The Hemp and CBD Movement in Early Innings (CWBHF, YCBD, TOMI, MJNA)

The Hemp and CBD Movement in Early Innings (CWBHF, YCBD, TOMI, MJNA)

While CBD and Hemp stocks have had their share of rough times over the past two years, there are signs that the space has seen the worst of the down-cycle pain and now stares up at the next leg of what may be an enormous long-term structural growth trend.

One recent piece of research (May 2020, Industryresearch.biz) for strictly CBD oil shows growth expectations at a CAGR of roughly 32.0% over the next five years, to reach over $1.25 billion by 2024, up from $311.8 million in 2019. These numbers are smaller simply because this is the market for CBD by itself. The market for CBD-based products is much larger, and will grow to be many times this size over the same period, with analysts calling for $15-25 billion in sales by 2025.

Grand View Research, for example, puts the global cannabidiol-based products market at a value of $4.6 billion already by 2018. Their research suggests it will grow by over 22% CAGR from 2019 to 2025 to reach nearly $19 billion.

With that in mind, we take a look at a selection of active CBD stocks, including Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF), cbdMD Inc (NYSEAMERICAN:YCBD), Golden Triangle Ventures, Inc. (OTCMKTS:TOMI), and Medical Marijuana Inc (OTCMKTS:MJNA).

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) 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.

Charlotte’s Web Holdings, Inc. is a 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 Holdings Inc (OTCMKTS:CWBHF) recently announced its “Trust The Earth” initiative, which is designed to democratize access to hemp-derived products for those seeking wellness and relief.

Studio Number One, a creative agency co-founded by artist Shepard Fairey, created the original artwork, first publicly exhibited by Charlotte’s Web as a mural in Brooklyn in October 2019.  Today, Studio Number One’s original art is exhibited from the ground up, literally, as field art on a mammoth scale of 76-acres in America’s heartland.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CWBHF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -9% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) pulled in sales of $30M in its last reported quarterly financials, representing top line growth of -10.3%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($136M against $62.6M).

cbdMD Inc (NYSEAMERICAN:YCBD) 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.

cbdMD Inc (NYSEAMERICAN:YCBD) just announced that its pet CBD brand, Paw CBD, has seen an approximate 64% increase in net sales from its March 2020 quarter of approximately $750,000 to approximately $1,229,000 for its June 2020 quarter.

“Paw CBD was launched less than one year ago, and now it is one of America’s leading CBD pet brands,” said Ken Cohn, CMO of cbdMD, Inc. “Sales metrics are all moving in the right direction, with Paw CBD now trending at over a $7mm annualized run rate, and cbdMD’s overall direct-to-consumer (DTC) sales making up over 70% of the brand’s revenue. We are seeing the DTC power of cbdMD.com translating into significant growth for PawCBD.com.”

Even in light of this news, YCBD has had a rough past week of trading action, with shares sinking something like -10% 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. Shares of the stock have powered higher over the past month, rallying roughly 6% in that time on strong overall action.

cbdMD Inc (NYSEAMERICAN:YCBD) pulled in sales of $10.6M in its last reported quarterly financials, representing top line growth of 32.2%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($15.1M against $4.4M).

Golden Triangle Ventures, Inc. (OTCMKTS:TOMI) is a multifaceted consulting company pursuing ventures in the Health, Entertainment and Technology sectors. Its HyGro product has strong implications for the hemp and CBD marketplace, as well.

The company aims to purchase, acquire and/or joint venture with established entities within these areas of business. In addition, GTV provides a professional corporate representation service to different companies in these sectors while consulting on a variety of different business development objectives. The goods and services represented are driven by innovators who have passion and commitment in these marketplaces.

Golden Triangle Ventures, Inc. (OTCMKTS:TOMI) recently detailed its plan to commercialize its “HyGrO” product under its technology division, HyFrontier Technologies, Inc.

According to the release, HyFrontier Technologies, Inc. currently manufactures its “HyGrO” product in Colorado Springs, CO in a 3000 square foot facility which is operated by James Culture, Co-Founder and CTO of HyFrontier Technologies, Inc. This facility was used to create the original prototype and procure “HyGrO” units to all of the company’s current testing partners. In the near future, management will be relocating its operations to Florida in a state-of-the-art manufacturing facility where the company will begin producing roughly 500 units per month on its Series 1 product, which will be used for indoor green houses and small farms.

Robert DuBose, founder of HyFrontier Technologies states, “We are so pleased with all the positive testing completed in 2020. It’s been an eye-opening experience for growers to witness the incredible difference using regular water vs HyGrO water (hydrogen and oxygen infused). Plants grown in HyGrO water produced significantly more yield, much more than any of them could have imagined. Improved health, stamina and improved quality of crops were seen by all. One of the most phenomenal results we all experienced and were particularly impressed with, was the root structures, where the HyGrO side was 2-3 times (or more) the size. HyGrO is truly a game-changer in agriculture and we are excited to get the commercialization process started.”

Golden Triangle Ventures, Inc. (OTCMKTS:TOMI) has begun to pick up its commercial-stage activities. While it represents a more speculative name on this list, it may also be the most underpriced opportunity given the lack of market appreciation for its coming catalysts at this point.

Medical Marijuana Inc (OTCMKTS:MJNA) bills itself as an investment holding company that operates in the medical marijuana and industrial hemp markets, including CBD products. 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.

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.

Medical Marijuana Inc (OTCMKTS:MJNA) just recently announced that its subsidiary Kannaway is proud to support the European Industrial Hemp Association (EIHA) in its recent opinion letter to the European Commission on the legal status of cannabidiol (CBD) and hemp.

EIHA’s letter was written in response to the European Commission’s decision to suspend all applications for hemp extracts and natural cannabinoids under the European Union’s Novel Food rules and also deem under a “preliminary conclusion” that extracts from the flowering and fruiting tops of the hemp plant should be considered a drug under the United Nations Single Convention on Narcotic Drugs of 1961. EIHA explains that the decision is “not based on the latest scientific literature nor inspired by the current debate at the United Nations level.”

If you’re long this stock, then you’re liking how the stock has responded to the announcement. MJNA shares have been moving higher over the past week overall, pushing about 0% to the upside on above average trading volume. MJNA shares have been relatively flat over the past month of action, with very little net movement during that period.

Medical Marijuana Inc (OTCMKTS:MJNA) pulled in sales of $11M in its last reported quarterly financials, representing top line growth of -46.9%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($5M against $10.5M, respectively).

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Published at Thu, 29 Oct 2020 17:57:57 +0000

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