Farm Bill Could Unleash $1 Billion in US Hemp Sales

The US hemp industry is on the verge of a groundbreaking legal victory. Powerful politicians are about to open the floodgates for billions in new sales to flow into the hemp industry in the next few years with a controversial piece of legislation.

This potential legal breakthrough is the perfect catalyst for a promising young US cannabis company that is an early leader in the high-growth hemp and CBD markets.

Hemp is a close relative of the cannabis plant. Unlike cannabis, Hemp doesn’t have the properties that make users feel high.

Picture from ministryofhemp.com

However – hemp’s seemingly supernatural powers have plenty of applications.

The total sales for the U.S. Hemp Industry in 2017 were $820mm. $190mm were for Hemp-Derived CBD products, $181mm were for personal care products and $137mm were for hemp food products. Food sales were led by the Snack Food category and Industrial Product sales were led by the Automotive category.

 

Despite all of these applications, hemp is still classified as a Schedule 1(I) drug by the Federal Government. That classification has significantly stunted the growth of the US hemp industry.

That could all change as early as this week.

US legislators could vote on a new Farm Bill as early as this week – and this new version of the bill would remove hemp as a Schedule 1(I) drug – making hemp legal in the US for the first time in 50 years.

Here are some more details from The Atlantic.

Now, four years after universities and state agriculture departments were allowed to begin growing limited quantities of hemp for research purposes, Congress is expected to make the crop legal for Americans to grow for the first time in nearly 50 years.

Legalization as part of the 2018 omnibus farm bill would be a major victory for American hemp producers, who believe hemp cultivation could become a billion dollar–plus industry, given hemp’s growing use in pharmaceuticals, food, and textiles.

The US is one of the largest importers of Hemp in the world. If the Farm Bill reclassified hemp it would set the stage for domestic producers to replace foreign suppliers.

The Hemp Business Journal recently published a report projecting US hemp sales to almost double to $1.8 billion in the next four years.

If the Farm Bill passes, it would be a big win for the US hemp industry.

US CBD Leader Set to Benefit From Hemp Being Legalized

Charlotte’s Web (CSE: CWEB, OTC: CWEBF) is a US-based cannabis company and an early leader in the high-growth US CBD market. Shares began trading on the Canadian Securities Exchange in late August under the ticker symbol CWEB. Shares are also trade in US OTC markets under the ticker symbol CWEBF.

CWEB is an early industry leader in the CBD market with an impressive portfolio of cultivation facilities and consumer products.

  • Sold in 3.045 Retail Locations 
  • 63,000 lbs Hemp produced in 2017 
  • 300 Acres Planted 2018
  • 40,000 FT Manufacturing and R&D facility 
  • $40M Revenue 2017

CWEB Has Been Delivering Impressive Sales Growth

As an early industry leader, CWEB is already delivering impressive sales.

Highlights of Third Quarter 2018 Results versus Third Quarter 2017 Results

  • Organic revenue growth of 57% to $17.7 million
  • Gross profit (before biological asset adjustments) increased 54% to $13.8 million, or 78% of consolidated revenue
  • Adjusted EBITDA increased 23% to $5.4 million, or 31% of consolidated revenue
  • Significant marketing investment made in brand relaunch to be leveraged throughout 2019
  • Completed IPO generating net proceeds of $71.5 million

Highlights of Nine-Months 2018 Results versus Nine-Months 2017 Results

  • Organic revenue growth of 75% to $48.0 million
  • Gross profit (before biological asset adjustments) increased 80% to $37.1 million, or 77% of consolidated revenue
  • Adjusted EBITDA increased 71% to $16.2 million, or 34% of consolidated revenue

CWEB Is up More Than 50% Since Going Public

CWEB is off to a good start since going public.

The Big Picture

The Farm Bill could usher in a game changer, making hemp legal in the US for the first time in 50 years. If that happens, Charlotte’s Web is in position to capitalize as an early leader in the high-growth hemp and CBD industries.


Michael Vodicka
Editor, Cannabis Stock Trades

About the Author & Cannabis Stock Trades

Michael Vodicka is a globally syndicated equity analyst with more than 20 years of experience in trading and investing. His research has been featured in some of the industry’s most respected publications.

He has been investing and leading investors in the cannabis sector since 2013.

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