This week, we’ve looked at the growth trend for cannabidiol (CBD) that makes it a compelling investment now. Today I’ll cover some exciting developments in the market.
Trends like this always get a lot of press. But nothing beats boots-on-the-ground research. Unfortunately, it’s become a casualty of our connected world. Many analysts don’t bother leaving their offices any more. They’re making a big mistake.
When I was in Italy last September, I went into one of the “Cannabis Stores” in Sorrento. When I sat down and spoke with the shop worker, I found out that the products in the store were considered low in tetrahydrocannabinol (THC). This means that nothing in that store was going to get anyone stoned. Even though the marijuana flower was posted all over the store, the products were hemp-derived CBD.
As you can see in my picture below (which I’ve also shared in Investment Opportunities), there’s everything from capsules to drinks. And the clientele isn’t just a bunch of deadbeat kids. The nice woman next to me is in her prime years and was there for medical purposes.
Those of you following MoneyWire from outside the United States already know that CBD is not viewed as a legal concern in most developed countries.
Within a few years, CBD — and hemp plants, which are the best source of CBD — will be decriminalized in most countries. Last August, just before I took that picture, the World Health Organization recommended to the United Nations that its 194 members “deschedule” CBD. That’s healthcare speak for “this should be legal.”
In terms of hemp production, the United States is just beginning to catch up to the European Union, where growing industrial hemp has been legal for years. You’re allowed to grow there as long as the THC level is below 0.2%.
As you can see below, the biggest player there is France. It alone produced far more industrial hemp than the United States did before the U.S. Farm Bill opened things up in December.
And we can’t forget Canada, which has the most favorable laws right now. By fully legalizing cannabis in October, Canada opened the floodgates not just for the marijuana industry, but for hemp and CBD as well.
That’s why Constellation Brands (STZ) went north of the border when it decided to get into the cannabis market.
The Beverage Opportunity
From its home base in New York, Constellation Brands made its first move into the Canadian cannabis market in 2017 — then upped the ante in 2018… bringing the total investment to nearly $5 billion.
Constellation Brands spent these billions with a particular market in mind: CBD and marijuana infused beverages. After all, this is a huge global alcoholic beverage company we’re talking about — and there’s a clear opportunity there.
Just like in Europe, health and wellness stores in the United States currently carry beverages with low levels of CBD as health drinks. Instead of a sports drink high in sugar or water that has a high pH level, consumers can opt for a beverage that contains CBD, an antioxidant and anti-inflammatory. I have tried a few and I see this trend exploding in the future.
And I’m not the only one:
- Coca-Cola (KO) has made some interesting comments on the trend. A company representative said: “Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world.”
- John Boehner, the former Speaker of the House, is another big advocate. He sits on the board of Acreage Holdings (ACRGF), which produces cannabis in 20 U.S. states. Acreage recently hired a former chief product and innovation officer from Diageo (DEO) — Constellation’s even larger competitor.
Besides Constellation and Coca-Cola, Molson Coors Brewing (TAP) is looking at moving in, too. In fact, Molson Coors just announced that it will start selling CBD products in Canada as soon as CBD edibles/beverages become legal there in December.
As these big-name beverage companies look into the CBD sector, it will open up new distribution outlets. Today, three-fourths of all hemp CBD is distributed via natural food stores, online, or in smoke shops. By 2022, The Brightfield Group predicts that 64% of sales will be through retail chains like Walmart (WMT), Target (TGT), CVS Health (CVS), and more. CBD is in the process of going mainstream.
When you’re looking to invest in an up-and-coming industry, nothing could be better than seeing mega-corporations move in. That’s especially true here. While more people are learning about the benefits you get from CBD (without the side effects), there’s still a lot of misunderstanding and confusion. Those people will be more open to CBD from well-known retailers, which lends it credibility.
There’s another major player that’s going to help here: the U.S. Food & Drug Administration (FDA).
When More Regulations Are A Good Thing
We’ve known since April, when the FDA announced a public hearing on CBD, that it was going to get involved.
Sounds like a problem, right? Actually, it’s just a signal that the industry will have some ground rules.
Remember, the FDA isn’t just for “food and drugs.” It also deals with supplements and cosmetics. That covers basically all the possibilities for CBD.
So, the FDA can regulate CBD. The question is: How?
The hearing itself wasn’t much of an event. So we know there’s more to come. Basically, the FDA could go a few different ways: A) new regulations, B) new “guidance,” or C) application of existing laws.
Ultimately, this is all good news.
I am usually not a fan of regulations, but in this case more government oversight will benefit both the industry and consumers alike. In the CBD space, there are high-quality companies — but there are also people claiming (for instance) that their product will cure cancer or Alzheimer’s when they don’t have the research to back it up… or selling “CBD products” that actually have little to none of the compound in their ingredients. I’ve seen these bad players for years, and believe me, I’ll keep you away from them.
Regulations should “weed out” the bad players. And that will allow best-in-breed companies to gain even more market share. It will also benefit consumers, because the FDA will issue its dosing guidance, which will help people buy with confidence.
All this, in turn, gives investors more confidence in CBD companies – providing further upside for their stocks.
The Best Stocks to Cash In on the CBD Mega-Trend
I’m so confident in this trend, I’ve been working with my publisher to develop the CBD Early Investor’s Kit. You don’t have to do the research because we’ve done it for you!
My #1 CBD Stock in the World has been eating up much of the U.S. market share in CBD, because it can produce a higher-quality product… and lots of it. I’ve got a whole investment guide to fill you in before the crowd catches on.
I’ve also picked Three More CBD Stocks to Fatten Your Wallet. These other companies are quietly doubling revenues, tempting away top executives from Fortune 500 companies, and expanding into whole new markets.
My CBD Early Investor’s Kit has the full story on all of these stocks, including names, ticker symbols, and buy-under prices. For those who want to really get to know the product firsthand, the kit also includes a 15-day supply of high-grade CBD from CannaComplete.
P.S. The good news is that some of these companies are still very small — so you can get in on the ground floor. As any venture capitalist will tell you, that’s exactly the time to do it.
The bad news is that they won’t be small for long. Folks all around the world are trying CBD and finding out about its benefits… from that little shop in Sorrento, Italy, to the corner stores here in the United States.
Plus, since we’re including the free sample of CBD, we only have so many of the CBD Early Investor’s Kits. Be sure to claim yours today.
Learn where Matt McCall sees
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