NAI500 Special Coverage: With Global CBD Legislations Solidifying, is the Industry at a Tipping Point for Investors?

Published on: March 2, 2021
Author: Amy Liu

The CBD market is soaring. No longer simply for recreational or alternative medicinal use, it has become highly pervasive in a diverse range of industries. From pharmaceuticals and consumer health products to cosmetics and food and beverage manufacturers, there appears to be a CBD product for just about everything.

CBD is not a new product. Companies like US-based HempFusion Wellness Inc. (TSX: CBD.U) (OTC: CBDHF) have been using hemp-derived CBD in various product offerings for years. However, where uneven regulatory barriers once prevented the widespread usage of cannabinoids, today’s increasing legalization is fueling a surge in its use – and providing investors the potential for significant returns.

Outlook for the Global CBD Market 

The sky’s the limit for CBD-based products and treatments. The CBD market is currently sitting at US$ 967.2 million, and some analysts predict that market value could rise an incredible 125.58%, topping US$ 22 billion by 2026, based on previous CAGR forecasts.  

However, despite all the recent talk and investor enthusiasm, many people get confused distinguishing between CBD, primarily used for its medical properties, and THC, the active ingredient in cannabis that produces a psychoactive high. While both come from the same cannabis flowers and have important therapeutic uses, CBD is non-intoxicating, increasing its appeal in a market that may be otherwise wary of accepting mind-altering drugs.

CBD is currently being studied for use in the treatment of various conditions, from neurological disorders to autoimmune diseases. And at least one CBD containing drug used to treat severe seizures has already been approved for use by the FDA. Companies are also experimenting with CBD oil in natural health and cosmetic products, from supplements to CBD oil-infused soaps and skincare products.

As the CBD market continues to soar, investors may feel that they have missed the boat. However, with the regulatory environment still rapidly changing, increased mainstream acceptance of CBD products, and new uses for this versatile cannabinoid oil continuing to emerge, logic would seem to dictate that we have only just scratched the surface of growth in this market.

“Hundreds of thousands of people have started using CBD containing products… A crazy wave of demand has assaulted the market,” wrote a recent Green Market Report. “Increasing consumer demands of the premium quality CBD edibles, for example, is expected to rise 25% CAGR by 2027.”

What does HempFusion Do?

HempFusion is a leading US manufacturer of hemp-based natural health and wellness products and one that has been attracting a lot of investor interest lately.

HempFusion started 2021 on a promising note, having just completed a US$17 million IPO and listing on the TSX. The company has said they intend to use this capital in part to fund strategic plans for future growth as well as to expand upon their existing product lines, which together currently have over 30 new products in various stages of development.

Marketed under the brand names HempFusion, Probulin Probiotics, Biome Research, and HF Labs, the company currently boasts over 48 SKUs in its product lines and has a massive distribution in nearly 4,000 US and international retail locations. Their existing offerings include CBD tinctures and various supplements to manage stress, sleep, and energy, in addition to over-the-counter topicals and skincare.

One area of particular interest is the company’s wholly-owned subsidiary Probulin Probiotics, who have capitalized on their rapidly growing market share within the probiotics industry with a recently launched e-commerce store Amazon. Commentating in a press release, CEO Dr. Jason Mitchell N.D said the launch “…provides the brand with tremendous exposure to new customers”.

Gut health is one of the fastest growing wellness segments in North America. And as Dr. Mitchell, also a naturopathic doctor, pointed out:

“70% of our immune system resides in the gut, so it’s no surprise that today, more than ever, consumers are actively researching probiotics, looking for brands they can trust to support digestive and immune health as well as overall health and wellness.”

Why Should Investors Pay Attention to HempFusion

It isn’t only the retail sector that’s getting excited about CBD-based products; HempFusion was recently selected as the sole supplier of CBD for a six-month clinical trial run by Dr. David Harnick, a well-respected board-certified cardiologist and electrophysiologist. The two-part clinical trial aims to study the effect of CBD on targeted cardiologic markers.

Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.

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