This Cannabis Niche Could Deliver Outsized Returns in 2019

The entire legal marijuana sector had a mighty good 2018.

We saw California, with a population of nearly 40 million people, begin sales of fully legalized marijuana for recreational use.

Over the summer, the FDA approved the use of a cannabis-derived drug, Epidiolex, for the first time. In the fall, the rollback of cannabis prohibition hit the big time across Canada. All the while, here at home, states took it upon themselves to extend the legalization of cannabis, whether for medical or recreational use, across the United States.

And just last month, the cultivation and sale of a type of cannabis plant – hemp – and products derived from it became legal across the United States with the passage of the Farm Bill.

But if we’re being frank, all of this will pale in comparison to what’s coming in 2019.

In fact, we believe one segment – worth around $2 billion today – will outperform everything we saw last year combined…

Cannabidiol (CBD) Comes Into Its Own This Year

Mark my words: One year from now, 2019 will be remembered as “the year of CBD.”

CBD, or cannabidiol, is the main non-psychoactive component of cannabis. It, along with other non-psychoactive compounds in cannabis, shows enormous promise for treating a variety of symptoms, including post-traumatic stress disorder, autism, schizophrenia, and more.

CBD is also rapidly gaining popularity as a general health treatment, with people taking it for everything from keeping energy up to arthritis – it’s even used as a pet health supplement. We’re starting to see recurring coverage in The New York Times and The Washington Post, and discussion on national talk shows.

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The passage of the Farm Bill late last year effectively “normalizes” CBD across the country by making industrial hemp, a major source for CBD, legal on the federal level.

Hemp farmers can now access banking services, crop insurance, and even federal grants for research that were previously unavailable. For manufacturers and distributors, it is now crystal clear that it is 100% legal to transport hemp and hemp products – including CBD – across state lines.

Moreover, retailers can now sell CBD without fear of enforcement action by the government.

And in March, the United Nations is set to de-schedule CBD, whether sourced from marijuana or hemp, giving CBD products the global green light.

All of these catalysts will combine to create a market unlike anything we’ve ever seen before.

CBD’s Accelerating Journey to a $2 Billion Market

There is a large backlog of companies that have been itching to make or sell products from hemp, and some already-successful companies are poised to make massive profits from feeding the demand.

The very best of those companies has been in our Cannabis Investor’s Report portfolio since this service launched in October.

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Within a few months, CBD will be available in a much larger variety of products. You will be able to choose among tinctures (currently the primary form of consumption), gummies, energy shots, nutrition bars, skin moisturizers, infused ingredients like honey, and more.

And with the rapidly increasing acceptance of cannabis in general and CBD in particular – these products – old and new – will be available in everyday stores across the nation.

Case in point: DSW Inc. (NYSE: DSW) – yes, the shoe store chain – recently announced an agreement to carry Green Growth Brands’ Inc. (CSE: GGB) products.

The announcement follows a successful test phase conducted in the fall of 2018, in which Green Growth’s “Seventh Sense” line of low-priced, high-quality CBD-infused products, like muscle balms, body lotions, washes, and foot creams, were placed in 10 DSW locations.

During the first 10 weeks of the test, something like 74% of products on the shelves sold, which blew expectations out of the water.

DSW has a presence in 44 states. Its partnership with Green Growth represents, essentially, the first nationwide CBD product rollout of its kind – 54,960 units of product in 96 DSW outlets in the United States.

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With the Farm Bill clearing the way, we can expect many, many more projects like this.

As one DSW executive said, “We have seen recent shifts in consumer behavior accelerate changes in the retail industry. North America’s widespread adoption of the use of CBD products is one of the best examples of these shifts.”

By the end of the year, people will be buying pallets of CBD products at Costco just as they purchase other health supplements, from eggs with additional Omega-3 added to supplements like protein powders.

Now, estimates for the size of this market are all over the place, from the wildly bullish $22 billion by 2022 from Brightfield, to the smaller but still optimistic $646 million by 2022 from Hemp Business Journal.

My own conservative estimate for the CBD market in 2019 is that it will triple to nearly $2 billion, but $3 billion is by no means out of the question.

Throughout this year, I predict demand for CBD products to at least triple to nearly $2 billion, but that number could increase as much as five times, to $3 billion, and that’s a great thing for picks like Aurora Cannabis Inc. (TSE: ACB) we’ve shared here before.

There’s Much More to Cannabis Than CBD

Legal marijuana is a monster growth sector, while stocks seem to be slowing down all over. The National Institute for Cannabis Investors is dedicated to helping regular people learn about the incredible opportunities coming in a market already worth $55 billion and that could be worth $146.4 billion by 2025. Click here to learn how to become a Member.

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