Cresco Labs announced their new partnership with a subsidiary called Well Being. What’s so great about it? That they will be selling a new wellness line comprising of hemp-based CBD products through them throughout the US some time soon.
The announcement was made on Monday 25th, where Cresco Labs (CSE:CL,OTC Pink:CRLBF) said that the line will primarily be for the health and wellness market.
Reasons for the new CBD line
And they won’t be the last to do so as market projections for hemp-derived cannabidiol (CBD) rise, we’ll probably be seeing more such collaborations.
Cresco CEO and co founder, Charlie Bachtell said that this was the ‘next obvious step’ for the company and also indicated that CBD offerings were the reason why the US cannabis market will be valued at $75 billion by 2030.
He continued that the wellness offerings can even be distributed nationwide to various grocers, retailers, online marketplaces, and nutrition stores. This would even help further the awareness of cannabinoid based products and their beneficial properties.
How Cresco will approach this
Scott Wilson will be leading this new division. Wilson seems for the job too, as he is the chief experience director at Cresco. Previous to this, he was the global creative director for Nike from 2001 till 2006.
Wilson shares a similar perspective with Bachtell on the upcoming line, saying that it will ‘demystify and build trust in CBD products’ so that consumers will know how to incorporate CBD wellness in their daily lives.
Where Investors stand
The timing of the launch seems perfect too, as Cresco shares jumped nearly 5% at the closing bell, reaching a price of C$12.
Crescp now holds the price target of C$14 Canaccord Genuity (TSX:CF) analyst Derek Dley. Dley initiated his coverage, giving the MSO company a ‘Speculative Buy’ rating.
Interested investors can look into other CBD ventures and business opportunities popping up around every corner. One big reason for this boost being seen in throughout the CBD market is the passing of a US$867 billion farm bill last December.
The bill helped legalise the market, production of the hemp plant and its derivatives. Following this legislation, the Brightfield Group issued a research report with findings indicating that this market will reach a value of US$20 billion by 2022.
Bloomberg’s report showed that Cowen & Co. (NASDAQ:COWN) projected the market at US$16 billion by 2025. They had reached these statistics through a consumer survey of 2,500 adults. The same survey showed even higher results for CBD consumption and that 6.9% respondents had actually used CBD products.
More details from the Cowen report showed that American adults will make 10% of the CBD market by 2025, approximately 25 million people.
Experts weighing in on the CBD boom
Cannabis analyst at the Haywood Securities, Neal Gilmer had told Investing News Network that anecdotal evidence is the reason why the market is bullish. He says that the evidence coupled with actual medical research will boost the market even further.
In her quote to the Investing News Network,CNS Equity Partners CEO, Jennifer Sanders said the correlation for hemp/cannabis adoption in wellness circles is actually outpacing the growth or harvesting of cannabis.
Dubious claims, anecdotal information are not making it any easier for the CBD market. Especially when this industry is still trying to make sense of the limitations of CBD products, while tying to create a solid consumer base and keep them interested.
Still, Cresco will be taking up this venture and is one of the many companies that’s eager to attract Canadian investors. Other MSOs are bring seen as potential markets, as they too being working on their expansionplans as well.
The farm bill looks like the biggest X factor here. Canadian cannabis bigwig, Canopy Growth (NYSE:CGC,TSX:WEED) is planning on pursuing the hemp market there in the US too. They plan on investing US$100 million into this new expansion, particularly in New York hemp development.