CBD Supplements Primed to Explode Ahead of Biopharma as Farm Bill Legalizes Hemp

Wednesday, September 26, 2018 General News
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NEW YORK, September 26, 2018 /PRNewswire/ --

CannabisNewsWire Editorial

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With Canada legalizing cannabis nationwide in October and the 2018 U.S. Farm Bill completely removing hemp from the DEA's controlled substances list, the stage has been set for an explosion of products

ranging from functional foods and supplements to CBD-based (cannabidiol) biopharma indications.

  • U.S. farm bill legalizing hemp could make CBD an open-pit gold mine.
  • List of demonstrable CBD health benefits growing daily.
  • CBD growth may outpace entire cannabis market combined.

Even before the landmark inclusion of the Hemp Farming Act of 2018 in this year's Farm Bill, plant-based nutrition experts at leading omni-direct lifestyle company Youngevity International, Inc. (NASDAQ:YGYI) (YGYI Profile) had begun marching the team towards the development of a full line of proprietary hemp-derived CBD oil products. And while the identified health benefits of CBD ranging from reducing inflammation to managing pain and anxiety haven't entirely been proven yet, one need look no further for foundational evidence of such benefits than the success of GW Pharmaceuticals Plc's (NASDAQ:GWPH) FDA-approved oral solution EPIDIOLEX, which is used to treat severe seizures associated with extreme forms of epilepsy. Pharma-grade medical cannabis producer Aphria, Inc. (OTC:APHQF) (TSX:APH) already has a wide selection of carefully engineered medical cannabis and CBD oil products made from 100 percent greenhouse grown strains. Cara Therapeutics, Inc. (NASDAQ:CARA) is another company that stands to benefit from easing regulations in North America. And as a principal investment firm dedicated to cultivating medical marijuana companies, Cronos Group, Inc. (NASDAQ:CRON) surely understands the potential of the space.

To view an infographic of this editorial, click here.

Cannabis Market Booming Amid Deregulation 

Canada moving to fully legalize recreational marijuana across the country is a watershed event for the cannabis industry. This event will help to normalize the presence of cannabis-based medicines in the broader market, paving the way for even more widespread research into the non-psychoactive cannabinoid CBD. With more than 37 million people in North America already consuming cannabis in one form or another, even the lofty projections by Amadee & Company of a market worth over $95 billion by 2026 may be entirely possible.

After more than eight decades of prohibition, cannabis is rapidly heading towards decriminalization across the global marketplace. The latest projections from established cannabis sector analysts at Arcview Market Research and BDS Analytics indicate that the North American cannabis market will go from just $9.2 billion last year to $47.3 billion within a decade (17.79 percent CAGR), even as the global market surpasses a whopping $57 billion.

The hemp-CBD segment is set to grow at an even faster pace according to Brightfield Group, hitting upwards of $22 billion by 2022, outpacing the rest of the cannabis market combined. Hemp Business Journal estimates for the underlying hemp market, which grew 16 percent last year in the United States alone to around $820 million, are similarly encouraging, projecting the market to grow around 700 percent by 2020.

And when it comes to regulating the human body's complex endocannabinoid receptor systems, the upper limits of the pharmaceutical value of CBD - and other phytocannabinoids such as THC - may have not yet been fully validated by clinical studies. Such studies have been and are being done.

Consumers definitely seem to have got the message about CBD and are already enjoying access to this organic compound in an increasing variety of formats. According to Cannabis Trades Association UK official data, cannabis oil users across the UK doubled last year. Given stats like that, it is little wonder that the latest numbers out of Technavio on the global CBD space project a 39.19 percent CAGR through 2021.

Established Supplement Purveyor with Scale, Presence and Reach 

To many investors, the burgeoning CBD market is a natural play for a company such as Youngevity International, Inc. (NASDAQ:YGYI), a multivertical lifestyle brand that provides a wide variety of consumer goods to people all over the world via direct selling, e-commerce and social selling. In many circles, the name Youngevity is synonymous with plant-based nutrition, and as Youngevity CEO Steve Wallach recently put it during the launch of YGYI's new proprietary HempFX™ line of hemp-derived CBD oil products, "CBD oil perfectly complements" Youngevity's product development philosophy.

Already known to consumers around the globe for its broad array of nutritional and healthy lifestyle products formulated using ingredients of the highest quality in state-of-the-art laboratories, ?Youngevity has garnered increasing prominence with the success of its wholly owned subsidiary CLR Roasters' various gourmet boutique coffee blends. CLR Roasters is produced by a vertically integrated "farm-to-cup" pipeline stretching from the company's fully licensed fields in Nicaragua, through a state-of-the-art roasting facility in Miami and ending up in consumer's coffee cups all over the world. YGYI completes the last mile via direct selling, as well as extensive distribution in the cruise line industry and through a variety of private labels that the company produces for major national chains.

As Goes Coffee, So Goes Cannabis 

Just to showcase the kind of scale and sophistication of the company's closed-loop approach to delivering premium organic coffees, it is worth noting how the company recently secured a five-year contract to sell and process more than 41 million pounds per year. This was a huge deal for the full-sized coffee roaster, executed with a purchaser that has more than seven decades in the business and is a major coffee importer and exporter for some of the biggest brands in the industry today.

It is this same kind of full-spectrum approach to cultivation, production and distribution (emphasizing tight quality control as the main objective) that the company is now bringing to the hemp-based CBD business with its "field-to-finish" strategy. The HempFX line of three initial products was described as "just the beginning" when it comes to Youngevity's move into CBD, during a recent interview with Wallach and Youngevity president and CFO Dave Briskie.

HempFX products currently include a topical muscle restoration and relief product packed with antioxidant rich botanicals called Soothe, a mood and cognitive performance enhancement product with St. John's Wort called Uplift, and a sleep aid called Relax that contains melatonin and other relaxing herbs including chamomile and valerian root. Youngevity anticipates emergent revenue opportunities across the vertical as it implements a model similar to what the company has done in coffee. Wallach was keen to point out during the HempFX launch that this process would offer "tremendous advantage" to the company's many distributors around the world.

Youngevity's management anticipates that hemp-based CBD will become one of the fastest growing and largest supplemental ingredients moving forward, and the company is not alone in recognizing just how far the CBD market has yet to go.

CBD Market Solid Move for Future Success 

GW Pharmaceuticals Plc (NASDAQ:GWPH) has been posting solid price performance since the company's announcement in late June that the FDA approved its CBD-based oral indication Epidiolex for two forms of severe childhood epilepsy. According to the latest quarterly report, GWPH and its U.S. subsidiary Greenwich Biosciences are primed for commercial success, with a fully recruited sales organization and active engagement via clinical presentations to plans which cover more than 80 percent of the U.S. market.

Aphria, Inc. (OTC:APHQF) (TSX:APH) is gearing up for Canadian legalization big time, signing supply agreements with official distributors throughout all ten provinces and one territory this month to provide high-quality, branded cannabis for the adult-use market. Aphria also recently announced a key MOU with Canadian biotech Rapid Dose Therapeutics, the developer of the oral, fast-dissolving drug delivery system QuickStrip,.

Cara Therapeutics, Inc. (NASDAQ:CARA) is a clinical-stage biotechnology company focused on developing new chemical entities designed to fundamentally change the way acute pain, chronic pain and pruritus (severe itching) are managed. Cara does this by developing new products that selectively target the body's peripheral kappa opioid receptors. In the cannabis space, Cara has a cannabinoid receptor agonist, CR701, in preclinical development.

Cronos Group (NASDAQ:CRON) recently announced commencement of a joint medical cannabis study alongside Aleafia Health Inc., which will utilize Aleafia's Canabo Medical Clinic network to investigate insomnia and daytime sleepiness. The primary goal of the study is to help develop nonaddicting and natural sleep aids that many consumers have been longing for, especially given more recently identified risks associated with prescription sleeping aids, such as worsening mental health and an increased prevalence of dementia. CBD and THC may become powerful tools in the fight against insomnia.

The End of Prohibition, Unprecedented Market Dynamics 

It seems that consumers may have put legs under the market as the historic prohibition of the humble cannabis plant nears an end. A plant that turns out to be packed with phytocannabinoids and that may help naturally regulate a vast cell receptor network throughout numerous tissue systems in the human body seems poised to fuel an industry with untold possibilities.

For more information about Youngevity International, please visit Youngevity International, Inc. (NASDAQ:YGYI).

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