This New Cannabis Craze Has Made Early Investors Rich – The Motley Fool

This New Cannabis Craze Has Made Early Investors Rich – The Motley Fool

Motley Fool via Yahoo Finance: 

Pot stocks have been rising lately, with investors looking at the rising tide of new jurisdictions where marijuana is getting legal for recreational use. With the entire nation of Canada legalizing cannabis this month, the firms that will offer the marijuana that users wish to smoke see a potential gold mine ahead.

But there is another area of the cannabis market that’s only beginning to get attention. Upstarts that are new and both cannabis businesses are moving full speed ahead to develop consumer products that could have a larger addressable market than those who wish to smoke weed. Along the way, investors in companies like New Age Beverages (NASDAQ: NBEV) and India Globalization Capital (NYSEMKT: IGC) have seen their stocks soar — and even more profits could lie ahead for those trying to develop and sell drinks infused with cannabidiol (CBD).

What is CBD?

Cannabidiol is a chemical compound that’s found naturally in bud. Unlike other compounds found in marijuana, particularly tetrahydrocannabinol (THC), CBD lacks the extreme psychoactive impacts associated with cannabis use.

Many of those in the cannabis industry tout the beneficial impacts of cannabidiol. Pharmaceutical companies have looked closely at CBD, and there have been some successes in finding therapy. The most notable is GW Pharmaceuticals’ (NASDAQ: GWPH) Epidiolex, a CBD-derived treatment for certain types of epilepsy that gained approval from the U.S. Food and Drug Administration earlier this year.

Setting the stage for CBD-infused beverages

The beverage industry has gone through a transformation of its own moving away from sodas toward more healthy offerings. As cannabis products become legal, the ability to offer CBD-infused beverages hits on two themes that are high-demand hard.

A few of the giants of this bud industry that is budding were to look at drinks. One reason why Canopy Growth (NYSE: CGC) attracted the attention of Constellation Brands (NYSE: STZ) for a significant investment was that the two companies saw the potential gains from experimenting with drinks containing cannabis-derived ingredients. Likewise Coca-Cola (NYSE: KO) has hunted for growth opportunities, and reports indicate it could collaborate with Canada’s Aurora Cannabis (NASDAQOTH: ACBFF) to produce a beverage with CBD.

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Published at Thu, 04 Oct 2018 14:29:06 +0000

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