Invest in MJ Blog

Over the last few years we have seen an explosion of companies marketing, branding and selling CBD based products.   The trend to sell these products in the US will continue to grow as it becomes well know that the Cannabidiol from the cannabis plant does have many medical and health benefits.   Many of the CBD based products are sourced from the Hemp plant which makes it easier to sell in the US as most hemp based products can be sold in the US and do not necessarily require FDA approval for sale if marketed as a health supplement and not a medicine.  

There are a number of companies growing hemp and then extracting CBD oils for use in bi-products that are then marketed as health supplements by other companies.  The supply of CBD has seen tremendous growth over the last few years, the brands and products created and marketed by hundreds of companies  does bring a lot of competition to the market.  As more people become aware of CBD and its benefits, we do believe the sales of CBD based products will continue to grow.   However with more competition these companies will see their profit margins get squeezed and many will fail to bring their products to market.  

There are many companies listed on various stock exchanges that participate in product branding and sales of CBD based products.  While many have gained attention from the investment community, we do have to stress that most of them are using the same components for their products and it will be difficult to differentiate their products from others.  The point is, 90% of these companies do not have anything unique in terms of a product offering and many will fail.  If you are going to invest in companies that market and sell CBD based products, make sure they have a great marketing and branding strategy, have strong distribution partners, a proven management team and are well funded.  

The main purpose of this article is to get a better understanding of CBD and Cannabidiol, the investment opportunities and value of CBD will be discussed in the future.

Below is a basic overview of what CBD and Cannabidiol is and the potential health and medical benefits. The exert and infographic below was provided by Monica Bing from http://cannabisowl.com/

Cannabidiol is a major phytocannabinoid and accounts for about 40% of the marijuana plant’s extract. With quite a broad scope of medical applications, it's use is increasing among all populations and countries and research suggests it to be helpful for seizures, anxiety and other ailments.

CBD exerts its actions through a variety of pathways. This non psychoactive component is considered to have a wide scope of potential therapeutic usage. The exact cause for these effects is not clear. But this miracle herb seems to prevent the breakdown of a chemical in the brain that affects pain, mood, and mental function. 

CBD is consumed in a variety of forms including oil, tinctures, edibles, capsules, lotion and even chewing gum by patients. But CBD oils are becoming popular among chronic pain sufferers. This oil also works against convulsions, anxiety, insomnia, and ulcers.

In fact, this oil is the new hope of a cure for those suffering from terminal illnesses. Recent studies report that medical use of this oil can help people find relief from severe health conditions like cancer and chemotherapy treatment, atopic dermatitis, epilepsy, HIV/AIDS.

This ultimate oil is also gaining ground as a viable treatment option for several childhood illnesses and conditions. For some parents, CBD for kids becomes a last option. For many families, CBD is a miracle molecule that allows their children to live normal lives without hospitalisations, doctor visits, dangerous medications, and being stuck indoors. 

The following infographic outlines the utility of Cannabidiol.

On Monday cannabidiol (CBD) producers and distributors in the UK started to receive letters from the Medicines and Healthcare Products Regulatory Agency (MHRA) demanding that they cease to sell, supply, promote, advertise or process orders for CBD products within 28 days. The letters stated that CBD now satisfies the definition of a medicinal product. The revised definition will leave UK patients with no legal access to CBD.

Officials with the MHRA are due to release a statement tomorrow, Oct. 7, to clarify the position. A spokesperson from the agency released the following statement:

We have come to the opinion that products containing cannabidiol (CBD) are a medicine. Products for therapeutic use must have a medicines’ licence before they can be legally sold or supplied in the UK. Products will have to meet safety, quality and effectiveness standards to protect public health.

We have written to UK CBD stockists and manufacturers to inform them of our view. These products will require a marketing authorisation to be granted before they can be legally sold, supplied or anywhere advertised in the UK.

Individuals who use CBD for treatment should take questions to a health care professional, the MHRA said, adding, “We can provide regulatory guidance to any company who may wish to apply for a licence.”

Peter Carroll of the End our Pain campaign, a UK medical cannabis patient advocacy group, said that “we agree that there is a need for more control in the CBD market to protect people from unscrupulous suppliers and to make sure that people understand what they are taking.” But, he added, “we fear that today’s sudden move will cause huge distress to people who rely on these products.  It will drive many people to look for CBD on the black market. It is a sledgehammer to crack a nut.”

This decision further complicates the status of medical cannabis in the UK. The definition of CBD, one of the main active ingredients in cannabis, as a medicinal product is in stark contrast with The Misuse of Drugs Regulations 2001 scheduling of cannabis as having “no medicinal value”. This adds another exception to the 2001 Regulations, the other being Sativex, a cannabis-extract which is available in very limited circumstances for some MS suffers.

CBD has been soaring in popularity recently as many people purchase it in a variety of forms either as an aid to relaxation, in an attempt to quit nicotine, or for a number of serious ailments and medical conditions. CBD has been linked to a number of potential medical applications with strong anecdotal evidence of its efficacy in treating epilepsy, anxiety, depression, and multiple sclerosis, among many other conditions.

GW Pharmaceuticals, producer of Sativex, released the results of its latest phase III clinical trial for Epidiolex, a liquid formulation of CBD, on September 26. The company hopes to achieve approval in Europe, but the product is still at trial stage and not available for patients. The product is in development for the treatment of a number of conditions, specifically rare pediatric epilepsy disorders including Dravet Syndrome and Lennox-Gastaut Syndrome.

It is unclear how long, or costly, the license application will be for current CBD vendors and whether any will in fact be successful. Medicinal products must meet certain standards before being granted a marketing authorization. Interestingly, the MHRA states that “proof of efficacy generally relies heavily on clinical trial evidence, and no products must be marketed pending any license application.” To date there have been some exciting but very limited trials around CBD but there is a lack of full clinical trial evidence. The process could take years, and it is unclear whether the results of the Epidiolex trials will be relevant to other CBD products or limited to a unique GW Pharmaceutical formulation.

There have been many concerns over the unregulated CBD market. Until now, companies were able to sell CBD products so long as they did not make any medical claims about the product. There were stories of companies breaching this condition as well as providing products of dubious origin and quality. Regulation and standards of some sort will likely be welcomed by the industry but there are serious concerns over the cost, time and process involved in making license applications.

The short deadline of 28 days will come as a worrying shock for the thousands using CBD. Many will question whether this very short deadline is in the best interests of patients. For the time being we simply don’t know how long it will be before patients relying on CBD will be able to legally access their medicine in the UK.

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