Little-Known European CBD Stock Cashing in on 400% Growth Projection

Cannabis Background

The European CBD market is expected to see explosive growth in the next four years.

According to a new report from Brightfield Group, a leading hemp and cannabis market research firm, the European CBD industry will see explosive growth in the next four years. Brightfield estimates the European CBD market at $318 million in 2018. Brightfield expects the market to grow more than 400% through the year 2023.

Brightfield’s managing director Bethany Gomez said, “CBD is just starting to take hold in Europe, with both product availability and consumer awareness still quite limited.”

She went on to say that, “[cannabis] is a great opportunity for developed brands to enter and expand through Europe with far less competition than we’re seeing in the U.S. With the Novel Foods Act, it is a challenging legal environment to operate in, but impending regulatory changes are likely to smooth the way for significant mid-term growth.”

Here are some more highlights from the report:

  • The largest CBD markets in Europe today are those of the United Kingdom (UK) and Austria. These countries each made up an early $80 million market in 2018. The UK is expected to remain a market leader over the medium-term. Germany’s growth is expected to outpace that of other EU countries.
  • Switzerland and Spain are building out and improving regulations surrounding product quality. These new standards for both cannabis and CBD markets are boosting consumer confidence.
  • Some of the top distribution channels are in smoke shops.

Naturally, investors want to know how to cash in on this opportunity. One way to play the trend is with Canopy Growth Corp (CGC, WEED). Canopy, the largest cannabis company in the world, is investing millions to capitalize on European cannabis markets.

However, the problem with Canopy is that it does not offer pure-play exposure to Europe because operations span five continents.

A better way to play the European CBD market is with a little-known, early industry leader who operates exclusively in Europe. Stillcanna (CSE: STIL, OTC: SCNNF) is a Canadian cannabis company headquartered in Vancouver with big plans to dominate the European CBD market.

Shares of Stillcanna are listed on the Canadian Securities Exchange under the ticker symbol STIL. Shares also trade in the US in OTC markets under the ticker symbol SCNNF.

Stillcanna stands out because of its three-pronged approach to the CBD market: cultivation, developing proprietary CBD extraction systems and brands, and inking new strategic partnerships.

Stillcanna Just Bought a Polish Hemp Farm for $18.6 Million

On May 8, Stillcanna announced it paid $18.6 million to acquire Olimax, a Polish hemp grower with about 3,700 acres of hemp production. The acquisition of Olimax is a significant strategic move for Stillcanna. It enables the company to source the hemp materials needed to manufacture its CBD products.

Stillcanna Has Developed Proprietary CBD Extraction Systems

Stillcanna has developed an important competitive advantage – a proprietary CBD extraction system that relies on ethanol. This revolutionary method does not rely on CO2, hydrocarbons, or even ice water like the other standard extraction techniques.

This extraction system is a cost-effective solution capable of extracting large amounts of CBD in a short amount of time. This method also produces a consistent and clean final product. Looking forward, Stillcanna intends to further ramp up its extraction capacities.

The company is in the early stages of building a brand new, GMP certified CBD extraction facility in Poland. This facility is designed to produce 80 million grams of CBD per year. The company has invested $7.5 million in the project, and it is expected to be complete in the spring of 2020.

Stillcanna Partnered with Dragonfly to Develop a Branded line of CBD Products

Stillcanna has partnered with Dragonfly, one of the fastest growing CBD companies in Europe to develop a branded line of CBD products. Here’s what Stillcanna says about Dragonfly products.

All Dragonfly’s products are tested in third-party laboratories, as well as its own to ensure consistency and quality across the board. Dragonfly works under Good Manufacturing Practices (GMP). Its product line is standardised to contain specific quantities of cannabinoids including, CBD, CBD-a, and CBG. Dragonfly guarantees that its products are 100% organic, non-GMO, and vegan. Here is an image from Dragonfly.

Stillcanna Has Been a Bit Weak on the Chart But I See an Opportunity

Stillcanna began trading on the Canadian Securities Exchange in early May 2019. Since then shares have been a bit weak, falling about 30%.

I don’t view this weakness as a negative signal. The broader stock market and cannabis sector were both weak in May which weighed on shares. And the last two years have shown us that the best time to buy cannabis stocks is when shares are down. I see the same thing happening here.

The Big Picture on the European CBD Market and Stillcanna

The European CBD market is expected to see explosive growth in the next four years. Stillcanna is making moves to cash in on that growth. Shares are down since hitting the Street in May.

However, in the long run, I expect Stillcanna to deliver big revenue and earnings growth. I believe we’ll see the share price push higher.

About the Author

Michael Vodicka is an equity analyst with more than 20 years of experience 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.