the coming years. This growth will create opportunities for businesses that are able to develop and market CBD products.
Factors driving that growth include:
- Increasing legalization of CBD: The legalization of CBD in countries around the world is one of the biggest drivers of growth in the CBD industry. As more countries legalize CBD, the market will expand, and more consumers will have access to CBD products.
- Growing body of research on the potential health benefits of CBD: The growing body of research on the potential health benefits of CBD is also driving growth in the CBD industry. Studies have shown that CBD may be effective in treating a variety of conditions, including pain, anxiety, and inflammation. As more research is conducted, the potential health benefits of CBD will become more widely known, which will lead to increased demand for CBD products.
- Rising consumer demand for natural and alternative products: The rising consumer demand for natural and alternative products is also driving growth in the CBD industry. Many consumers are looking for ways to improve their health and well-being without using prescription drugs. CBD is seen as a natural and safe alternative to prescription drugs, which is driving demand for CBD products.
The CBD industry is still in its early stages of development, but it has the potential to be a major growth investment opportunity in the coming years.
With that in mind, we take a look below at some of the most interesting stocks in the CBD space.
SNDL Inc. (Nasdaq:SNDL) is a licensed producer that crafts small-batch cannabis using state-of-the-art indoor facilities. It operates through the following segments: Liquor Retail, Cannabis Retail, Cannabis Operations, Investments, and Corporate.
The Liquor Retail segment consists of wines, beers, and spirits through owned liquor stores. The Cannabis Retail segment comprises of the private sale of adult-use cannabis through owned and franchise retail cannabis stores. The Cannabis Operations covers the cultivation, distribution and sale of cannabis for the adult-use and medical markets domestically and for export. The Investments segment includes the deployment of capital to investment opportunities.
SNDL Inc. (Nasdaq:SNDL) recently reported its financial and operational results for the first quarter ended March 31, 2023. All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated. The results for the first quarter of 2023 include the operating results of The Valens Company Inc. (“Valens”) subsequent to the acquisition on January 17, 2023, and the results for the first quarter of 2022 include one day of Alcanna Inc. (“Alcanna”) operations subsequent to the acquisition closing on March 31, 2022.
“We are pleased to report progress towards key milestones in all of our operative segments against the backdrop of expected seasonally moderate sales in our retail networks,” said Zach George, Chief Executive Officer of SNDL. “The integration of Valens is proceeding with pace, and we are actively identifying new revenue streams and cost reduction opportunities. The first quarter was impacted by a number of one-time items including $13.5 million to replenish liquor inventory following the seasonal holiday draw in the fourth quarter of 2022, $2.7 million in severance and restructuring costs, and $17.5 million to stabilize Valens and bring overdue accounts payable up to date. We expect additional restructuring charges to impact the second quarter and the results of our team’s hard work to become clear in late 2023. We are focused on improving all aspects of our business with the objective of generating strong free cash flow. The relocation of all cannabis processing activities to our Kelowna complex will drive improved capacity utilization, and we are aggressively reducing our exposure to higher-cost cultivation as we seek low-cost producer status in all relevant product categories. In our retail segments, we are carving a path to higher margins and are excited about the recent launch of our data service programs and the potential for improved consumer engagement through new e-commerce and loyalty capabilities. We look forward to updating investors on our intended dividend of Nova shares, and events related to our SunStream portfolio in the coming weeks. 2023 is shaping up to be another transformational year for our company.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 3% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 25% in that time on strong overall action.
SNDL Inc. (Nasdaq:SNDL) managed to rope in revenues totaling $149.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 977.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($197M against $74.4M).
Institute of Biomedical Research (OTCMKTS:MRES) is now doing business as M2Bio Sciences, a bioceutical company focused on alternative plant-based cannabinoids and mental health therapeutic research.
The company is focused on alternative plant-based cannabinoids and psilocybin medical research that develops and commercializes a range of CBD and mushrooms-based products under Dr. AnnaRx™, Medspresso™, and Liviana™ brands. In addition, the company’s research and clinical trials with psilocybin are aimed at new therapies that will help patients who suffer from alcohol addiction, mental illness, and cardiovascular diseases. In the big picture, its mission is to advance botanical-based medicine to the forefront by deploying best-practice science and medicine, clinical research, and emerging technologies.
M2Bio Sciences most recently announced that it will be attending the Plant Powered Show in Cape Town this year. Fast becoming one of the most successful food and lifestyle events on the South African exhibition calendar, the Plant Powered Show is the premier event of its kind in Africa and is aimed at the burgeoning plant-powered, flexitarian and conscious-living consumers who are looking for ideas, inspiration, information, advice and sustainable products to support their lifestyle. The Plant Powered Show is also aimed at people who are invested in plant-based products or lifestyles, looking to find new markets and opportunities and meet new and emerging producers.
“I am delighted that we will be showcasing our premium, consciously crafted products at this year’s Plant Powered Show. All of our products are organic and ethically sourced, and we are excited for guests to taste our scrumptious range of Liviana CBD infused Extra Virgin Olive Oils and our Liviana Raw Honey. We will also be serving our award winning Medspresso CBD infused Tanzanian Peaberry Coffee” – Michael Sachar, CEO of Food and Beverage, M2Bio Sciences.
This year’s Plant Powered Show features top chefs and food personalities presenting inspiring cooking demos, health and wellness experts, premium and interactive experiences, exclusive industry networking and a bustling marketplace of plant-based food, drink and lifestyle products to test, sample and buy including our premium CBD-infused olive oils, raw honeys and coffee and tea selections as our consumer brands Liviana and Medspresso will be making their debut.
Institute of Biomedical Research (OTCMKTS:MRES) CEO Mr. Sachar added: “The recent increase in demand for our products has been extraordinary. Our Liviana and Medspresso products have been listed in many SPAR stores in the Western Cape, which shows us that the market for healthy, nutritious CBD infused food and beverages is growing exponentially.”
It is estimated that more than 15 000 consumers and trade professionals will attend this year’s show, interacting with over 200 exhibitors.
cbdMD Inc (NYSEAMERICAN:YCBD) engages in the business of operating cannabidiol brands such as Paw cannabidiol and cbdMD botanicals. Its product categories include CBD tinctures, gummies, topical, and bath bombs.
The company is one of the leading and most highly trusted and most recognized cannabidiol (CBD) brands with a comprehensive line of U.S. produced, THC-free CBD products as well as new Full Spectrum products. Its cbdMD brand currently includes high-grade, premium CBD products including CBD tinctures, CBD gummies, CBD topicals, CBD capsules, CBD bath bombs, CBD sleep aids and CBD drink mixes and an array of Farm Act compliant Delta 9 products.
cbdMD Inc (NYSEAMERICAN:YCBD) recently announced fiscal Q2 2023 results. For the second quarter of fiscal 2023, GAAP Net Loss improved to $1.4 million on sales of $6.2 million as compared to a $5.0 million Net Loss on sales of $9.6 million in the prior year comparative quarter. Year over year saw significant improvements in SG&A costs.
“While we still have more work left to do, we are excited about the progress we made during the second fiscal quarter. This is one of the best operating results we have had since the Company acquired the cbdMD brand. We are incredibly proud of our team’s efforts during the quarter to stabilize our revenue sequentially, while we reduced SG&A expenses by an annualized $24 million year over year. We continue to take steps to improve our business and continue to lay the groundwork during the third quarter that will have an increasing positive impact on the business during the balance of the calendar year,” says Ronan Kennedy, cbdMD’s Interim CEO and CFO.
The stock has suffered a bit of late, with shares of YCBD taking a hit in recent action, down about -4% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -57%.
cbdMD Inc (NYSEAMERICAN:YCBD) managed to rope in revenues totaling $6.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -35.2%, 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 ($1.7M against $4.7M, respectively).
Other key players in the CBD space include Jazz Pharmaceuticals PLC (Nasdaq:JAZZ), Cronos Group Inc. (Nasdaq:CRON), Village Farms International Inc. (Nasdaq:VFF), HEXO Corp. (Nasdaq:HEXO), and Tilray Brands Inc. (Nasdaq:TLRY).
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