A snapshot Into Global CBD Insights Trends and Market Size
The global Cannabidiol (CBD) market is projected to grow at a compound annual growth rate of 125% from 2019 to 2026. The robust growth stems from growing awareness of CBD health benefits as well as the opening up of the market around the world. An increase in the number of countries that have legalized the use of CBD for its health claims has helped foster further growth, making CBD a buzzing market phenomenon.
CBD Insights
CBD is a compound extracted from hemp and marijuana for its medicinal and therapeutic properties. The compound has emerged as a remedy for addressing various medical conditions such as inflammation, pain as well as sleep disorders. CBD infused products such as cannabis oil, beauty and skincare products, gummies, and dog treats have since cropped up as manufactures continue to explore ways of leveraging CBD properties. In recent years, there has been a spike in demand for cannabidiol in pharmaceutical formulations, by virtue of the compound’s comforting properties. Likewise, hemp production has continued to edge higher as growers and producers look to take advantage of the growing market appeal. Strong demand for CBD skincare products made up of moisturizers creams, cleaners, oils and sun creams continued to trigger strong demand for CBD. The use of CBD in beauty products has gathered momentum in recent years owing to the compound’s anti-inflammatory and antioxidant properties.
Distribution Channels
Considering the fact that cannabidiol is still a controlled substance in many jurisdictions around the world, wholesalers and retailers must have a license from relevant authorities to distribute it. In countries where CBD is legal for medicinal purposes, hospitals and pharmacies have a leeway to prescribe CBD products without too many restrictions. Likewise, hospitals and pharmacies account for the biggest share when it comes to CBD distribution around the world. Retail Pharmacies come a distant second specializing mainly in offering CBD infused personal care products, food items, and medicines. Online stores such as Pure CBD Vapors, CBD Outlet Online, and Discover CBD offer multiple CBD-infused branded products and edibles as well as wax forms. CBD Regional Insights The U.S and Canada continue to lead the way, given the size of their CBD market. North America stands out in part because of friendly regulatory frameworks. A number of states in the U.S have already legalized the recreational and medicinal use of cannabis; Canada having legalized cannabis at the federal level. The Americas accounted for 78% of the global CBD market in 2018 at $2.4 billion, with Europe coming a distant second with a market value of $358 million. The beverage segment of the CBD market remains the biggest accounting for 51% of the total market valued at about $1.6 billion. This segment is projected to soar 127% by 2026.
While cannabis has remained a banned substance in most countries, some country’s attitudes are slowly changing. Asia for instance, presents an enormous untapped market opportunity. The country is considered an attractive region for laboratory proficiency owning to the territories’ large base of manufacturers as well as research laboratories.
Growing CBD Investments
Sensing a window of opportunity, a number of companies have jumped on the CBD bandwagon, creating a vast assortment of products around Cannabidiol and its byproducts. Veritas Farms, Inc. (OTCQB: VFRM), a vertically integrated agribusiness, has invested vast sums of money on the production of a full-spectrum of CBD products. The company has recently unveiled a line of natural hemp oil products that contain CBD and intend to continue to add to their assortment in the near future. Dubbed as the leader in hemp extraction products, Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) has expanded its research initiative with The Center for Discovery in New York as it seeks to develop hemp genetics. The company’s breeding program is spearheading the development of superior CBD varieties to support the efforts of local farmers. Medical cannabis firm EXMceuticals Inc. (CNSX: EXM) is another company that has set sights on the CBD landscape focusing on North America as well as Europe. The company has already secured a cannabis research and development license from the Portuguese National Authority of Medicines and Health products to lead the way in European CBD circulation and, ultimately, worldwide distribution.
Bottom line
Increased hemp production fueling the rising demand for cannabidiol rich hemp biomass should continue to bolster CBD market growth. Likewise, increased adoption of refined CBD products coupled with the legalization of medical marijuana should drive demand for CBD products worldwide. Furthermore, companies are beginning to adopt new strategies and plunging into strategic mergers and acquisitions to strengthen their CBD production capacities. As progressive CBD companies move to expand their presence in the industry, the global CBD market size should continue to clock new heights globally.
Ruchi Gupta is financial journalist, specializing in small-cap companies mainly in the cannabis space. Disclosure: Ruchi Gupta works for Momentum PR, which represents EXMceuticals on the public relations front.
This Is Why Grown Rogue International Inc. (CNSX: GRIN) Appears Undervalued
Grown Rogue International Inc. (CNSX: GRIN) share price is yet to paint an accurate picture of the company’s tremendous potential amidst improving fundamentals. Investor sentiments in the stock did take a hit if price action in the first half of the year is anything to go by. Wild price swings saw the stock rally by more than 50% before tumbling to all-time lows.
The plunge came as a surprise as it came at a time when the broader cannabis sector was flying high. In addition, the company has been on an impressive run on the execution of its core business affirming growth metrics and the need for a higher valuation in the market.
Sales Growth
Grown Rogue is enjoying its best run when it comes to sales growth. The company reported a record-breaking quarter depicted by 388% YoYo growth in sales that came in at $834,309. At the end of the quarter, the company projected continued growth throughout the year, relying on expansion plans to key cannabis markets of California, Oregon, and Michigan.
The Company did meet its promise of robust growth on reporting a 125% quarter over quarter increase in sales in Q2 that came in at $1.9 million. Sales growth is indicative of brand strength as well as distribution reach, as the company continues to expand its wings into new markets. The company has since grown from controlling just three cannabis licenses to 22 licenses further affirming its multi-state operations.
“To have gained this brand recognition and sales traction, in what is arguably the world’s most competitive legalized cannabis market, bodes very well for our expansion into California and particularly the newly legalized market in Michigan,” said CEO Obie Strickler.
Sales growth looks set to be the order of the day as the company has expanded its footprint into Michigan as part of its growth strategy. Michigan becomes the third state from which the company will operate in addition to Oregon and California.
The expansion should reduce the company’s reliance on one market for growth. It should also shield it from the effects of a downturn in one market.
Gross margins have also shown signs of improvement helped by robust growth in revenues. Gross margin in the recent quarter improved to $0.4 million, a 20% increase. Margins are likely to continue improving as cannabis prices in Oregon show signs of edging higher as demand continues to outpace supply.
Organic Growth
Grown Rogue has also underscored its push for growth at all cost. The acquisition of Decibel Farms affirms push for inorganic growth even as the company continues to refine its internal operations to accelerate organic growth.
The acquisition of Decibel Farms marks an important milestone in the company’s growth strategy. With the acquisition, the company gains access to a valuable asset poised to strengthen its cannabis cultivation and production capacity further.
According to the Chief Executive Officer, Decibel Farms will bolster Grown Rogue manufacturing capacity in Oregon where demand for cannabis products is on the rise. Production capacity could reach highs of 5,400kg by the end of the year with the scaling of cultivation operations.
“We believe that licenses, assets, and operations are of little value without an experienced team that knows how to cultivate quality cannabis products at scale and build meaningful brands. Our team has been building these core competencies for the past 3 years,” added Jacques Habra, Chief Strategy Officer.
Demand for branded products continues to exceed internal production; one of the reasons the company is turning to acquisition to ramp up capacity.
Grown Rogue Price Analysis
While Grown Rogue has lost a significant amount of market value over the past six months, price action activity indicates potential to bounce back from all-time lows. The C$0.20 mark has since emerged as a crucial support level from where bulls appear to be jostling for positions consequently fuelling a bullish momentum.
Given the descending long-term bear trend and the fact that bears appear to be in control, the stock might have to rally and take out the C$0.24 resistance level, for the short-term momentum to turn bullish. A rally followed by a close above the C$0.24 mark could arouse buying pressure from buyers who have been on the fence.
https://ca.finance.yahoo.com/news/grown-rogue-reports-388-growth-111100202.html
https://ca.finance.yahoo.com/news/grown-rogue-announces-proposed-acquisition-124100831.html
https://ca.finance.yahoo.com/news/grown-rogue-second-quarter-revenue-123800178.html
- Published in Cannabis, CBD, Grown Rogue, Marijuana