CannabisNewsWire
Editorial Coverage: As the cannabis market grows, companies are
seizing the opportunity to make strategic investments in the sector
and establish a foothold in the promising space.
- Cannabis and related products are legal in an ever-increasing
number of jurisdictions.
- Businesses have responded with an increasingly diverse range of
products.
- Companies making the smartest investments, such as carefully
selected mergers and acquisitions, are in the best position to
profit from this while minimizing risks.
SinglePoint Inc. (OTCQB: SING) (SING
Profile) has invested in a number of other cannabis
companies to grow its portfolio and leverage its position in the
market. Marijuana Company of America Inc. (OTCQB: MCOA)
(MCOA
Profile), with its hemp-oriented business, is
expecting a surge in profits following the crop’s federal
legalization in the United States in December. Medical
Marijuana Inc. (OTC: MJNA), the first publicly traded
cannabis company in the United States, has seen record sales.
PotNetwork Holdings Inc. (OTC: POTN) is reaching
out to new customers with a CBD-infused slushy machine. And
American Premium Water Corp. (OTC: HIPH) is also
pushing CBD into the soft drinks market with its infused water.
To view an infographic of this editorial, click here.
A Big Year for Big Investment in Cannabis
This year looks to be an important year in the development of
the cannabis market. The legal groundwork for those changes was
laid last year, with significant legislation moving forward in
Canada, the United States and elsewhere. With the legal aspects in
place, fresh opportunities for the market to grow and for companies
to make bold moves within the sector have become more frequent —
and look to be more profitable.
This momentum is fueling the ongoing development of two
important trends. One is product diversification, as cannabis
companies and the businesses supporting them develop a wider range
of products for an increasingly varied market. The other is big
investment, as both the larger cannabis companies and outside
businesses with big bank balances move to carve out chunks of the
market. Money is flowing in, making the most of the opportunities
that legal and product changes provide.
A Changing Global Context
Things have been looking rosy for cannabis for some time, and
last year saw significant growth in the sector continue. SinglePoint Inc.
(OTCQB: SING), a young tech company that has moved into the
cannabis sector, saw its revenue hit
the $1 million mark. In addition, like many cannabis companies,
the company ended the year expecting even better things to come,
with a prediction that revenue will dramatically increase over the
next 12 months.
How can companies in a relatively untried sector make such bold
claims?
The answer lies in the changing attitude of lawmakers to
cannabis. The prohibitory model for managing the drug that has
dominated for half a century is increasingly recognized as not just
ineffective but harmful to public health. Consequently, governments
are legalizing cannabis for medical use. And in the most
forward-looking cases, they are creating regulated markets for
recreational cannabis, most significantly in Canada, which made the
trade legal nationally last October.
For American companies such as SinglePoint, change has come on a
state-by-state basis. Though the majority of
Americans favor legalization, the federal government has been
too reliant on conservative voters to support nationwide change.
Instead, individual states have created legal markets, with
Michigan becoming one of the most recent when cannabis went legal
there in December. Two-thirds of U.S. states now allow medical
cannabis, and one in five have legalized its recreational use, with
more expected to follow over the next few years. This has allowed
SinglePoint to begin investing in cannabis without having to
consider a national cannabis business.
December saw a significant step towards wider legalization.
Following months of wrangling, the 2018 Farm Bill passed into law,
making industrial hemp legal on the federal level. This
nonpsychoactive from of cannabis has provided many companies,
including SinglePoint, with an important entry point into the
sector, as the chemical cannabidiol (CBD), which can be derived
from hemp, can be more widely sold than other forms of cannabis.
CBD’s meteoric rise has given a further boost to the sector,
especially to companies entering via this route.
The Farm Bill will allow cannabis businesses to grow
significantly through hemp and provide a precedent as federal
politicians reconsider the wider cannabis industry.
Product Diversification
Now that they have more opportunities to produce cannabis,
companies are doing what companies always do — finding new ways to
sell their products and services. This has led to a wave of
innovation and an increasingly diverse range of cannabis-based
products.
Two of the biggest areas for innovation are the creation of confectionaries and beauty products. The
former have obvious appeal as a way to consume cannabis without
smoking it. The latter are a natural fit given the suggested
well-being benefits of CBD and THC, along with the willingness of
customers to try new plant-based beauty products. But even more
innovative products are hitting the market, such as Phyto-Bites, a product SinglePoint distributes on its
website SingleSeed.com, designed to improve the health and
well-being of pets.
Human health and well-being remain a huge driver for innovation
in cannabis. Aware of that, SinglePoint has also been adding health
and wellness products to its sales lines. Its SingleSeed store
recently unveiled a range of TorusMed Hemp CBD products to its
offerings. The new products include treatments such as Sport Relief
Topical Cream, an ointment designed to provide pain relief for
professional and amateur athletes.
Smart Investing in the Cannabis Sector
The growth of the cannabis sector has inevitably led to some
instability. Companies are operating in a space that didn’t even
exist 20 years ago. The sector is evolving quickly, with the last
few years triggering a wave of consolidation, and of course in a
fast-changing market, there will be challenges and bumps along the
way. Amid all this, working out how to investment smartly has
become critical.
A lot of the secrets to smart investing in cannabis are the same
as for any sector: do research, understand the businesses being
invested in, have a plan and stick with it. Understanding the
specific circumstances of the cannabis market is essential, and the
big trend within the industry over the past year has been mergers
and acquisitions, as companies such as SinglePoint have expanded
through investment in promising companies that provide products and
services that will complement and support its strategy.
SinglePoint’s most recent investment has been in
TorusMed, a company developing new ways to optimize CBD output
from hemp and therefore increase the profitability of this part of
the cannabis sector. With hemp on the verge of a new boom thanks to
the Farm Bill, SinglePoint has used its understanding of the market
to invest in a company that appears to offer great potential to
make the most of this moment.
Moves like this can put a company in a strong position heading
into what looks to be a big year for cannabis. “[This year] will be
a banner year for SinglePoint,” said SinglePoint CEO
Greg Lambrecht. “We are equipped with the proper funding,
partners and opportunities to be firing on all cylinders. We as a
team expect to position SingleSeed and SinglePoint as market leads
in the CBD market while continuing to enable the founders of the
companies we have acquired to grow their businesses. We are well
diversified and have large opportunities across many emerging
markets that should enable us to be successful into 2019 and
beyond.”
New Year, Fresh Growth
Marijuana Company of America Inc. (OTCQB: MCOA)
is also making the most of the opportunity provided by the Farm
Bill and is expecting
significant growth off the back of this legal change. The
company has a vertically integrated range of cannabis interests,
including a hemp farm in Oregon and its hempSMART range of
products. The legal changes should allow the company to more easily
produce CBD-rich plants and sell the products derived from them
without worrying about legal complications for crossing state
lines. MCOA will also face lower federal income tax, thanks to the
change in hemp’s status, allowing it to keep more profits.
Federal legislation against cannabis production and distribution
has hampered the ability of companies to raise funds through public
investment in the past, but some have found ways. Medical
Marijuana Inc. (OTC: MJNA) was the first cannabis company
in the United States to be publicly traded, a move that put it in a
strong position both financially and for its public profile. It has
recently experienced record sales, buoyed up by
the growth of the cannabis market in the U.S. and beyond.
PotNetwork Holdings Inc. (OTC: POTN) has worked
hard to develop a wide range of products, answering the increasing
demand for product diversity in the cannabis market. The latest of these is the Brain Chill Slushy Machine,
provided through its subsidiary Diamond CBD Inc. Initially
launching in South Florida, these machines serve slushies in a
variety of flavors, all infused with CBD. With millions of gallons
of slushies consumed every year, these new machines are designed to
provide an appealing introduction to CBD.
Also working on drinkable CBD is American Premium Water
Corp. (OTC: HIPH), a diversified luxury consumer products
company that bases its range of health and beauty products on
biotech research. Its Lalpina CBD water is infused with CBD and
features in several recently announced
distribution deals, as the company extends its reach in the
U.S. and beyond.
Legal changes are encouraging an increasingly diverse cannabis
market, in which companies that make smart investments are primed
for profit.
For more information on SinglePoint, visit SinglePoint Inc.
(OTCQB: SING)
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