The CBD market could reach 1 billion over the next three years
The American marijuana industry is booming right now. Cannabis sales in America were estimated at $ 6,7 billion last year. But another distinct cannabis market will hit the $ 1 billion mark by 2020: the CBD market
The CBD market
Hemp plants are the same sativa strains as cannabis but with a very low THC content. Hemp is the source of most of the CBD (cannabidiol) in the world market. There are of course a myriad of uses for hemp, but CBD has currently overtaken the rest of the market. Brightfield Group, a marketing research firm, estimates that the CBD market totals 170 millions of dollars in 2016 and could reach 1 billion over the next three years.
It might be hard to believe, but there is currently only one small cap stock to profit from the exponential growth of CBD: Medical Marijuana Inc. The company says that:
“It is not in the business of selling or distributing recreational or medical marijuana, directly or indirectly. And this as long as marijuana remains a substance controlled by the federal government ”.
All products from Medical Marijuana Inc. are derived from hemp. The flagship product is Real Scientific Hemp Oil (RSHO), available in three varieties. The medical subsidiary of marijuana Red Dice Holdings also markets CBD products as Dixie Botanicals in Colorado. The marketing subsidiary Kannaway from the same subsidiary sells many CBD products. One of these is 'Energy Chew', others include the hemp skincare line and vaporizers.
360 ceiling millions of dollars
The medical marijuana market cap has passed $ 300 million, making it one of the largest market caps among cannabis stocks, reports The Motley Fool. That's big enough that Medical Marijuana Inc. is the only small cap stock focused on the hemp-based CBD market.
Other competitors include CW Hemp, which markets hemp-based CBD oil under the brand name Charlotte's Web. They have about 7% of the market. CV Sciences holds a market share of 5% with the products More CBD Oil. Down by 2% for Elixinol et Hemp Life Today, which means that the market share of Medical Marijuana Inc. weakened. The rest of the market is composed of many competitors. CV Sciences, a rival of Medical Marijuana Inc., is listed on the stock market, but its ceiling is below 25 million. Isodiol International (Formerly Laguna Blends), traded on the Canadian stock exchange, has a market cap of less than 200 million.
Growth of the CBD market
Motley Fool recommends a conservative approach to the CBD from hemp market, and that includes Medical Marijuana Inc. First, the billion dollars is only a projection. Another danger to the expansion of CBD is the growing number of states legalizing cannabis. Brightfield Group predicts that cannabis manias are at risk of being threatened by recreational marijuana.
Medical Marijuana Inc. says the company is "balanced" and "well positioned for the eventual legalization of cannabis." All of its current products are already legal, which means recreational legalization will likely reduce their sales. In 2016, the company reported sales of just over $ 8 million. But with a net loss of $ 25,9 million… The inventory cost more than 38x more than sales. Motley Fool calls this an "astronomically high valuation".