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Will CBD Become Robinhood’s Next Focus? (YCBD, NEPT, MCTC, ACB, MJNA)

All the signs are there. The long-awaited rise of the millennials as important factors in the stock market is finally upon us. In the 1990’s, it was the Baby Boomers who were finally enchanted by the ticker tape. 

Now, so it would appear, the millennials – an even bigger generation now entering their prime income-generating and investing years – are hooked on the world’s biggest casino. The shorthand for this is “the Robinhood investors” because of the eponymous platform’s striking popularity with that particular demographic.

Our question here today is this: after charging up the electric vehicle names, launching the space exploration stocks, and powering the cloud players into the sky, what will be next for this roving hoard of bubble-makers?

One reasonable guess might be the CBD stocks, given recent analyst expectations suggesting CBD is staring at a consistent CAGR trajectory of something like 30-50%, which isn’t matched by much else in the equity landscape. With that in mind, we take a look at a handful of highly active names in the space, including: cbdMD Inc (NYSEAMERICAN:YCBD), Neptune Wellness Solutions Inc (NASDAQ:NEPT), MCTC Holdings Inc (OTCMKTS:MCTC) aka Cannabis Global Inc. (OTCMKTS:MCTC), Aurora Cannabis Inc (NYSE:ACB), and Medical Marijuana Inc (OTCMKTS:MJNA).

cbdMD Inc (NYSEAMERICAN:YCBD) shares have been breaking out in recent action. The latest from the company is its report on second fiscal 2020 quarter ended March 31, 2020 results.

According to its release, the Company reported net sales of $9.4 million, a year-over-year quarterly increase of approximately 67%. The Company also reported 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. 

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 32% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 41% in that time on strong overall action. 

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) most recently announced that it has been authorized by Health Canada to sell cannabis products to provinces and territories. 

According to its release, this sales license includes edibles, vapes, extracts, and topicals, including beverage products to name a few. This authorization adds to previously held processing license and will expand Neptune’s cannabis operations to include proprietary branded products. Additionally, the authorization enhances the capabilities of the Company’s white label offerings, providing incremental value and service offerings to its B2B customers.

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. 

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 2% in that timeframe. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -5%. 

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).

MCTC Holdings Inc (OTCMKTS:MCTC), now doing business as Cannabis Global, Inc. (MCTC), appears to be closer to a powerful actualization step, allowing the company and its shareholders to begin to cash in on a strong R&D program that features more than a half dozen strong patent applications now in progress with the USPTO.

Most recently, the company announced that it has completed initial product development of the Hemp You Can Feel™ product lines, and the launch of the next phase of the Company’s operations, which will focus on bringing the product lines to the marketplace. Over the coming weeks, Cannabis Global will be launching several new product marketing initiatives designed to move its innovative hemp extract and rare cannabinoid products into the marketplace. 

“It has been approximately one year since we reorganized the Company, which today is known as Cannabis Global, Inc. During the first year, we concentrated on designing products that are distinct from the competition with established advantageous barriers,” commented CEO Arman Tabatabaei.  “We are very pleased with the results in that we not only have a unique product set, but also one based on both quality ingredients and solid intellectual property.”

As noted, Cannabis Global (OTCMKTS:MCTC) has, as noted above, recently filed six patents on cannabinoid extraction technologies and delivery systems. Management is currently working with patent counsel to protect various other technologies it has developed or is currently developing, including its programs pertaining to cannabinoid glycosides, polymeric cannabinoid nanoparticles and nanofibers, and its hemp extract-based alcohol replacement technologies.

“Our unique infusion and production technologies provide Cannabis Global with a product purity advantage as well as a clear path to low cost leadership,” commented CEO Arman Tabatabaei. “The THC-V cannabinoids are synthesized and entirely free of impurities. While there were some upfront technology development and intellectual property protection costs, we expect our ongoing variable production costs to be less than half of any potential competitor. Via our technologies, we turn one of the cannabis industry’s most expensive items – pure THC-V cannabinoids – into a cost-effective solution that sets a new standard for product purity in the cannabinoid-based products marketplace.”

MCTC Holdings Inc (OTCMKTS:MCTC) had no reported sales in its last quarterly financial data. But it appears to be closing in on commercial-stage operational gains for shareholders and has a strong IP edge in the industry.

Aurora Cannabis Inc (NYSE:ACB) continues to be an emerging force in the CBD industry following its recent acquisitions of assets and IP pertaining to the space. To help cement that positioning, the company recently announced that Miguel Martin, President of Aurora USA and head of Reliva, LLC (“Reliva”), has been appointed Chief Commercial Officer of Aurora, effective immediately. Mr. Martin will replace Darren Karasiuk who has held this position at Aurora since February 2019.

“This appointment allows us to take full advantage of Miguel’s depth of international CPG experience to drive Aurora’s revenues and brand strength in our global core markets,” said Michael Singer, Executive Chairman and Interim CEO of Aurora. “Miguel has a proven track record of running profitable global sales and marketing teams in complex, highly regulated industries that are adjacent to cannabis. His new role at Aurora is indicative of our commitment to combining sales and marketing excellence with driving profitability in our core businesses.”

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).

It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things.

Aurora Cannabis Inc (NYSE:ACB) managed to rope in revenues totaling $75.5M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 15.9%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($242M against $206.4M).

Medical Marijuana Inc (OTCMKTS:MJNA) is a chronic laggard in the space, but has worked to amass some potentially interesting catalysts. That said, the narrative here is likely to remain embattled by a history of overpromising and underdelivering as well as a track record of debilitating dilution. With that said, the company most recently announced that its subsidiary HempMeds has launched a retail partnership with Gelson’s Market to sell the Company’s cannabidiol (CBD) topical and beauty products throughout Southern California. 

“When the founders of HempMeds started the company in 2012, retailers didn’t want to work with us, or any CBD companies for that matter,” said Raul Elizalde, Co-CEO of HempMeds®. “The taboo of anything cannabis related and the lasting effects of the War on Drugs made it nearly impossible to sell to the general population but as more research was conducted into its potential benefits, consumers started demanding CBD at the places where they were already shopping.”

“As we evolve and grow, we look forward to working with retail partners such as Gelson’s that have a similar mission and vision of bringing high-quality natural products to market,” added HempMeds® Co-CEO Caroline Heinz.

Medical Marijuana Inc (OTCMKTS:MJNA) bills itself as an investment holding company that operates in the medical marijuana and industrial hemp markets. Its products range from patented and proprietary based cannabinoid products to seed and stalk or isolated high value extracts manufactured and formulated for the pharmaceutical, nutraceutical, and cosmeceutical industries. The company licenses its proprietary testing, genetics, labeling and packaging, tracking, production, and standardization methods for the medicinal cannabinoid industry. 

Even in light of this news, MJNA has had a rough past week of trading action, with shares sinking something like -5% 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 -23%. 

Medical Marijuana Inc (OTCMKTS:MJNA) pulled in sales of $16.9M in its last reported quarterly financials, representing top line growth of -4.2%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($6.2M against $11M, respectively).

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