Chow420 is a company that is building a one-stop marketplace for the thriving CBD market, both online and offline with automated dispensaries. The CBD market is a new market with a relatively light regulatory framework, which poses risks. But it also has a projected growth that can make someone to invest in Chow420 worth considering.
In another article about the fast-growing CBD market and Buzzn, we mentioned that competition in the CBD market will be intense, but specialized investment opportunities will arise. You can now invest in Chow420 with an active campaign on StartEngine.
There are three main reasons why you should consider investing in Chow420:
- The market growth
- The high profit margins
- The diversified business model
Before analyzing these reasons to invest in Chow420 in greater detail, it is essential to mention the products. We should also note that, in addition to investing in Chow420 stock, interested groups can also become a business partner of Chow420, generating revenue running an automated dispensary.
The Chow Products and the Online Marketplace
The online shop of Chow offers a variety of CBD products and a plethora of categories to choose products from. Some of the notable categories are:
• Accessories
• Drinks
• Oils
• Pets
• Skincare
There is a large pool of products, and you can shop online by brand or by category, look at that day’s deals or check out some groups of products based on your age.
There are two main age categories, one for those over 18 and the second for those over 21. There are featured dispensaries, and you can sell on Chow or become an owner and operator of an automated dispensary.
The good news is that Chow will do the marketing for you, which is solving a major problem of any online or offline business — getting traffic, and making sales.
The Market Growth Potential
An article on Yahoo Finance is supportive of the fast-growing CBD market, pointing out that the Brightfield Group research firm sees fast growth at least until 2022. “Now that larger retailers are already putting together their plans for what CBD products to carry, we expect the CBD market to hit $22 billion by 2022,” said Brightfield Group Director of Research Bethany Gomez in the article.
Chow is looking to operate at the intersection of not one but three billion-dollar industries:
- The herbal supplement industry
- The anxiety economy
- The legal cannabis industry
Besides, Chow will operate in the smart retail market. A report on MarketsandMarkets is indicative of the fast growth expected for the next five years. According to the article:
“The global smart retail market is estimated to grow from USD 21.6 billion in 2020 to USD 62.5 billion by 2025, growing at a CAGR of 23.6%. The key factors fueling the growth of this market are the increasing use of robots and automation to offer shopping convenience to customers and the rising adoption of big data analytics, machine learning, blockchain, and artificial intelligence technologies by retailers.”
The High Profit Margins Support the Attractive Business Opportunity
The company reports on StartEngine that there are high-yield partnerships “with over 200 plus leading brands in the industry, some of which allow us to make 387% of our cost price on each product we sell.” While these extremely high profit margins may face hard times due to forthcoming competition in the CBD market by other companies, for now they can provide another support to invest in Chow420.
Other than the high profit margins, Chow had developed a well-thought-out business plan that provides diversification and supports continued revenue generation. For starters, the company earns a 12% fee on all online sales.
Then there is the market opportunity to provide physical retail solutions for CBD business. Chow sells ChowPods automated machines at an average cost of $15,000 per machine sold.
The pandemic has caused severe changes in our daily lives, providing business opportunities for the companies that are well-prepared to present solutions to challenges that can disrupt the global economy. Chow is now working on developing RAAS (Retail as a service), a solution called Chowgo in 2021. By copying the WeWork business model, Chow will invest in commercial real estate, buying office buildings and transforming them into smaller offices renting them and generating two sources of revenue. First from the rents, and second by the products sold via the automated machines. It seems a clever idea and could add additional revenue over time.
Should you Invest in Chow420?
The company has raised over $635,000 and the minimum investment amount is only $189 with the company share price at 63 cents and a valuation of $5.04 million. There are even bonus rewards for those investing more in Chow420. I like the market growth potential and the business model, and although I place a lot on the importance of the high profit margins, I am skeptical about their sustainability.
I believe there is plenty of potential for Chow420, but this type of investment carries a lot of risks and is only suitable for investors with a high risk tolerance, having performed due diligence on this investment. Yet the growth of the cannabis market can offer investment opportunities for a well-diversified portfolio.
As of this writing, Stavros Georgiadis, CFA did not hold a position in any of the aforementioned securities.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks
