The pot industry is quickly gaining the attention of the world, thanks to its innovativeness and its growth potential. Investors who want a piece of the cannabis-pie usually look at CBD companies.
CBD is Cannabidiol, which is one of the most active ingredients in marijuana plants. CBD is the basis of â€śmedical marijuanaâ€ť which is not just legal (in some states), but also a flourishing industry around the world. The component is not associated with â€śhighâ€ť associated with pot use. Therefore, it comes across as an interesting, high potential industry that everyone can invest in.
Before investing in a CBD company, make yourself aware of the fact that most of them will be loss-making ventures. Like other growth stocks on the market, these firms are focusing on building a stronger market presence and investing significantly in research and development of new products.
If you think CBD stocks are right for you, check out our list of best global stocks that deal in CBD.
The de facto leader of North American CBD stocks is Aphria. The NYSE-listed companyâ€™s shares surged during August. Last month, it also announced a strategic partnership with ParcelPal Technology. The latter will be involved in the delivery and distribution of medical cannabis products from Aphria.
The service will be limited to Calgary, Alberta in the initial phases but will likely expand into other regions soon. The next candidate cities will be Windsor and Toronto. Using ParcelPalâ€™s platform, users will be able to track the deliveries of their medical CBD in real-time. Company CEO Irwin Simon credits the companyâ€™s success to its low-cost production.
One of the biggest and most well-known CBD stocks in the industry, Canopy Growth is almost synonymous with the cannabis sector. Times are not faring well for the company as it recently reported C$1.28 billion in losses for the second quarter. It missed analyst estimates as well. Canopy is the largest cannabis company by value, which means that small hiccups in performance shouldnâ€™t make you write off the brand completely.
Note that Constellation Brands Inc., the brewers of Corona beer, invested over $4 billion in the company because of which it is expected to take a $54.8 million loss in the third quarter. Constellation is widely credit for being the reason behind the axing of former CEO Bruce Linton, as the brewing company felt the pressure to mitigate losses. Despite running a loss-making business, Canopy continues to increase its sales.
Just like Aphria, CV Sciences Inc. too inked a distribution deal in August with The Vitamin Shoppe. The company will be utilizing the specialist retail platform provided by its partner to distribute its PlusCBD Oil product.
Other products that will be included in the nationwide network of Vitamin Shoppe will include Gold Formula Drops, Gold Formula Softgels, PlusCBD Oil Roll-On and capsules and sprays of the Total Plant Complex range. All products will be available in 30 states in the US and Puerto Rico after mid-September. This will create a great opportunity for the company to create a broader spectrum of sales for its products across the US.
The Australian company is working on steroids in 2019. In the first half of the year, it reported a whopping 19% revenue growth and then went on a spending spree to create more products, hire new staff and do market research. Though the companyâ€™s share price has been relatively weak, it could be because of its huge marketing and brand awareness expenditure, which is expected to fuel growth in the long run.
Freedom Leafâ€™s subsidiary Green Lotus completed the first commercial shipment of CBD topicals worth $600,000 to Mexico in August. The transaction took place in association with CBD Life SA, a Mexican brand for consumer goods. The goods will be distributed via regular retail channels and will not need any separate medical or government approvals. This shows a significant market for cross-border CBD topicals that an investor can cash on.
Folium Biosciences has a lot of interesting growth happening this year. It is the largest producer of cannabinoids (hemp-derived) in North America and earns its spot in our list because of SuperZoo, its animal-focused CBD line.
It has a broad lineup of hemp pellets for livestock, dog treats, and tinctures that could help dogs and other pets with different health conditions. It is planning a facility in Canada too, and a South American operation is also in the pipeline which could help it dominate the Americas in CBD pet and livestock products.
Last month, the company published its financial report for the quarter ending June 30, highlighting a $4.2 million revenue. Though the company still suffers a loss, it has reduced operating expenses by $13 million quarter-on-quarter. It too has a supplement line for pets called Pawceuticals. Moreover, it has Iso-Sports product Vending Machine program in 20 Powerhouse Gym locations in the US.
Medical Marijuana Inc. holds a unique record of becoming the first public-listed cannabis company in the US. The company has several accolades up its sleeves. For instance, it is the first company in the CBD sector to become a part of Prescribersâ€™ Digital Reference. It is an educational resource widely used by doctors in the US. Two of its products, Pure Gold CBD hemp oil (by subsidiary company Kannaway) and Real Scientific Hemp Oil Gold Label were included in the list.
If you are serious about investing in CBD companies based in North America, look no further than Canada. Our northern neighbor is home to some of the most successful and promising companies working in the CBD sector.
As always, we advise you to conduct your own due diligence before investing in a stock. Check your risk profile, the amount of money you want to invest and the kind of exposure you should get in this sector before making an investment decision.
Disclaimer:Â The author does not have any position in the stocks mentioned. Also, the author may not be a certified financial advisor, and the opinions expressed should not be treated as investment advice.
Buying and selling of securities carry the risk of monetary losses. Investors are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.