CannabisNewsWire
Editorial Coverage: Following the passing of the 2018 Farm
Bill, CBD sales have continued their massive growth in the United
States and beyond.
- Cannabidiol (CBD), a chemical found in cannabis, has seen a
huge growth in sales over the past few years.
- CBD can be derived from hemp, and the passing of a new farm
bill in the States makes this form of cultivation legal at a
federal level.
- This forms part of wider growth in the cannabis market, as
companies expand their operations in North America and even
beyond.
Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF)
(WLDFF
Profile) is among the companies benefiting from this
market, with an increase of more than 300 percent in online sales
for its CBD products last year. Some companies are specializing in
particular niches, such as The Green Organic Dutchman
(OTCQX: TGODF) (TSX: TGOD) with its focus on sustainable
organic plants. Aurora Cannabis Inc. (NYSE: ACB) (TSX:
ACB) is making moves into Europe, with cannabis oil sales
in Germany and investment in a Portuguese grower. Green
Growth Brands Inc. (OTCQB: GGBXF) (CSE: GGB) is launching
new products and opening its own shops across the United States.
And HEXO Corp. (NYSE: HEXO) (TSX: HEXO), which
recently expanded from medical cannabis into the recreational
space, has seen gross revenue increase more than 1,000 percent as
part of this rising tide.
To view an infographic of this editorial, click here.
CBD Drives Growth for Hemp
Hemp, a plant that has long been out of the public eye, is
returning to the spotlight in a big way. A non-intoxicating form of
cannabis, hemp was primarily used for centuries as a natural source
of fibers, which were used in cloth, rope and even building
materials. Many ships in the great age of sailing relied on hemp
for their riggings.
But in the sweeping anti-drug crusades of the 20th century, hemp
became caught up in attacks on cannabis. Campaigners who were
determined to save consumers from their own pleasures had cannabis
outlawed at a time when there was little effective way of
distinguishing between hemp and other forms of cannabis. No longer
needed for cloth and rigging, hemp was made illegal.
Now all that has changed — nowhere more dramatically than in the
United States of America.
The Farm Bill
Hemp is making a comeback thanks to the growing popularity of
cannabidiol (CBD), an active ingredient found in many forms of
cannabis. It’s an ingredient that companies such as Wildflower Brands Inc. (CSE: SUN) (OTCQB:
WLDFF), a creator of plant-based health and wellness
products, have been making extensive use of in recent years.
Combined with other naturally occurring plant compounds,
full-spectrum CBD is used in a range of Wildflower products,
including capsules, topicals,
soaps, tinctures and vaporizers.
Until recently, the production of CBD in the United States faced
serious restrictions and uncertainties. Many states had legalized
the production of cannabis in some form, either for medical or for
recreational use. In addition, there were licensed trials of the
cultivation of hemp, which can be rich in CBD. But all of these
plants were illegal at a federal level, meaning that even with
state-level approval, cultivators faced financial limitations and
the threat of government action.
All that changed in December with the passage of the 2018 Farm
Bill. One of a regular series of bills governing the U.S.
agricultural sector, this bill removes
hemp from the list of controlled substances, making it
unambiguously legal for farmers to grow hemp. This changes the
landscape for CBD products in the States. Companies such as
Wildflower, which has already got its products into many outlets in
the health and wellness sector, will be able to expand their reach
even further.
States have the right to set their own rules around restricted
substances, and some states have taken an unsympathetic attitude to
CBD. The Farm Bill doesn’t force states to change this attitude,
but there are already signs that public opinion on all levels are
changing. The regulations in many states assume adherence to the
federal guidelines, and some states, such as Alabama, have already
softened their stance since the Farm Bill became law.
Under the Farm Bill, hemp production will
be tightly regulated. Most states already have existing
regulations in place, and the U.S. Department of Agriculture will
be developing its own regulations as well. But for an established
company such as Wildflower, which already works in California,
Washington and New York, this shouldn’t be a problem. Cannabis
companies are accustomed to working in a tightly controlled
environment and meeting the legal standards set by state
legislators, as well as the product standards required by retail
outlets. In that context, working within new federal regulations
shouldn’t present a significant challenge, while the existence of
consistent national standards will create opportunities for
growth.
CBD Demand Grows
The Farm Bill has been driven in large part by the growing
demand for CBD. An obscure and seldom discussed chemical a decade
ago, CBD has emerged as an important consumer product. The gradual
legalization of cannabis and research into its medical effects drew
attention to the fact that those benefits were not all related to
THC, the psychoactive chemical that gets cannabis users high.
Identified as a chemical with great potential for health and
wellness, CBD has started to be marketed in its own right and is
used in products such as the Wildflower Wellness
line.
Public interest in CBD has grown seemingly from nowhere. Tapping
into interest in both cannabis and natural remedies, and offering
treatments that may succeed where others have failed, CBD sales
have soared. Hemp-derived CBD
alone was a $390 million market in 2018 and is expected to
reach $1.3 billion by 2022. And that doesn’t even include all the
CBD products derived from other forms of cannabis.
The results for producers have been staggering. Wildflower saw
its online sales grow by more than
300 percent in just nine months in 2018. In response, the
company opened its first New York retail store, a sure sign of a
product’s popularity in an age when so many companies are shedding
their brick-and-mortar presence.
Looked at globally, CBD is in even better health. The
Brightfield Group has estimated that CBD’s
value will reach $5.7 billion this year and $22 billion by
2022. While research on the topic is still in its infancy,
there is growing evidence that CBD could be used to treat a number
of ailments, including certain extreme forms of childhood epilepsy.
Even the United Kingdom, a country whose government remains
staunchly opposed to the legalization of cannabis, has allowed the use of a CBD drug for this purpose.
Companies producing and selling CBD products are springing up
across North America, Europe and beyond. Demand is growing,
especially among millennials. That’s bolstering the impressive
sales of companies such as Wildflower and putting pressure on
politicians to further liberalize the laws around hemp.
Making the Most of a New Market
A lot of companies are now making the most of the growing
popularity of cannabis, CBD and hemp.
Given the crossover between liberal attitudes on drugs and an
interest in protecting the environment, it’s hardly surprising that
specialist companies have arisen that grow organic cannabis. One of
these is The Green Organic Dutchman (OTCQX: TGODF) (TSX:
TGOD), which announced last year that it had signed a
definitive agreement to acquire 100
percent of the issued and outstanding shares of privately held
HemPoland in an immediate accretive cash-and-share transaction. The
move gives Green Organic Dutchman access to HemPoland’s vast
distribution network, premium Cannabigold brand, and
state-of-the-art hemp oil extraction technologies, as well as
providing a strategic pathway into the European market for TGOD’s
medical and recreational products and licensing deals.
Canada is at the forefront of cannabis legalization, as one of
the early adopters of medical cannabis and the first G8 country to
legalize its recreational use. As a result, the country has
developed several large cannabis companies, including
Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB).
Aurora has an eye on the global market for cannabis and CBD,
recently agreeing to acquire a 51 percent interest
in a Portuguese cannabis company, as well starting sales of
cannabis oil in German pharmacies.
Like Green Organic Dutchman, Green Growth Brands Inc.
(OTCQB: GGBXF) (CSE: GGB) is leaning into the hippy image
of cannabis through a brand that places an emphasis on health,
wellness and happiness. The company is doing well with the
continuing CBD craze and has recently announced the opening of CBD shops in malls in Indiana and
Tennessee. The company has also formed an agreement with
another company to work on CBD-infused personal care products, as
CBD product ranges diversify.
A leading cannabis producer, HEXO Corp. (NYSE: HEXO)
(TSX: HEXO) has expanded its interests to include the
recreational as well as the medical market. Focusing on cannabis’s
place in the wider market, HEXO was the first cannabis producer to
join Food & Consumer Products of Canada, a group representing
the Canadian food, beverage and consumer products industry. This
comes as the company announced a 1,269 percent
increase in gross revenue compared with the same quarter a year
before, growth exceeding even the impressive performance of the
wider cannabis market.
The changing legal status of CBD and the popularity of its
products is just one part of a wider picture of cannabis growth, a
picture that appears to be bright and promising for companies
establishing a stronghold in the industry.
For more information on Wildflower Brands, visit Wildflower
Brands Inc. (CSE: SUN) (OTCQB: WLDFF)
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