History is about to be made. On Dec. 11, the Senate passed the 2018 Farm Bill by a vote of 83-17. The House of Representatives passed it by a vote of 369-47 on Dec. 12, and now it is off to President Trump for a signature.
The bill will legalize hemp for the first time in nearly a century, swinging the door to massive growth wide open. As hemp-derived cannabidiol (CBD) oil hits the mainstream, we’re looking at an industry with the potential to be 55 times larger in just five years.
CBD oil is derived from marijuana and hemp plants, and it has been used by wellness and medical professionals for years as an alternative to traditional pharmaceuticals to treat everything from anxiety and depression to chronic pain, inflammation and childhood epilepsy. If it were a drug, we would call it a wonder drug.
CBD is considered one of the most beneficial compounds available to humans, and it does not have the nasty side effects that many drugs do.
That’s why my pick for the Best Stocks for 2019 contest is Charlotte’s Web (OTCMKTS:CWBHF) stock. In order for you to fully understand this company, let me begin by telling you a story …
CWBHF Stock and the Miracle Cure
Charlotte Figi was just three months old when she had her first seizure. It was a grand mal seizure, the most serious kind and it lasted 30 minutes. That was only the beginning.
The number of seizures kept increasing. By the time she was three, Charlotte needed a wheelchair.
At one point, she took up to seven medications to control the seizures, but they didn’t help. By age five, Charlotte was having up to 300 grand mal seizures per week.
That’s more than 40 a day… almost two every hour.
At one point, doctors put Charlotte into a coma to give her body a break from the constant wear and tear caused by the seizures.
It was around this time that Charlotte’s grandfather discovered that cannabis oil had helped another child who also had Dravet Syndrome. Desperate for help, the family tried the oil.
They were stunned at the immediate change.
After Charlotte’s first dose, she lived the whole next week of her life without a single seizure!
Her seizures didn’t go away completely, but the number fell dramatically – from 300 per week to just two to three per month. Charlotte’s life was completely changed.
There are many similar stories to Charlotte’s about both children and adults who have greatly benefitted from cannabis oil. The government and medical industry have been slow to embrace the evidence, but Charlotte has become one of the reasons the legalization of medical marijuana is sweeping the globe.
The tide is shifting and a tidal wave is coming, which is why I’m so excited about the huge potential in cannabis oil, even as many investors are looking past it.
CWBHF Is Best Positioned to Benefit
It is because of Charlotte’s grandfather that the company Charlotte’s Web ever came to exist. The Figi family reached out to medical marijuana growers and eventually the company was born.
On Aug. 30, the company announced that it had closed its IPO in Canada and raised $100 million through a secondary offering. On that same day, the company began trading as a public company on the Canadian Securities Exchange (CSE) under the symbol CWEB. In September, it started trading on the U.S. OTC market under the symbol CWBHF.
Charlotte’s Web is the absolute best positioned stock in the CBD oil market. It stands out from its peers for its ability to be the leader in this high-growth industry.
Revenue is on the upswing, and looking ahead, there are several catalysts that will drive growth. The first, as I already mentioned, is the passing of the Farm Bill. Until that happens, hemp is a Schedule 1 drug as determined by the U.S. Drug Enforcement Administration (DEA).
That’s laughable. Schedule 1 drugs are considered to have a “high potential for abuse” and “no currently accepted medical use.” We’re talking about heroin, cocaine, ecstasy and the like. CBD has many medical uses and little potential for abuse because it doesn’t get you high. The Farm Bill is a multibillion-dollar game changer for the CBD industry because legalizing hemp also removes it from Schedule 1.
And that will lead to increased production. In 2017, CWBHF produced 63,000 pounds of hemp. That number is expected to increase significantly this year to between 250,000 and 350,000 pounds. When the Farm Bill gets passed, it will lead to an even greater opportunity for the company to ramp up production around the country.
The second catalyst is more distribution outlets as chain retailers start to become the largest sellers of CBD. If you are a major retailer and need instant inventory, it is natural to turn to the market leader, which in this case is Charlotte’s Web.
I expect to see the number of retail outlets almost double from 2,700 to closer to 5,000, if not more, in the next two years. As the mass adoption of CBD grows, it will lead to increased demand from the market leaders.
The Time to Act Is Now
According to Brightfield Group, the hemp CBD market will reach $591 million this year. And by 2022, it will soar to $22 billion. That is a five-year compound annual growth rate of 132% and a 40-bagger!
Charlotte’s Web stands to capture a lot of that growth. It is the No. 1 hemp grower in the United States. And with CBD on the verge of going mainstream, the company’s profit potential is about to increase dramatically.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.
