Cannabidiol, referred to as CBD, is a chemical compound that occurs in hemp, a close relative of the cannabis plant. Unlike marijuana, it does not have the same psychoactive properties, so it will not give users high. Instead, CBD offers a wide range of health benefits, from reducing anxiety to relieving pain and improving sleep. About 64 million Americans have already tried CBD, according to Consumer Reports.
As the cannabis sector grows and CBD becomes more and more mainstream, a large number of beverages, food and cosmetics industries enter the market. The American Natural Products Association reports that more than 1,500 CBD-related products have been released in the past three years.
The result: the CBD sector has the potential to become a $ 22 billion company by 2022, according to research firm Brightfield, focused on Cannabis. Three companies from different corners of the CBD market seem to be in a position to fly high:
1. GW Pharmaceuticals
The shares of GW Pharmaceuticals (NASDAQ :), currently the only FDA-approved drug derived from CBD, have jumped nearly 83% this year. The stock closed Wednesday at $ 177.99, giving it a market capitalization of around $ 5.5 billion
GW Pharmaceuticals Daily Chart
The biotech company performed better than expected on May 6, when the sale of its epidermisileptic anti-epilepsy Epidiolex drug, approved by the FDA in June 2018, exceeded forecasts.
In the three months ending March 31, the company generated revenue of $ 39.2 million, achieving a whopping 1,200% of $ 3 million in revenue from the same period a year earlier. Epidiolex – the medicine behind the company's sales increase – had sales of $ 33.5 million in the first quarter, more than doubling the consensus forecasts of $ 16 million
GW also reported positive phase three test results for the drug in the treatment of an even rarer form of epilepsy. The company plans to submit an additional application for approval by the FDA in the fourth quarter of 2019.
The UK-based healthcare firm also announced that Epidiolex will launch in five major European markets by the end of the year, a development that could see sales increase significantly in the coming years
2. Molson Coors
Molson Coors (NYSE :), became the first large beverage company to enter the CBD area when it announced plans to develop CBD drinks in August 2018.
The Denver-based brewer established a joint venture with Canadian cannabis grower Hexo (NYSE :), (TSX :), to establish a partnership "to pursue opportunities for the development of non-alcoholic , cannabis-soaked drinks for the Canadian market. "The joint venture, known as Truss, sees that Molson has a majority stake of 57.5%, while Hexo owns the rest.
That makes the North American beer giant well placed to take a meaningful share in the Canadian CBD soft drink market when edibles and infused drinks become legal there on October 17. The market for CBD drinks in Canada is estimated at around $ 2.2 billion. , according to Mark Hunter, president and CEO of Molson Coors.
According to recent estimates, the market for cannabis drinks in the United States is estimated to be worth $ 1.4 billion by 2024. In its current form, the US Food and Drug Administration (FDA) prohibits the addition of CBD to foods and beverages, although attempts to reschedule the chemical compound as a legal dietary supplement have recently gained momentum
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The shares, which closed last night at $ 57.43, have so far risen by around 3% this year
3. Ulta Beauty
In mid-March, Ulta (NASDAQ :), one of the most popular retailers in the United States, announced plans to wear a variety of CBD-infused skin care products for the first time
The cosmetic giant currently offers five Cannuka products that combine CBD with manuka honey online and in all stores except Nebraska, Idaho and South Dakota, where CBD is still banned. The products are aimed at both men and women.
The shares of the cosmetic giant, which rose by around 38% in 2019, ended yesterday at $ 337.48, not far from a high point of $ 359.69 ever reached on April 17.
Despite the strong profit achieved since the beginning of the year, the stock market seems to be subject to further appreciation as more and more consumers are turning to CBD-infused wellness products. Jefferies analysts estimate that CBD's beauty market could reach $ 25 billion over the next ten years, accounting for 10-15% of the global skincare market.
