There’s More To Cannabis Than The Recreational Market
It’s hard to remember that there is more to the cannabis market than recreational use and smoking. The cannabis industry has its roots in medical cannabis and that is still a driving force of value today. Today’s list highlights three company’s whose business includes, if not focuses on, the health side of the industry, an industry that is expected to grow at a high 20 to 30% CAGR for the next several years. What makes these companies more attractive is that they trade for pennies compared to their mainstream biopharma cousins.
Heritage Cannabis Completes Transformation
Heritage Cannabis is a small medical cannabis company with business in the recreational and CBD markets as well. The company recently reported a dismal quarter that belied the underlying transformation. The company transitioned from wholesales to purely branded sales over the last quarter and that has had an impact on gross revenue. The Q1 gross revenue of $1.827 million is down 54% from the previous year because of it but this will be the last quarter of difficult comps.
The company has made several acquisitions that will boost revenue and earnings and is on the brink of several initiatives paying off. Among them is an expansion into the U.S. market that includes the launch of three key medical products for the CBD and medical cannabis market. The 1st product slated for release is an AnthroCBD capsule later this month, the others are a sublingual strip and a topical cream all targeting skin conditions like eczema, psoriasis, and local pain.
“As we move forward, we expect to see continued acceleration in both our medical and recreational product divisions with the addition of Premium 5 starting to have a material effect in Canada. Additionally, with our imminent launch in the multi-billion dollar U.S. market, and continued growth from our Pura Vida and Purefarma brands we expect to be well-positioned to drive further positive results and shareholder value,” said Clint Sharples, Chief Executive Officer of Heritage.
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HempFusion Wellness, Inc Tackles The Edible CBD Market
HempFusion (OTCMKTS: CBDHF) is a health and wellness company focused on CBD products you can eat or consume. Among the 48 SKUs are tinctures, FDA-approved topicals, Dr./Caregiver product lines, and probiotics. The company just released its earnings as well delivering more than $3.82 million in revenue for 2020 or up 26.5% from 2019. Based on a recent CBD industry report the U.S. market alone is expected to grow by 65% to $25 billion over the next four years so we expect this pace to continue if not accelerate.
With its products on sale in all 50 states, HempFusion is not only a leader in the CBD market but an attractive takeover target for company’s seeking growth, expansion, or entry into the U.S. market. Shares of the stock are trading near the post-IPO low and may head lower although there is risk in that outlook. Not only is the CBD market and this company expected to grow at a robust double-digit CAGR but the market in shares of CBDHF is oversold and beamish momentum is waning.
Can-Fite Cannabis Compound Inhibits Liver Cancer
Can-Fite (NYSEAmerican: CANF) is an Israel-based clinical-stage biopharma researching small-molecule therapeutic products for treating cancers, inflammatory diseases, and other ailments. Among its many pipeline products are a range of CBD-based treatments and one has been proven in a proof-of-concept trial. The company showed that a CBD-rich cannabis fraction was able to inhibit liver cancer growth by interacting with receptors known to activate cancer cell growth. The news, surprisingly, did not move much on the news but we think they will in time. And that doesn’t take into account the company’s two main pipeline drugs, Piclidenoson and Namodenoson.
Companies Mentioned in This Article
If you are looking for the next hot growth market, a market at the intersection of multiple secular trends, look no further than the EV market. Electric vehicles. It may not sound like much, but the days of EV as a fringe market are over.
Think about this. There is an average of 90 million vehicles sold annually. That’s units, not dollars, total sales of vehicles topped $3.1 trillion in 2019, and the number is expected to grow over the long-term.
The EV market is less than 3.% of global vehicle sales, but it’s growing. EV is expected to account for more than 50% of the total auto-fleet by 2050, and that target could be reached much sooner if battery technology advances.
When it comes to the EV market, it’s a “rising tide lifts all ships” kind of market, but there are still some clear winners to focus on.