CBD is improving health and driving the cannabis industry. Know more about its health benefits and opportunities for CBD-based companies.
When five-year-old Charlotte Figi was approved for a medical marijuana card in 2013, she became the youngest ever marijuana patient. Each week, Charlotte was suffering through more than 300 seizures, with some lasting between two and four hours.
Her parents had tried everything. Everything but CBD, also known as cannabidiol. CBD is a prominent chemical in cannabis that’s used to treat cancer, diabetes, multiple sclerosis, schizophrenia and a laundry list of other life-debilitating ailments.
“When she didn’t have those three, four seizures that first hour, that was the first sign,” Paige Figi recalled in a CNN special with Dr. Sanjay Gupta, after giving her daughter a few drops of CBD oil with her food. “And I thought well, ‘Let’s go another hour, this has got to be a fluke.'”
It wasn’t. Charlotte’s seizures were all but eliminated, from 300 a week to only a few a day.
One year after the world found out about how CBD dramatically improved Charlotte’s life, the waiting list for the CBD products that treated her seizures had reached 12,000 families. Researchers in Israel found that 89 percent of children studied with treatment-resistant pediatric epilepsy like Charlotte saw a reduction in seizure frequency. Her story helped pave the way for CBDs to enter the mainstream conversation about the impact medical marijuana can have, and for CBD companies to begin sprouting up in numbers.
What is CBD?
CBD is a natural chemical derived from cannabis, and is second only in average volume to THC (Tetra-Hydro-Cannabinol). It’s also a big reason why the cannabis industry is on track to reach $21 billion by 2020. Cannabis has as many naysayers as advocates, but there’s hard proof that CBD has a prominent future in the global healthcare markets. Here’s why.
When consumed, CBD boosts an integral part of our immune system called the Endo-Cannabinoid system. A 2013 review published in the British Journal of Clinical Pharmacology showed that studies found CBD to possess anti-emetic (reduces nausea), anti-convulsant (suppresses seizures), anti-psychotic, anti-oxidant, anti-cancer, anti-depressant and anti-inflammatory properties. CBD provides relief from an array of ailments, including Crohn’s disease, diabetes, schizophrenia, PTSD, insomnia, multiple sclerosis, epilepsy, breast cancer, lung cancer and colon cancer.
The American Association for Cancer Research found that CBD destroys breast cancer cells through programmed cell death. CBD has also been demonstrated to inhibit or stop the growth of cancers in the liver, brain, skin and adrenal glands.
Relief without the high
Patients won’t get high from CBD alone — it’s the combination of CBD/THC that gives users that high feeling associated with cannabis, one of the reasons why CBD-only products have become so sought after by the medical community.
CBD decreases the negative effects that come from THC, such as anxiety, paranoia and short-term memory loss. As the cannabis industry expands to reach new consumers, especially those turned off by the negative effects of THC, the powerful CBD chemical will play an important role. CBD derived from hemp rather than cannabis is free of association with THC.
This is especially true for pediatric and geriatric patients who need the medicinal benefits cannabis provides without the high sought by recreational consumers.
In Canada, seniors are the fastest-growing demographic in medical cannabis. Multiple studies show that cannabis can reduce reliance on certain medications that have negative side effects, contradictions and the potential for addictions. For many of the common diseases and ailments afflicting seniors and children, CBD oils and edibles are a safe alternative to treating symptoms.
Wide market of opportunity for CBD-based companies
CBD can be derived from both hemp and marijuana. CBD that is higher in THC (marijuana) can be sold only where marijuana is legal. CBD that is low in THC (hemp) can be sold in most states and online.
The Hemp Business Journal estimates that the CBD market will grow to a $2.1-billion market in consumer sales by 2020, with $450 million of those sales coming from hemp-based sources. That’s a 700-percent increase from 2016.
In 2015, the market for consumer sales of hemp-derived CBD products was $90 million, plus another $112 million in marijuana-derived CBD products that were sold through dispensaries, bringing the total CBD market to $202 million.
Matt Karnes of Greenwave Advisors, an analyst firm specializing in legalized cannabis, is even more optimistic about the growth of CBDs. He estimates a $3-billion market by 2021.
“The benefit of investing in a cannabis company that features a line of CBD products in its portfolio is primarily the additional revenue stream,” said Erick Factor, executive chairman of Canada-based MYM Nutraceuticals (CSE:MYM), a CBD manufacturing and distribution company. But it also offers an early foothold into emerging global markets.
Countries around the world have varying degrees of tolerance with respect to cannabis products, Factor pointed out; however, non-psychoactive CBD products are widely accepted and governments are increasingly approving legal sale and distribution. Companies with such products in their portfolios have greater potential to enter as many geographic markets as possible. “As restrictive cannabis laws begin to ease, companies such as MYM will be ready to capitalize on these relationships with products that contain THC,” he added.
Diversity of market segments
Since CBD has anti-psychotic properties, it is legal for sale across the continent when containing less than 0.3 percent THC. According to Headset Research data, in Washington state alone there are more than 800 CBD products in the marketplace.
CBD oil comes in various concentrations and forms, including liquid oil or oil as a thick paste, oil in capsules, sublingual tincture drops or sprays, salves for topical use, edibles as in candy, chocolate bars or gum, and CBD vapor from vaporizers. It can also be taken through the skin via lotions, balms, creams and patches.
“As cannabis is essentially a commodity, a good CBD company will have proprietary delivery systems and patents on innovative methods for using CBD products,” said Factor, the founder of the Vancouver-based Westcoast Medicann dispensary. “A reputable team of experienced cannabis-educated staff with laboratory-tested products is essential.” CBD companies with limited product lines and too much exposure to one geographic location should be a red flag for investors, he added.
MYM Nutraceuticals has a line of 21 products for sale under its HempMed brand, which targets the dispensary market and is expected to hit $2 million in sales in 2017. In Q4 2017, the company plans to launch its Joshua Tree CBD line targeted at the mainstream health markets in both Canada and the US. The line is projected to reach more than $4 million in sales in 2018.
A new breed of products — for pets — is the latest market segment on the scene and is considered the growth category to watch in 2017. An ongoing study at Colorado State University is looking at CBD as a treatment for epilepsy and osteoarthritis in dogs. CBD products for dogs can be sole in the form of tinctures, sprays and edible treats. MYM’s Dr. Furbaby line will launch in 2017 in Canada and the US.
Companies have also begun exporting CBD products to the largely underserved international market. CBD hemp oil was recently made legal in Japan, where 127 million consumers, and the world’s third-largest economy, welcomed CBD with open arms. Naturally Splendid (TSXV:NSP), a Canadian hemp-based biotechnology and consumer product company, had distribution of its CBD product line approved by Japanese regulators in October 2017.
Mexico legalized the use of cannabis oil and other cannabis derivatives for medicinal purposes in June 2017, and companies such as ICC International Cannabis have already begun entering presale agreements for the sale of CBD oil.
With the medical community, legislation and public sentiment on its side, CBD is making a strong case to be not only the most beneficial component of the growing cannabis industry, but with a low barrier of entry into subsegments and international markets, it could also be the most lucrative for investors.
This article was originally published by the Investing News Network in 2017.