Multi Billion-Dollar ‘Market’ For CBD Is Actually Many Markets

Multi Billion-Dollar ‘Market’ For CBD Is Actually Many Markets
Multi Billion-Dollar ‘Market’ For CBD Is Actually Many Markets

CBD sales in the U.S. have been steadily soaring. But in a recent Seed Investor article (5 Big Drivers Of CBD Demand In 2020), we explained why CBD sales are poised for an even bigger explosion in consumer demand this year.

One CBD company positioned to capitalize on this trend is CanaFarma Hemp Products (CAN:CNFA / GER:WKN A2P0WJ). More on this opportunity later.

U.S. sales of CBD products reached $1.8 billion in 2018 according to Arcview/BDS Analytics (final numbers for 2019 aren’t yet available). This allowed CBD to become the #1 herbal dietary supplement in the United States in 2018 through “natural & health food channels”, according to the Nutrition Business Journal.

In its December 2019 report, Arcview/BDS Analytics projects U.S. CBD sales to reach over $20 billion by 2024, broken down as follows:
  • $12.6 billion in general retail sales
  • $5.3 billion in dispensary sales
  • $2.2 billion in pharmaceutical sales

One consumer product, many markets

The “CBD market” is not one market. Rather, CBD-based consumer products are penetrating many different sectors. Data from the Brightfield Group shows the breadth of the total consumer demand for CBD products.
  1. Topicals (primarily for pain relief)
  2. Skin care/beauty products
  3. Edible products, including: baked goods, confectionaries, and beverages
  4. Oil cartridges/vaping
  5. Other medicinals (tinctures and capsules)
  6. Pre-rolls and dried flower
  7. Pet-care products

Indeed, it’s because of the huge array of CBD products already on the market that skeptics have labeled CBD as just another consumer “fad”. Such a criticism is founded in ignorance.

Cannabidiol (or “CBD”) is a cannabinoid. Cannabinoids are the active ingredients found in both the cannabis plant and the hemp sub-species.

The human body naturally produces our own cannabinoids (endocannabinoids). We now know these cannabinoids are essential in regulating virtually all aspects of human health.

Armed with these facts, it’s easy to see how and why CBD products are penetrating consumer markets in numerous different sectors. A boatload of celebrities (actors, athletes, and other entertainers) enthusiastically tout CBD consumption.

Healthy people use CBD products to become healthier. Those with health issues consume CBD products to seek to alleviate these issues.

The first licensed and approved CBD-based pharmaceutical products are now being sold. Many more of these pharmaceutical products are in the R&D pipelines of cannabis biopharma companies. CBD is real medicine.

Consumers with a vast and diverse array of health issues are buying CBD products.

CanaFarma Hemp Products is taking a slightly different approach in capitalizing on the massive consumer demand for CBD in the United States.

Full spectrum hemp oil

Its focus is on “full spectrum” hemp oil and hemp oil-derived products.

The cannabis plant, including the hemp sub-species, contains roughly 100 known cannabinoids. CanaFarma’s whole-plant hemp oil products provide the full spectrum of these cannabinoids, but with near-zero THC content (legally, hemp must contain 0.3% THC or less).

The Company’s hemp oil product line – marketed under the brand name “YOOFORIC™” – also offers consumers nutritional benefits: vitamins and other nutrients.

Specifically, YOOFORIC™ hemp oil products are a rich source of the essential Omega fatty acids. These products contain Omega-3 and Omega-6 fatty acids in the ideal 3:1 ratio.

YOOFORIC™ hemp oil products are produced directly from CanaFarma’s own CBD-rich (>14% CBD content) hemp farm, certified organic cultivation.

The Company’s flagship product is YOOFORIC™ (hemp oil-infused) Chewing Gum. YOOFORIC™ gum offers consumers more than just an appealing delivery mode.

CanaFarma’s patent-pending technology maximizes absorption (“bioavailability”) of both CBD and all these other cannabinoids and nutrients.

More health/nutrition benefits than stand-alone CBD products. Better bioavailability than competing products.

YOOFORIC’s full spectrum hemp oil is also available in pure liquid form, 100% organic, non-GMO and gluten free.

CanaFarma’s aggressive marketing strategy centers around its direct-to-consumer retail.

From June 2019 (when distribution of YOOFORIC™ commenced) through January 2020, CanaFarma has already generated revenues of nearly $3.5 million (source: CanaFarma Prospectus, February 27, 2020, SEDAR).

Investors wanting to cash-in on the CBD boom in the United States have many different markets and companies from which they can choose.

However, in 2020 consumers are more health-conscious than ever, for obvious reasons. In this environment, CanaFarma’s full-spectrum, organic, nutrient- and CBD-rich YOOFORIC™ hemp oil product line is poised to outperform.

[Editor's note: The article originally incorrectly stated that CanaFarma's products were already being sold by major retailers. In fact, all revenues currently come from Direct-to-Consumer marketing.]

DISCLOSURE: CanaFarma Hemp Products is a client of The Seed Investor.

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