Upcoming CBD Shortage is an Opportunity for Cost-Efficient Producers to Expand
New York, NY – May 30, 2019 – Few developments have been as game-changing for the cannabis industry as the U.S. Farm Bill. While demand for cannabis will remain strong over the upcoming years, experts are anticipating that the hemp industry will become a new big player in the marketplace. Ever since hemp agriculture was legalized thanks to the U.S. Farm Bill signed December last year, cannabis companies around the world have jumped on the opportunity to get in on ground zero of this sector. Well known Canadian listed companies such as Charlotte’s Web Holdings Inc. (OTC:CWBHF) (CSE:CWEB), CV Sciences Inc. (OTC:CVSI), Liberty Health Sciences (OTC:LHSIF) (CSE:LHS), Namaste Technologies (TSXV:N)(OTC:NXTTF), and StillCanna Inc. (CSE:STIL) (OTC:SCNNF) have all been making major moves in the growing hemp market.
Analysts at the Brightfield Group predict CBD will grow from a $600 million sector this year to $22 billion by 2022. With the US Farm Bill in effect, demand for hemp is expected to spike over the upcoming year as cannabis companies switch to sourcing hemp for their CBD.
The Growing Market for Hemp
While interest in hemp-based products has been growing, the current demand is only at a fraction of what it is expected to be. Just as Canadians saw drastic supply shortages after the demand for cannabis spiked post-legalization, so too will the CBD industry. For this reason, companies that can scale up hemp production in a way that’s cost-efficient are in the best position to dominate the market when CBD supplies become tight.
One of the first-movers in Europe when it comes to cost-efficient hemp cultivation is an up and coming company called StillCanna Inc. (CSE:STIL) (OTCPK:SCNNF). The company boasts one of the lowest production costs of CBD isolate with a production cost of just $744 per kg. The wholesale price for hemp isolate is currently $6,077 per kg. Their new facility in Poland is expected to bring 2019’s production output up to 16,000 kg and in 2020, the Company’s output is expected to produce over 40,000 kg of CBD isolate.
Hemp-derived products are quickly becoming mainstream as Dr. Oz and Dr. Gupta spoke about “The CBD Oil Boom”. Even retail chains that haven’t traditionally embraced cannabis products, such as drug store chains and pharmacies, are stocking CBD products now. Walgreens has already announced they will be selling hemp-derived products in over 1,500 stores recently. Another major retailer, CVS, is already selling hemp products at over 800 locations in the U.S.
Charlotte’s Web Holdings Inc. is perhaps the biggest player in this market. Producing around 675,000 lbs of hemp in 2018 with more than 700 acres planned in 2019, the company’s revenue increased by 74 percent last year. The second largest company in the hemp market, CV Sciences Inc., has also seen significant growth even prior to the US Farm Bill passing. Over the past year, the company’s sales have increased by 200 percent and currently holds 11% of the overall hemp market.
Many retail-based cannabis companies have already embraced hemp-products into their line-up with great success. Namaste Technologies is one such example. Unique in the sense that they focus exclusively on online sales, the company owns 24 unique websites and brands, with many of them focusing on hemp products. Even in the medical market, hemp has surged in popularity. Companies that focus mainly on the health sector, such as Liberty Health Sciences, has seen a surge of hemp-product sales based on the reported medical benefits of the plant.
The Rise of Cost-Efficient Producers
StillCanna Inc. (STIL-SCNNF) has also been completing several strategic partnerships to further expand its capacity. They just recently finalized a deal with California-based BioSciences Enterprises for C$36 million, giving them a steady pipeline to sell their European produced CBD into the U.S. market. Richard Parker, President of Biosciences, said that “not a day goes by that our firm isn’t looking for a company like StillCanna, but finding a knowledgeable seed to shelf CBD manufacturer in this young industry is extremely rare.”
Other major deals that StillCanna signed include a $48 million agreement with one of the biggest CBD retail suppliers in Europe, DragonFly BioSciences. The deal would see StillCanna act as DragonFly’s sole processor of CBD, a significant achievement for a company that small.
Further Cannabis Developments
Charlotte’s Web Holdings Inc. (OTCQX:CWBHF)(CSE:CWEB) recently posted their Q1 earnings report for 2019. So far Q1 sales grew by 66% to $21.7 million, impressing analysts with steady growth. Ever since Congress passed the Farm bill legalizing hemp production, analysts expect this to be a game changer for the company.
Cannabinoid (CBD) oil is being used in a study with patients suffering from Post-Traumatic Stress Disorder (PTSD). CV Sciences Inc. (OTCQB:CVSI), a manufacturer of hemp base CBD-products, will be using their signature CBD-oil products in this clinical trial published in the Journal of Alternative and Complementary Medicine.
Liberty Health Sciences (OTCQX:LHSIF)(CSE:LHS) announced earlier in May that they had made some key executive changes. The biggest change was Sheri Cholodofsky, who was appointed as the new chief financial officer. She would be replacing the company’s former CFO, Jeff Chan, who filled the position as an interim CFO after the resignation of Rene Gulliver.
Ongoing development for Namaste Technologies (TSX-V:N)(OTCQB:NXTTF) has been its struggle to find an auditor after PricewaterhouseCoopers resigned from the role. Since then Namaste has issued management a cease trade order and just recently provided an update regarding their newest additions to their advisory board.
Disclaimer: Potstocknews.com (PSN) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with PSN or any company mentioned herein. The commentary, views and opinions expressed in this release by PSN are solely those of PSN and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable PSN and FNM for any investment decisions by their readers or subscribers. PSN and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.
The Article and content related to the profiled company represent the personal and subjective views of the Author (PSN), and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author (PSN) has not independently verified or otherwise investigated all such information. None of the Author, PSN, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment. FNM was not compensated by any public company mentioned herein to disseminate this press release but was compensated twenty five hundred dollars by PSN, a non-affiliated third party to distribute this release on behalf of StillCanna Inc.
FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and PSN and FNM undertake no obligation to update such statements.
FN Media Group, LLC