U.S. CBD Demand Creating a $24 Billion Opportunity for Investors

U.S. sales of CBD products are expected to reach $24 billion over the next three years, according to the Brightfield Group. Better, as consumer clamor for demand, it’s putting billions of dollars into play, says A.T. Kearney’s 2019 CBD Market Survey. “The survey finds that roughly 80 percent of consumers have used, or know someone who has used, cannabis, and that a similar percentage understands that cannabis health products can offer benefits. About 75 percent of respondents are aware that one of the cannabis plant’s two main components is non-psychoactive, and roughly that percentage would try legal, non-psychoactive cannabis products.”

Some of the top retailers racing to keep up with CBD demand include Neiman Marcus, Abercrombie & Fitch, Vitamin Shoppe, Kroger’s, Barney’s, DSW, CVS, American Eagle Outfitters, Dick’s Sporting Goods, and even Dollar General. With demand picking up momentum, some of the key companies to keep an eye on include The Yield Growth Corp. (CSE:BOSS)(OTC:BOSQF), Canopy Growth Corporation (TSX:WEED)(NYSE:CGC), OrganiGram Holdings Inc. (TSXV:OGI)(NASDAQ:OGI) and cbdMD Inc. (NYSE:YCBD).

The Yield Growth Corp. (CSE:BOSS)(OTCQB:BOSQF) BREAKING NEWSThe Yield Growth Corp.  shared an update on the production and intended rollout and sales of select products in its Urban Juve line and its white label manufacturing operations.

Under its Urban Juve subsidiary, which develops and sells the accessibly priced Urban Juve skin care collection made of the highest quality natural ingredients, production is complete on three Face and Body mists with a new atomizer pump - delivering a better dispensing experience on the popular products, now for sale on urbanjuve.com.

Urban Juve’s alcohol-based Ultra-Nourishing Hand Sanitizer Liquid is soon to be shipped to an Amazon Canada warehouse for distribution via Amazon.ca later this month, in addition to being available for sale now at select Pharmasave locations and other retail stores, and on urbanjuve.com. All key ingredients for Urban Juve’s second hand sanitizer product, the Ultra Hydrating Hand Sanitizer Gel, have been secured for manufacturing 100,000 units, and production has been booked to coincide with receipt of packaging in early July. The sanitizer gel has received approval from Health Canada (NPN 80098154) and is listed with the FDA (NDC 75385-0010-1) and is therefore authorized for sale in both Canada and the United States, paving the way to explore distribution via Amazon.com and to urbanjuve.com’s US-based customers.

According to researchandmarkets.com, the market for hand sanitizer across the globe is expected to rise over 600% during 2020, fueled by preventative recommendations by the World Health Organization and driven by the ability of alcohol-based sanitizers to prevent infections and kill bacteria, fungi, and viruses.

“I am immensely proud of how much progress we've made on the manufacturing side of our business in the past few months, especially in light of the difficult challenges presented by the COVID-19 crisis,” says Yield Growth Chief Executive Officer Penny White. “We have applied the lessons learned from our early production runs to continuously refine and improve our manufacturing operations. The team has worked hard and pulled together to strive for increased efficiency and cost-effectiveness with every product we produce.”

Finally, Kingdom Brands is close to launching the first of several products within their men’s wellness collection under the Antler brand. Having received all packaging and ingredients, Yield Growth begins production of Antler Deodorant as a white label for Kingdom Brands this month. This long-lasting, all natural, hemp-infused and aluminum-free deodorant is especially well-suited for sensitive skin, and will be for sale both online and in retail stores.

According to a report by Future Market Insights, the global aluminium-free deodorant market is estimated at around US$1.2 billion in 2019, and is expected to grow at a CAGR of nearly 10% from 2019 to 2029.

Other related developments from around the markets include:

Canopy Growth Corporation (TSX:WEED)(NYSE:CGC) announced its financial results for the fourth quarter and full twelve-month fiscal year ended March 31, 2020. The Company is also sharing details of its new strategic plan aimed at winning in priority markets and categories and executing a path to profitability.  All financial information in this press release is reported in millions of Canadian dollars, unless otherwise indicated. The fourth quarter and full twelve-month fiscal year 2020 financial results presented in this press release have been prepared in accordance with U.S. GAAP. “Through the COVID-19 pandemic we have worked hard to ensure the health and well-being of our teams and customers and the continuity of our business.  During this time, our team has rolled out our exciting new cannabis-infused beverages and vape products in Canada and a portfolio of CBD products in the US,” shared CEO David Klein. “True to key priorities that I have outlined for Canopy, we have taken steps to align our capacity with the current market demand and focus our resources against the core markets with the largest and most tangible near-term profit opportunity.”

OrganiGram Holdings Inc. (TSX:OGI)(NASDAQ:OGI) announced that it has entered into a multi-year agreement for supply of dried flower to one of Israel’s largest and most established medical cannabis producers, Canndoc Ltd., a subsidiary of InterCure Ltd. Canndoc has been a pioneer in pharmaceutical-grade cannabis for more than 12 years. Its GMP-approved medical cannabis products are sold in pharmacies in Israel, and it holds international cultivation and distribution agreements in the European Union and Canada. Under the terms of Organigram’s supply agreement with Canndoc, the Company will provide a guaranteed 3,000 kg of high quality, indoor-grown dried flower product to Canndoc by December 31, 2021 for processing and distribution into the Israeli medical market, and may provide an additional 3,000 kg during the same time period at Canndoc’s option, subject to certain conditions. The agreement provides for a tiered pricing scheme and the exact value will vary depending on factors such as potency and product mix. The Agreement also contemplates, among other things, an opportunity for Organigram to launch branded medical products with Canndoc in the Israeli and EU markets, and grants exclusivity and related rights to Canndoc within the Israel market for a period of approximately 7.5 years. Activities under the Agreement are subject to compliance with all applicable laws, including receipt of all requisite approvals from Health Canada, the Israeli Ministry of Health, and any other applicable regulatory authorities.

cbdMD Inc. (NYSE:YCBD) reported its second fiscal 2020 quarter ended March 31, 2020 results, as well as some significant developments. “We are pleased to report strong second quarter results, as well as provide a mid-quarter update on operations. We reported $9.4 million in quarterly net sales, a 67% increase over the same quarter last year. Our gross profit margin remains strong at 67% year-to-date and 70.9% for the quarter. Our overall direct to consumer e-commerce sales for the March fiscal quarter were $6.8 million or 72% of our total net sales, an increase of $2.5 million or 58% from the prior year’s quarter. Our B2B brick and mortar sales were $2.6 million or 28% of our total net sales, an increase of $1.2 million or 85% from the prior year’s quarter. Direct to consumer e-commerce sales for the six months ending March were $13.6 million or 70% of our total net sales, an increase of $8.9 million or 189% from the prior year period. Our B2B brick and mortar sales were $5.9 million or 30% of total net sales, an increase of $4.5 million or 321% from the prior year period. Our operating expenses for the March quarter were $12.2 million, of which approximately $665,000 was non-cash expenses, resulting in a cash use of $4.2 million for the quarter. Year to date our operating expenses were $24.8 million, of which approximately $1.5 million was non-cash expenses, resulting in a cash use of approximately $9.1 million for the six months ending March 31, 2020,” said Martin Sumichrast, Chairman and co-CEO of the Company.

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