This holiday season, I’ve noticed an interesting change in the behavior of family members and friends. Marijuana edibles (candies, pastries, etc.) and consumer products infused with cannabidiol (CBD) seem to be as popular as old-fashioned Christmas cookies. To get high, Santa no longer needs reindeer.
It’s something of a shock to me when an elderly relative unwraps a marijuana brownie in front of the family hearth, but it merely reflects the changing behavioral trends in wider American society.
The combination of cannabis legalization and pandemic-induced stress has made it a very good year…for edibles and CBD products.
In particular, if you’re looking to target a promising sub-sector of the cannabis industry, consider companies involved with producing and marketing CBD. The compound is becoming a familiar household item and political trends are paving the way for its widespread acceptance.
Read This Story: Federal Pot Laws: The Times They Are a-Changin’
However, before you put your hard-earned money into a CBD venture, first make sure it isn’t a scam. As is often the case with fast-growing industries, the CBD theme is attracting fraudsters. The federal government is cracking down and if you’re not careful, you could lose your shirt.
Latest case in point: On December 22, the U.S. Food and Drug Administration (FDA) issued five warning letters to companies for selling products containing CBD in ways that violate the Federal Food, Drug, and Cosmetic Act (FD&C Act).
The FDA is getting increasingly strict about unfounded CBD claims, which is a wake-up call for CBD-related companies and their investors.
All five FDA warning letters target the illegal marketing of unapproved CBD products claiming to treat medical conditions. The warning letters address CBD products that are particularly worrisome from a public health standpoint because of the avenue of administration, including nasal, ophthalmic and inhalation.
In addition, the letters address violations relating to the application of CBD to food, and the illicit marketing of CBD products as dietary supplements. Two of the letters also address CBD products illegally marketed for pets, including a product for use in the eyes of dogs and cats. (You know a product has gone mainstream, when marketers start targeting pets.)
The FDA has previously sent warning letters to other companies illegally selling unapproved CBD products that claimed to prevent, diagnose, mitigate, treat or cure various diseases, in violation of the FD&C Act. In some cases, there were further violations because CBD was added to food, and some of the products were illegally marketed as “dietary supplements.”
Coming to a retail shelf near you…
Cannabis contains more than 100 biologically active chemical compounds, known as cannabinoids. The most commonly known cannabinoids are delta-9-tetrahydrocannabinol (THC), which produces the “high,” and CBD.
CBD accounts for up to 40% of the cannabis plant’s extract. Unlike its cousin THC, CBD doesn’t give users a buzz. Sales of CBD are fueled by claims (some of them exaggerated) that it can reap a bevy of benefits, such as reducing pain, calming anxiety, and enhancing mental focus.
CBD also happens to be one of the biggest investment opportunities you can find. Investment research group Kryptoszene recently released data showing that U.S. sales of CBD products are on track to reach $23.7 billion in 2023, a 374% increase from 2019 (see chart).
CBD is migrating into a variety of consumer product categories including food and beverages, pharmaceuticals, health, wellness, and beauty aids. Consumer and health services giants are jumping aboard the CBD bandwagon, to either develop their own products or purchase smaller CBD companies. The same is true of edibles.
Sales of cannabis-infused edibles are poised to reach $3 billion in the U.S. this year, according to a recent report from marijuana research firm New Frontier Data.
New Frontier found that infused products such as edibles and beverages accounted for 14% of total U.S. cannabis sales in 2020, the third largest category behind flower (37%) and vape (32%).
As I’ve just explained, regulators vow to crack down on marijuana hucksters. However, this scrutiny should benefit legitimate cannabis companies and products.
Genuinely effective medical marijuana treatments represent one of the greatest investment opportunities available. The key is finding well-managed companies with viable products.
The good news is, our investment team just pinpointed a highly reputable cannabis biotech that’s on the verge of huge gains. For details about this marijuana growth stock, click here.
John Persinos is the editor-in-chief of Marijuana Investing Daily. You can reach him at: mailbag@investingdaily.com. To subscribe to his video channel, follow this link. Have a happy and safe holiday.
Recent Comments