Welcome to the latest installment of "Bulls and Bud," a column where we take a look at some of the most promising stocks and brands in the legal cannabis industry.
True Leaf Medicine
The deal was worth about $6 million. Not bad for a company that did $8.1 million in 2018, and has delivered 16 consecutive quarters of revenue growth.
Although some folks might dismiss the market for CBD-based pet products, it’s actually quite lucrative. According to New Frontier Data, the cannabis-based pet care market is expected to be worth $125 million by 2022. It’s actually one of the fastest-growing sectors in the CBD market, with this figure representing a five-year CAGR of 57 percent.
Of course, $125 million is merely an accounting error compared to the global market for cannabis, but one that, if approached correctly, could pay off quite well.
Certainly this is the case with Altmeds, and will likely be the case with other producers of cannabis-based pet products. Especially considering there really aren’t that many legitimate players in the space yet.
Take True Leaf Medicine (OTC: TRLFF), for instance.
True Leaf is a global cannabis and hemp wellness brand for pets that’s actually been in the game since 2013.
Its products, which include offerings to help pets with anxiety, general health, and hip and joint pain, are sold in more than 2,000 stores throughout North America and Europe. It has deals with the following retailers:
Amazon.com (NASDAQ: AMZN)
Das Futterhaus - second largest pet store in Germany
Pet Supplies Plus - fourth largest pet store in North America
Global Pet Foods - sixth largest pet store in North America
Woofgang Baker - 10th largest pet store in North America
Mondou - 15th largest pet store in North America
Sales for fiscal year 2018 came in at $1.06 million, representing a year-over-year increase of 280 percent with a 45-percent gross margin.
Much like Altmeds, True Leaf has enjoyed steady revenue growth, and quite frankly, could also end up making a nice acquisition for either another cannabis brand or one of the bigger suppliers of pet products, such as Nestle Purina or Mars Pet.
Make no mistake: There’s a lot of money in cannabis-based pet products. And companies such as True Leaf and Altmeds are making it.
For the most part, I’m not a fan of gummies.
I don’t need the sugar, and my past experiences with gummies haven’t typically been good. Mostly due to dosing inconsistencies.
The company has six regular offerings, but I’m particularly fond of its Blackberry & Lemon product called, “Restore.”
Restore has proven to be a great relaxation aid as it does a very nice job at luring me into a state of calmness, but without the lethargy. It’s a pleasant high, and since each piece is just a micro-dose, I have better control over how much I want to consume.
Unlike a lot of other gummies, Restore actually tastes pretty good. You can still taste the cannabis in it, but it’s not off-putting. It’s not too sweet, either.
I would say this is not for the consumer looking for an intense high. The high on Restore is subtle, and works well if you just need something to take the edge off. If your tolerance is high, you will need to take a few to feel the effects. But for me, one or two gummies can do the trick, thus revealing my child-like tolerance level.
Long-time cannabis consumers seem to be mixed on PLUS, but newbies and baby boomers love it. Most likely because these are micro-doses, and are branded in a way that doesn’t say, “Hey take this gummy and get blasted!” Even the packaging suggests this is more for the non-stoner.
I suppose this is one of the reasons PLUS, which is public and trades over-the-counter under the symbol “PLPRF”, seems to get a lot of love from analysts who understand the future of cannabis profits will be found in the consumer behavior of newbies and baby boomers. Cannacord actually has a $6 price target on this thing, which is more than 70 percent higher than where it’s trading today.
In any event, while I’m not a newbie, and I haven’t entered my golden years just yet, if I’m not looking to fly, but instead settle in with a good book or movie, PLUS never disappoints.
Jeff Siegel is the co-founder and managing editor of Green Chip Stocks, a private investment community focused on socially-responsible investing. He is an expert in renewable energy and cannabis investing, has been a featured guest on Fox, CNBC and Bloomberg Asia, and is the author of the best-selling book, "Investing in Renewable Energy: Making Money on Green Chip Stocks."
Photo by Javier Hasse.
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