CBD Product Investment Opportunities ?

[frayne]

I was recently reading an article in a health magazine where CBD sales forecasts (Brightfield Group) are expected to exceed $23 billion by 2022. Currently CBD product sales are at $5 billion for 2019, forecasted to be $10 billion in 2020 and going up from there. Just wonder if anyone of this sage group has looked into investing opportunities in the way of a CBD type fund, ETF, index fund or even promising individual stocks ? Thanks in advance for any and all replies.

Full disclosure, I have used some CBD products with varying degrees of success but am by no means sold on it as a panacea some are making it or are marketing it to be.

 

[MuirWannabe]

Great question. I look forward to others responses.

It does seem like CBD helps everything, if you listen to the hype. Anxiety, addiction, depression, joint pain, etc. I would love to believe it can help with addictions and some mental illnesses like anxiety. What I’m waiting on is more definitive testing results. And I’m wondering why such testing has been lagging. Makes me suspicious. But at the same time I am hopeful.

Seems like an amazing investment opportunity if real.

 

[OldShooter]

Without knowing the price, there is no way to know whether there is investment opportunity or not. Typically, "fad" type companies get bid up to far beyond their economic value leaving only the "greater fool" theory to rationalize purchase. There are "fad" stock success stories of course, but far more that ended badly.

Without doing the research, I'd bet that the total revenue projections of all the CBD companies would compare favorably with the GDP of California.

 

[harllee]

I, DH and my mother have been using a CBD creme for arthritis with very good success. Maybe a good investment, but you need to be sure the company is one that has products that actually has a lot of CBD. No regulations.

 

[HFWR]

I prefer some THC-A with my CBD...

 

[MRG]

I prefer some THC-A with my CBD...

+420

 

[COcheesehead]

My business touches on this world. My personal experience is that the industry is getting very, very crowded, regulations change often, players come and go. Lots of money will be made and even more will be lost. If it were me, right now, I would stand to the side for awhile and see who emerges.

 

[cbo111]

I prefer some THC-A with my CBD...

+1

 

[Bamaman]

Everybody and their uncle is selling CBD. And without standards and regulations, not all CBD oils are created equal.

It does a great job for my wife's ailments and she's easier to live with. But she's gone through 6 or more processors of the stuff to find one that works great--and tastes great.

If the profits get too big, it's just a matter of time until state governments stick their nose into CBD and tax it. They're already watching growers extremely close to make sure their products are organic and free of pesticides and watching for illegal marijuana to be mixed in with the hemp. And at one point, look for Big Pharma to get into processing, etc.

Right now, the states approve growers, and not every farmer is having successful and profitable crops. It seems tobacco farmers' land and resources works best growing the stuff. There's one grower in East Tennessee with 1,000 acres planted, and that's more than the rest of the state combined. The trick is having someone to sell the crop to that's going to do a good job processing it into many, many different products.

 

[MRG]

My business touches on this world. My personal experience is that the industry is getting very, very crowded, regulations change often, players come and go. Lots of money will be made and even more will be lost. If it were me, right now, I would stand to the side for awhile and see who emerges.

+1
I have no business interests but consume CBD+THCA. I went to the medical dispensary today next to the recreational dispensary, both sell CBD products with or without THC. On the ends of this small plaza were two other establishments selling CBD only products. Lots of different providers of the same thing.

There's going to be more regulations and consequences of bad decisions. The recent vape crisis is an example of what could go horribly wrong.

 

[HFWR]

With zero actual experience, but I have a funny feeling that CBD is this year’s essential oils...

 

[harllee]

With zero actual experience, but I have a funny feeling that CBD is this year’s essential oils...

Don't knock it till you have tried it. For those of us with arthritis it is a blessing. Ask my 90 year old mother. Before CBD creme she had wrist arthritis so bad she had to wear a splint--now with CBD creme no pain and no splint. Could be all in her mind but I doubt it --whatever it is working for mother and me and DH and my neighbor, my good friend, etc etc.

 

[Aerides]

I'd probably steer well clear, unless a small gamble, because so much is unknown, unproven, and unregulated.

I know many swear by it, and I'm sure there's some benefit. But if the FDA gets involved (and they'll have to at some point), it could very much impact these "companies."

 

[MRG]

Don't knock it till you have tried it. For those of us with arthritis it is a blessing. Ask my 90 year old mother. Before CBD creme she had wrist arthritis so bad she had to wear a splint--now with CBD creme no pain and no splint. Could be all in her mind but I doubt it --whatever it is working for mother and me and DH and my neighbor, my good friend, etc etc.

It helps my dog's arthritis too. I don't think he's expecting CBDs to help him.

I'm not sure why anyone would be sceptical of CBD or THC for pain issues. Look at most pre- cannibis prohibition cough syrup, pain meds, or tonics. and most contained amounts cannabis indica.

 

[OldShooter]

I, DH and my mother have been using a CBD creme for arthritis with very good success. Maybe a good investment, but you need to be sure the company is one that has products that actually has a lot of CBD. No regulations.

With respect, I think many folks here are mixing up two very different things.

Suppose you went to the grocery store one day and found a display of the most wonderful pears you had ever seen. Hand polished, wrapped in gold tissue paper, and individually boxed. $100 each. Would you buy? Probably not.

The point is, of course, that no matter how wonderful these businesses may be, their potential as investments is a totally different question. In addition to price, there are all the business risks that others here have pointed out. Low barriers to entry (hemp is a weed, after all), overcrowded market, uncertain regulatory environment, etc. Historically this kind of situation is a playground for hucksters, further increasing investment risk.

Personally, my guess is that if CBD does turn out to be A Good Thing, existing cosmetics companies will move in with their massive financial resources, low cost manufacturing, and huge distribution networks, leaving almost all of the early movers in the dust. Possibly one or two of them will be lucky enough to establish brand names that enable them to survive in the marketplace, but when the big guys arrive they will control the pricing and can survive on margins that will tank the little guys. So without even looking at stock prices or the effectiveness of the products, I don't this kerfluffle as likely to be any kind of investment opportunity. YMMV of course.

 

[ATX78701]

+420

I see what you need there. Well played!

 

[Ducati52]

I own a couple of Canadian cannabis stocks (Canopy and Aurora) and one CBD (Charlotte's Web). Very small positions. Expect a ton of volatility (15% moves up or down on no public news isn't uncommon) and the potential of loss. My CWBHF position, for instance, is down 50%. And it's the only one of the three that actually has earnings!

CBD's only proven (FDA approved) medical benefit is in the treatment of symptoms of two forms of epilepsy. All other benefits are anecdotal, and the FDA has fined several CBD companies for making false health claims.

CWBHF is by far the market leader in CBD, and obviously I think there's some long-term potential there or I wouldn't have purchased the stock. But there's a ton of unknowns and a ton of risk, and not a lot of insight into these companies or the industry as a whole. I haven't bought in more at this price, but I might. They report earnings on March 27; expect a large jump or drop in the price of the stock immediately after that report, depending on the earnings numbers.

 

[HFWR]

It helps my dog's arthritis too. I don't think he's expecting CBDs to help him.

I'm not sure why anyone would be sceptical of CBD or THC for pain issues. Look at most pre- cannibis prohibition cough syrup, pain meds, or tonics. and most contained amounts cannabis indica.

Not at all skeptical about activated thc, and certainly many testify to the efficacy of CBD, but so far I see a fair amount of cheerleading to the effect that “it’ll cure your asthma too”, to quote Frank Zappa. You don’t really know what, if anything, is actually in it, or at what concentration or purity.

So still a skeptic, but you’ll note I’m not calling for prohibition. More caveat emptor...

 

[Lakewood90712]

Investment articles on new product fad's ? The world is fluded with cheap money to fund new businesses. The little guy ( us ) usually don't make out in these situations.

 

[Clone]

There have been many folks looking to get into the growing business. And there has been a fair amount of 'investment money' looking to sign up growers. Now that the year's harvest is complete, many of the growers that were wooed by the fast talkers find that the market for their product is fickle. Lots of excuses, lots of delays in getting paid for sales.

The concept that hemp was going to be the next miracle crop to allow farmers to get away from the evils of growing corn and soybeans seems to be following a similar path to many of the other miracle cures for the evil agriculture system. I suspect that there will be a few folks that make out ok, and some of these folks will be pressing their own oil and selling their own product. But if the product has lasting value, the larger processors will take over and economies of scale will skim the big part of the money away from the boutique operators.

I find the claims for CBD to be interesting, and would be interested in growing a small amount just for learning. But, this is similar to growing tomatoes: I am not going to make a viable business out of it! I would be very careful about investing money anywhere in the hemp business. Lots of shiny shoes salesmen making extraordinary claims, and folks with a near religious love for the product.

 

[mh]

A friend in my wed night brewpub beer klatsch works at a environmental testing company. He says he has half a mind to start his own marijuana testing company. If I won the lottery , I’d think about funding him , at least for an afternoon ... before I came to my senses [emoji1782]

 

[OldShooter]

A friend in my wed night brewpub beer klatsch works at a environmental testing company. He says he has half a mind to start his own marijuana testing company. If I won the lottery , I’d think about funding him , at least for an afternoon ... before I came to my senses [emoji1782]

An interesting thought, actually, though I am not interested in the deal.

Testing companies may be a pretty good niche. It's clear that weed will be increasingly available, hence testing will be needed. If the testing requires government credentials, obtaining credentials can be an excellent barrier to entry. Everyone has heard of Underwriters' Laboratories, which is a nonprofit that publishes standards, tests products to those standards, and audits manufacturing companies for conformance. There is another outfit, though, ETL/Electronic Testing Laboratories, that is a for-profit company that does similar testing. There may be other for-profits in this game, too, but ETL seems to be the tall dog. Will there be an oligopoly of testing labs for weed and hemp and, hence, a business opportunity? It will be interesting to see.

 

[ckelly78z]

On Tuesday, I bought a small amount of OGI shares at $2.18. This is a Canadian company that makes edibles, and addatives in the 420 market. Their ER report announced that their profits doubled, and the stock shot up to $3.14 overnight. It is currently standing at $3.26 with an extra .06 after hours trading....looking forward to next week.

 

[kgtest]

I prefer some THC-A with my CBD...

+1, w/o it has minimal effect .