The CBD Wave is Coming: How Companies are Prepared to Meet Market Demand
POINT ROBERTS, Wash., March 28, 2019 (GLOBE NEWSWIRE) -- Investorideas.com, a leading investor news resource covering hemp and cannabis stocks releases a snapshot focusing on the rise of CBD within the overall cannabis market in the US and internationally, and how companies are preparing to deal with this explosive market.
With the passing of the 2018 Farm Bill in the US, CBD represents a developing sector with many vendors now seeking national reach to US customers. The rise in popularity for CBD products is driven by consumers seeking natural-based health & wellness solutions to treat various ailments; from inflammation, to anxiety and insomnia amongst many others. As a result, the hemp-derived CBD market has been estimated to reach US $22 billion by 2022.
One of the larger companies in the CBD space, Village Farms International, Inc. (TSX: VFF) (NASDAQ: VFF) recently applauded the actions of the Texas Department of Health and Human Services in de-scheduling hemp, including its cannabinoids (except for delta-9 tetrahydrocannabinol (THC)) in compliance with the 2018 Farm Act and Texas law. Under Texas law, the removal of hemp from the controlled substances schedule will be effective on April 5, 2019, 21 days after the schedule's publication. Texas still must pass a hemp bill to enable the creation of a State Hemp Plan under the 2018 Farm Act and develop a thoughtful regulatory regime to support the hemp industry and protect consumers.
With more CBD markets opening up, American Premium Water Corporation (OTC: HIPH), a diversified luxury consumer products company focused on businesses in the health and beauty and biotech sectors, recently announced that it has engaged A&R Opportunity to manage and fund a national sales team based out of Northeast Ohio that will help market and sell the Company’s products nationwide. The arrangement was necessitated by overwhelming demand for the Company’s products, including its LALPINA CBD beverage and CBD topical products from its most recent acquisition of plant + body essentials. CEO of American Premium Water Corporation, Ryan Fishoff commented, "I am pleased to announce we have engaged with A&R to help oversee the Company’s national sales strategy. The inbound demand has been overwhelmingly strong and it became apparent over the past few weeks that the Company needed more assistance in managing and servicing sales accounts. Their location in Northeast Ohio also provides us with a presence in the Midwest, an area that we have not been focusing on, but over the past few months became clear to the Company was an area that needed to be addressed with burgeoning demand for CBD products. The terms of the agreement were also very favorable to the Company, as it is performance based, so all party’s incentives are aligned. This will be beneficial for the Company going forward as we look to continue to expand our distribution footprint nationwide and rollout new products in the coming months."
The non-alcoholic beverage marketplace is estimated to generate revenue of approximately USD$1.2 trillion by 2023, according to Markets and Research analysis. Companies employing innovative marketing strategies, more flavor choices, and the use of natural, high-quality ingredients will continue to drive market growth in the category.
This may explain why SOL Global Investments Corp. (CSE: SOL) (OTCQB: SOLCF) just announced its investment in leading premium soda-maker Jones Soda Co.
SOL Global's total investment represents approximately 8.19% of the total issued and outstanding common shares of Jones Soda which, based on publicly available information, makes it the company's largest stockholder. SOL Global has filed a Schedule 13D with the United States Securities and Exchange Commission describing its investment in Jones Soda.
Cannara Biotech Inc. (CSE: LOVE) is also looking into marketing and distribution for CBD, having recently announced that its subsidiary, Global shopCBD.com Inc. has closed private rounds of financing for aggregate proceeds of $8,865,849.15.
From the news: "As the hemp CBD consumer markets continue to evolve, what is increasingly clear is the health and wellness segment is becoming more prominent," said Zohar Krivorot, President and CEO of Global shopCBD.com. "The high level of investor interest in participating in shopCBD.com underscores the potential of both CBD products overall and moreover, a best-in-class online platform to serve this market."
There can be no doubt that the CBD sector is about to take off as consumers wait impatiently for products to become available, but is the industry properly prepared? As we saw with recreational cannabis in Canada, many companies are likely to be unprepared to keep up with supply, but there are numerous companies like the ones above heeding the warning signs and taking the proper preemptive actions to ensure they are ready when the CBD flood gates open.
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