These impressive facts can be found in the 2022 U.S. Hemp Crop Report, released late last month by Vote Hemp, a leading hemp advocacy organization. When it comes to this recent report, Erica Steenstra, president of Vote Hemp, told Nebraska’s KTIC Radio news:

“We’ve seen hemp cultivation significantly expand in the U.S. in 2022, with over triple the number of acres planted in hemp compared to last year and the addition of 4 more states with hemp programs. Now that we have lifted federal prohibition on hemp farming, it’s time to invest our energy in expanding hemp cultivation and the market for hemp products across the country so that all can reap the benefits of this versatile, historic American crop.”

Just months ago, experts were claiming sales of hemp products may reach $2 billion by 2022. However, with this current hemp report and the optimism federal legalization brings, there’s a good chance that number will grow rapidly. The truth of the matter is many more people are opening up to CBD and other hemp products as the stigma around the plant falls away. The more people to do so, the more demand will naturally appear.

Similarly to last year’s report, we’re going to take a look at the leading states and see the progress they’ve made since 2017.

COMPARING 2022 VS 2017 US HEMP ACRES

Comparing Vote Hemp’s 2022 report with last year’s hemp acreage reveals incredible growth in just one year.

Overall hemp acreage increased from 25,713 to 78,176, with the total number of hemp growing states up to 23 from 19 states. The total number of hemp licenses issued across all states more than doubled, from 1,456 in 2017 to 3,546 in 2022. More universities also got involved with hemp research. In 2017, 32 universities took part in hemp research, while 40 had hemp research programs in 2018.

In addition to the sheer increase in U.S. hemp acres between 2022 and 2017, the top hemp growing states also shifted from year to year. Colorado was the top hemp growing state in 2017, with 9,700 acres grown. At the time, we expected the state to maintain its lead into the future. Instead, an unexpected contender came forward to claim that prize in 2022.

TOP 5 HEMP GROWING STATES IN 2022

The 2022 hemp report revealed a historic year in hemp growing. Not only have certain states made incredible progress but the entire country tripled its hemp output, along with more than doubling the number of licenses issued.

In 2022, 5 states made huge leaps when it came to hemp acreage. By observing their individual success, we can get a sense of how other states can make the best of the recent Farm Bill and increase their hemp production in 2019 and beyond.

#5 – Tennessee – 3,338 Acres

Tennessee made a significant leap this year in terms of their involvement in the hemp industry. The state went from farming 200 acres of hemp in 2017 to a staggering 3,338 this past year.

The reason for this leap is due to Tennessee’s Department of Agriculture allowing for more industrial hemp projects and licenses to be issued. Part of the reason for their permissive attitude has to do with the state’s rich history with the crop.

#4 – Kentucky – 6,700 Acres

Though Kentucky no longer ranks as high on this list, they’ve more than doubled their hemp production within the last year. Kentucky has been a leading state for much of the industry’s recent endeavors due to the fact that it was one of the first to embrace pilot hemp programs. Despite the state’s conservative history, many former tobacco farmers now grow hemp. The state’s legislators, including Senate Majority Leader Mitch McConnell, were instrumental in passing nationwide hemp legalization through the Farm Bill.

#3 – Oregon – 7,808 Acres

It comes as no surprise to see Oregon ranking high on our list. For some time, it’s been one of the most forward-thinking cannabis states across the country. Even before the 2022 Farm Bill, Oregon’s lenient hemp growing program allowed any farmer or business to apply to grow or handle hemp.

Last year, Oregon ranked in at #2 for producing 3,469 acres of hemp. This year, their efforts have given them nearly 8,000 acres.

#2 – Colorado – 21,578 Acres

Last year, we claimed, “for years to come, it seems as though Colorado is going to lead the hemp industry.” Though we were wrong, there’s no doubt the Centennial State gave its best effort in trying to stay true to our claim. Colorado more than doubled its hemp acres from 2017’s 9,700 acres of hemp.

#1 – Montana – 22,000 Acres

In 2022, Montana took the grand prize not only in most acres of hemp grown but in how much expansion its made since 2017. In the year prior, the first year that Montana allowed hemp, the Treasure State grew a mere 542 acres of hemp. This past year, they’ve more multiplied their hemp production by more than 40 times!

This increase is truly an incredible feat not just for the state but the industry as a whole. The interesting part of it all is Montana didn’t change their rules or regulation to cause this growth. The same license was necessary each year and cost around $450.

Yet, due to a massive increase in the number of farmers desiring to grow hemp, Montana ranks number one on this year’s list.

HEMP CROP REPORT REVEALS TREMENDOUS GROWTH IN US HEMP ACRES

It’s truly mindblowing to think about how far the hemp industry come just since 2014. Throughout that time, we went from a complete prohibition to over 75,000 acres of the plant being grown across the nation.

It should be noted the other states which have made tremendous progress throughout 2022:

• Pennsylvania went from 36 acres in 2017 to 580 acres in 2022.
• Maine went from 30 acres in 2017 to 550 acres in 2022.
• Nevada went from 417 acres in 2017 to 1,881 acres in 2022.
• Vermont went from 575 acres in 2017 to 1,820 acres in 2022.
• Wisconsin went from no acres in 2017 to 1,850 acres in 2022.
• North Carolina went from 965 acres in 2017 to 3,184 acres in 2022.

These numbers reveal the ongoing and inevitable rise of this industry. Though experts long predicted a U.S. hemp boom, this Hemp Crop Report comprehensively shows how rapidly the hemp industry is rising.

With total hemp legalization underway across the United States, there’s no telling how much progress is coming. All we do know is it’s bound to be another milestone year in 2019.

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Hemp Business Journal recently released their 2022 hemp industry analysis, reporting sales of hemp products hit $820 million. Despite ongoing legal and regulatory complications, the industry grew a total of 16 percent last year.

And that number is expected to continue rising. With more and more states seeing the value in hemp, legalization is spreading like wildfire.

CBD PRODUCTS LEADING THE WAY IN US HEMP SALES IN 2022

Hemp Business Journal laid out a market breakdown of where hemp products did their best. Turns out, CBD and personal care products dominated the business.

Responsible for 23 percent of U.S. hemp sales, CBD products banked in at $190 million last year. Personal care items come in at 22 percent, generating around $181 million.

Here are other major uses for hemp and the total value of those sales:

• Industrial applications – $144 million
• Food – $137 million
• Consumer textiles – $105 million
• Supplements – $45 million
• Other consumer products – $16 million

As mentioned, U.S. hemp sales are expected to rise as laws and regulations around hemp continue to ease.

With Congress increasingly supportive of total federal legalization of industrial hemp, hemp experts are predicting sales can more nearly triple within the next 5 years.

US HEMP SALES COULD APPROACH $2 BILLION BY 2022

Though it’s only an estimate, Hemp Business Journal expects U.S. hemp sales to reach $1 billion in 2019, and climb as high as $1.9 billion by 2022.

This is due to two important factors: Hemp is easier to grow than other resources, such as cotton or corn. With it’s over 25,000 known uses, businesses see large potential in hemp as a resource.

Still, we have a long way to go until these estimations become a reality. In 2022, over half of the hemp industry was based in Colorado alone. The biggest barrier: not every state is on board with hemp legalization.

Since hemp is still only partially legal, the amount of production allowed varies from state to state. Therefore, we aren’t seeing as big of a hemp boom as we could because farmers and vendors still face regulatory hurdles from growing their crops to bringing products to market.

As of this time, experts expect the hemp industry to grow in much of the southern states (namely, Kentucky, North Carolina, and Tennessee) as well as a great area of the Midwest (particularly, Minnesota and North Dakota).

However, with more laws being put into place, such as the 2018 Farm Bill, hemp holds the potential to grow even beyond the estimates mentioned here.

LEGAL COMPLICATIONS LIMIT POTENTIAL US HEMP SALES

Congress could be key to this industry’s success, thanks to a bill proposed on April 12th, 2018. The Hemp Farming Act of 2018 was introduced by Senate Leader Mitch McConnell and supported by Senator Ron Wyden as well as Senator Jeff Merkley.

Senators later added the act as an amendment to the 2018 Farm Bill. If Congress passes the Farm Bill as expected, the Department of Agriculture will regulate hemp on the federal level. This would not only make hemp more widely available to farmers but to consumers as well. Almost inevitably, full legalization would increase sales.

Still, complications will continue to persist under current plans for nationwide legalization. The current language of the amendment bans anyone with a prior drug felony from growing hemp. The U.S. does not regulate any other crops in this manner.

This law could put existing farmers such as Veronica Carpio at risk. Carpio is an early contributor to the hemp industry and the president of Grow Hemp Colorado, but she also holds a past felony cannabis conviction. With this new bill, there’s potential she’ll be kicked out of the industry, in spite of all she’s already done. Future hemp entrepreneurs could also be locked out by their criminal record. However, some hemp industry experts hope the law could be reformed after passage.

We can only guess at how high hemp sales could get. Though hemp farming is growing, companies simply don’t have enough of the resource to offer a full range of commercial products. Imagine if hemp was as widely available as cotton. Who knows how many hemp products we’d see on the market?

The post US Hemp Sales Reach Record-Breaking $820M In 2022 appeared first on Ministry of Hemp.

Few industries are as rewarding as the cannabinoid sector right now, but in order to find success in a saturated market, there are some basic rules to the cannabinoid game you should know ahead of time. CBD is no longer up and coming, it is here. To gain traction today, you need to make sure your brand is unique, compliant, and on-target.

No matter when you enter the cannabinoid industry, consumers will still be crazy for this plant and its beneficial constituents. However, now is the only time to capitalize off of emerging new cannabinoids and the long-awaited development of a reliable CBD supply chain, and we are here to show you how. 

Table of Contents

• Quick guide to starting a white label CBD business
• Lab Testing
• Identify Your Audience
• Find A Supplier
• Establish Your Brand
• Pro-Tips: Make Your White Lab CBD business Stand Out
• Ongoing Optimization
• Wrapping Up: FAQ on White Label CBD Business

Quick guide: How to establish your CBD business

Before we dive in, let’s outline the next steps:

1. Find a supplier, and determine how your brand will stand out in a saturated market.
2. Create a website, select a merchant processor, formulate your products, and upload product descriptions.
3. Support your brand with on-site content, guest posts, social media, and other marketing efforts.
4. Respond to the shifting market and customer concerns to develop the best brand possible.

Unlike any fad, CBD is only becoming more popular with time. The massive popularity of cannabidiol (CBD) is, in fact, also raising attention to other non-psychoactive cannabinoids that THC has overshadowed for too long. Rather than receding and going away, CBD is only growing in importance within the global economy, and it’s bringing all the other cannabinoids found in Cannabis sativa along with it.

Although all business involves tough challenges, the CBD industry remains a wide-open door for anyone with the skill and perseverance to walk through.

Armed with the right information, these challenges become insurance that competitors won’t make it as far as you have in the CBD industry. There are five major steps you’ll need to take when starting a white label CBD brand, and we’ll break it all down for you in this guide.

Step 1: Research compliance and lab testing

CBD is unlike any other industry. While recent efforts to synthesize cannabinoids from terpenes have met with some success, Cannabis sativa remains the sole commercial source of CBD, THC, and all the other cannabinoids so far discovered by science. Although many jurisdictions have liberalised cannabis laws in one way or another international laws remain antiquated.

Processing and marketing CBD is perhaps easiest in the United States, but even the American market has its challenges. Check your knowledge on CBD compliance:

• In what way did the 2014 Farm Bill open the American general market to CBD sales?
• How did the 2018 Farm Bill cement these changes into law?
• Is the FDA currently deliberating how to regulate CBD?

If you don’t know the answers to these questions, you have some research to do before you start selling CBD. While crackdowns on upstanding CBD companies have historically been rare, there’s no telling what the coming years will bring. Plus, rarity does not excuse the brutality with which the FDA has brought the hammer down on CBD companies it deems “non-compliant.”

It’s certainly possible to sell CBD in the United States, but the process can be so complicated that many newbie cannabis entrepreneurs deem the enterprise impossible prematurely. Selling CBD is actually easier than selling THC-rich weed in the United States despite mounting marijuana legalization efforts nationwide.

What about lab testing?

It used to be possible to get away with limited or even no testing whatsoever as a CBD company. Things have changed. Met with an overwhelming number of options, consumers can only buy from brands that fit their particular tastes.

Consumers in the 21st century want CBD products that are naturaland most importantly, thoroughly lab-tested. It doesn’t matter if you have an in-house lab at your production facility⁠—you’ll need to have an independent third party lab test each batch of your CBD products for contaminants and potency if you want consumers to trust you with their dollars.

That’s one of the reasons it’s often easier to white label CBD oil rather than opting to produce it yourself. CBD white label manufacturers have to provide access to high-end labs to stay competitive, which provides you with access to the nation’s best and often costliest labs for a fraction of what it would set you back to send your own oil in for testing.

Step 2: Identify your audience

If you’re new to the CBD market or you’ve been out of the game for a while, you may be surprised by how diversified the industry has become. It used to be enough to put together a “one-size-fits-all” CBD brand that covered all the bases. The truth of the matter is, though, that dozens, if not hundreds, of companies, have already entirely dominated that approach.

We’ve reached a natural level of maturation within the CBD industry. The cannabidiol market has reached an incredible level of saturation, which means brands are in hot competition for customers. Instead of starting a price war that everyone would lose, leading CBD companies are opting to land customers in new and unique ways.

• Find out how you want your brand to be different
• Remember to keep your audience focused while not keeping it too narrow
• “Health-conscious soccer moms with diabetes” might be too targeted…
• Try “busy female professionals with kids” instead!

Knowing who your audience is will empower you to reach an existing customer base once your brand is up and running. Otherwise, you’ll simply try to bash into the huge bubble that is the CBD industry without any plan.

No matter how great your products might be, you can’t sell them without a brand. The first step to making a successful brand is understanding who you want the buyers of your revolutionary CBD products to be.

Step 3: Find a reputable supplier for your CBD business

Realize that building out a full-scale lab and all the other equipment necessary to manufacture CBD takes a significant amount of startup capital. The only entities capable of putting together reliable CBD manufacturing laboratories are investors with cash to burn or successful businesses expanding their services.

What you should be asking yourself is, “What are the top-rated white label CBD labs?” Before you protest that we’ve prematurely decided that making your own CBD is impossible, let’s explain. Manufacturing CBD in bulk requires:

• Securing top-shelf genetics
• Investing in toxin-free, organic production facilities
• Preventing any contaminants from entering your products
• Growing and harvesting finicky hemp plants
• Extracting, winterizing, and distilling CBD-rich hemp extract
• Formulating CBD extract into products

It used to be the case that industry outsiders could jump in on the ground level of the CBD industry and succeed. These days, however, one of the only viable options is to secure a safe, stable source of white label CBD products and start building a brand that differentiates itself from all the other players on the market.

How to white label CBD products with the right supplier

The right CBD supplier will:

• Offer a diverse range of products
• Provide full transparency, lab testing, and product information
• Clearly express why its products are superior to a competitor’s
• Be flexible and offer to create custom products
• Offer competitive prices
• Have superior production facilities
• Be available for questions or concerns anytime

Step 4: Establish your brand

Now that you’ve found the right supplier to fuel your rise to CBD stardom, it’s time to figure out how to separate your CBD business from the competition. As industry insiders, we can say with confidence that the CBD market is going through a phase of over-saturation, and the bar to entry is somewhat higher than it was a year or two ago. With the right mindset, however, this challenge can be turned into an opportunity.

Many cannabis entrepreneurs have now turned away from CBD. Deeming the industry “too hard” to enter, they’ve left things up to a handful of 10 or so brands that dominate the market. What nobody seems to realize, however, is that these circumstances have created a perfect storm for true creative brands who want to enter the CBD market.

• The truth is that CBD isn’t novel anymore
• Consumers won’t pay for “just any” CBD
• They need to be convinced that a particular product is better for them than a competing item
• Just like eyeshadow, car tires, or any other industry, the CBD market has matured
• Diversification is now the key to success

While “off-the-shelf” CBD white label product options work for some brands, a careful assessment of your needs might make you realize a more active, customized approach would yield better results. It’s definitely still possible to succeed in the new CBD market⁠—just remember that custom formulas allow you to create unique products, and pre-made products are best for tackling high-competition CBD verticals.

Tips for making a CBD brand that pops

• Show consumers why they get something different from your brand, even if it’s just a new approach to customer service or an unusual product formulation
• Consumers have reached a certain level of fatigue regarding CBD, so make efforts to keep your product lineup fresh and significantly different from what “mainstream CBD producers” are offering
• If you decide to white label CBD gummies, try using natural ingredients and throwing in beneficial vitamins, minerals, or trending natural ingredients like spirulina or reishi mushrooms
• Integrate your web and social media presence, and learn about the latest ways that Google is rewarding FAQ-based content and penalizing wordy, wall-of-text copy

Step 5: Keep your CBD business optimized

You have a brand now, so you think you’re all done. Not so fast⁠—how are you going to prepare for changes in the future? Any effective brand strategy allows room for ongoing optimization, and the CBD industry is no different. In fact, the volatile cannabinoid market demands even more optimization than established industries, and here are a few of the categories you should focus on:

SEO

If you want consumers to learn about your brand, you need to make your site searchable. Search engine optimization (SEO) is complicated, and the rules are always changing.

Staying visible on Google and other search engine providers (SERPs) remains critical, however, so you’ll need to invest a significant portion of your marketing budget into SEO. From product descriptions to blog posts, learn which types of content Google rewards, and choose content strategies that will provide your pages with the most search impressions.

Social media

It’s up to you how in-depth into social media you get. At the very least, however, you need to make it possible for customers to find you on Facebook, Instagram, and (in some cases) Twitter. Instagram, in particular, is a hotbed of CBD advertising, but as with other social media giants, it’s hard to market CBD directly on this platform.

Instead, you’ll need to get crafty and find ways around anti-hemp censors. Expect social media optimization to take up around 10-20 hours per week when you’re getting started.

Brand adaptivity

Your business itself must remain adaptive if you want to succeed in the CBD industry. Whether that means switching suppliers, adding new ingredients, or even canceling existing product lines and developing entirely new ones, you have to stay flexible. If you start out by making your CBD brand more open-ended, it will be easier to make necessary changes as your dream takes flight.

Wrapping up: Starting a CBD business FAQ

• White label vs. private label⁠—what’s the difference?

Private labeling is when you make product lines for a single brand while white labeling is when you make product lines for many different brands. In most private labeling relationships, a supplier has made an exclusive relationship with a retailer. White labeling, however, allows multiple brands to sell the same supplier’s products.

• How do you get customer reviews?

Getting verified customer reviews is essential to building trust in your brand. Start by asking customers to leave reviews in order confirmation emails, and make sure to ask for reviews on social media as well. A Facebook user might give your business page a five-star review just for answering a question, after all.

• Is dropshipping from a warehouse an option?

Shipping your products directly from the manufacturer’s warehouse is often a simpler solution than distributing orders from your location. Some white label CBD manufacturers offer this service. 

CBD business tips: The CBD industry is changing

Whether it’s your dream to offer CBD gummies, vape, edibles, tinctures, isolate, full-spectrum, or any other type of hemp product, there’s never been a time to get started. From taxes to web hosting to compliance, there are a million-and-one things to learn as a new CBD business owner, but the five steps we’ve covered above will set you up for success regardless.

Whatever industry you’re entering, the keys to success lie in making a firm plan and persevering. In a way, CBD is just like any other industry now; it’s hard to start a brand and make an impact, but there aren’t any specific impediments in your way anymore. CBD and cannabis are becoming normalized across the globe, so even if the competition is steeper, the potential rewards are only made that much sweeter.

Accordingly, treat your CBD brand just like any other business. Reward hard work, think innovatively, and work together to succeed. CBD consumers are gravitating away from “shady weed dealers” and moving toward “trusted health partners,” so build your brand to be as transparent and honest as possible. That might mean more hard work right now, but an ethical approach will ensure your ability to ride out today’s enlightened consumer habits and come out on top as a CBD champion.

The post CBD Business Tips: How To Start A White Label CBD Business appeared first on Ministry of Hemp.

According to predictions in the 2019 Hemp & CBD Industry Factbook from Hemp Industry Daily, CBD sales could reach up to $1.3 billion this year. CBD, short for cannabidiol, is a massively popular supplement made from industrial hemp. Consumers take CBD to relieve a host of diverse symptoms. It’s believed to help balance the human endocannabinoid system when used regularly.

According to the Hemp Industry Daily predictions, CBD sales are up 133% over last year. If growth continues along the same path, CBD sales could reach over $10 billion dollars by 2024.

Of course, while many experts predict increased interest in CBD, the market could also reach a saturation point. Alternately, consumers could be put off by the hype and miss out on CBD’s actual benefits.

In any case, the billion dollar CBD market fulfills an old prediction, in an unexpected way.

From ‘Billion Dollar Hemp’ to billion dollar CBD sales

In 1938, Popular Mechanics famously promised that hemp could become a billion dollar crop. However, the authors of that report could never have predicted how their prediction would come true.

We’re going to see plenty of excitement but it’s not going to keep quality products from getting into people’s bodies and improving their lives.”

Joy Beckerman, president of the Hemp Industries Association

While humans used hemp as medicine as far back as ancient China, scientists didn’t isolate CBD in laboratories until the 1940s. When Popular Science predicted billion dollar in hemp sales, the focus was on hemp’s many other benefits. Hemp makes great paper, clothing, rope and other textiles, even building materials. It can even converted into a fuel source, among almost countless other uses. You can find articles about many of these uses for hemp on our website.

U.S. hemp growing expanded in 2019, as reflected by the massive increase in hemp growing licenses. Almost all of that hemp is grown for CBD. As a result, fiber or other forms of hemp are usually imported from China, Canada, India, or Eastern Europe.

A recent Gallup poll reported that 14% of Americans have tried CBD. Younger people make up the majority of those polled that said they’d tried CBD. However, even 8% of those over 65 reported using CBD products. 40% of CBD consumers said they used CBD products for pain. Another 20% used for anxiety, and 11% to help them sleep better.

What about the FDA?

One unknown factor in the future of the billion dollar CBD industry is how the Food and Drug Administration will rule.

Although many consumers don’t realize it, currently the CBD market is almost entirely unregulated. However, under the terms of the 2018 Farm Bill, which legalized hemp in America, the FDA will regulate the future of over the counter CBD supplement sales.

CBD is in a unique place since it’s both a medication (sold under the brand name Epidiolex as a high-end epilepsy drug) and an over-the-counter supplement, putting the FDA in a challenging position.

As Joy Beckerman, president of the Hemp Industries Association recently told us, members of Congress like Sen. Mitch McConnell would like the FDA to offer guidance as soon as possible, but that guidance could still be months or years away.

“Both congressional chambers are attempting to direct the FDA to take various forms of action via their respective Agriculture Appropriations Bills, but creating a regulatory framework could still take years depending on what directive language makes its way into law.”

A billion dollar CBD industry … and beyond?

At the same time, a billion dollar CBD industry has a lot of weight to throw around when it comes to lobbying. There’s also support in high places (like McConnell) for a path forward. It’s unlikely that this supplement will disappear entirely.

As our understanding of the human endocannabinoid system deepends, we’re likely to increase our appreciation for how CBD and other natural compounds found in hemp can help us live more balanced lives. Discerning consumers are also beginning to educate themselves about what makes a quality CBD product.

“We’re going to see plenty of that excitement,” agreed Beckerman, “but it’s not going to keep … wonderful quality-assured products from marching themselves down the field and getting into people’s bodies and improving their lives.”

The post Billion Dollar CBD: CBD Sales Predicted to Top $1 Billion in 2019 appeared first on Ministry of Hemp.

A couple weeks back, we overheard a local UPS driver shared how his wife just got her medical marijuana card and that he’s been putting money into cannabis stocks and was making a killing. After hearing about the driver’s huge success, two thoughts came to mind. The first was how cool it was talking so casually about cannabis and marijuana stocks, second was how do we get in on this?

Almost immediately, the writer perused some popular marijuana stocks and learned that many investors were in fact making money hand over fist buying marijuana stocks, but not everyone was. The cannabis market as a whole is extremely volatile, which means it’s very easy to quickly make and lose money.

However, this doesn’t mean one should shy away from these stocks. Ask a stock broker and they will most likely tell you that a diverse portfolio of mixed stocks performs best on average. Meaning, it’s about risk tolerance and balance and volatile cannabis stocks should be a small part of a stock portfolio, not the other way around.

In this article we’re going to share some “hot stocks” in the marketplace, including details on our UPS driver’s stock and share some important market information, as well as things to look out for should one decide to invest. Remember, all investments carry risk and investors need to weigh any and all risks before investing in the stock market.

INVESTING IN HEMP STOCKS: UNDERSTANDING CANNABIS MARKETS

To start, it’s important to first take a look at the entire cannabis market as a whole. This can help answer some very basic questions for investors. For example, is the industry moving in the right direction? Are certain industry sectors doing better than others? Is one more risky than another? Of course, these are just a few questions one should be asking, there are many more.

Let’s take a look at the cannabis market information as reported by Grandview Research. In 2016 the U.S. Legal marijuana market size was estimated at 7.06 billion and expected to grow at CAGR of 24.9 percent from 2017 to 2025. Globally the industry is expected to reach $32billion.

Of the two marijuana segments, medical marijuana was the largest segment and estimated to be valued at USD 100.03 billion by 2025.

When it came to products, the marijuana buds segment was estimated to be the dominant type and is estimated to be valued at USD $82.9 billion by 2025.

Cannabis Industry Sectors

Marijuana sector breakdowns were not easy to come by and choices were few. Of all the ones perused, Bloomberg’s chart was the most detailed. Even though these numbers are a few years old and market share has probably shifted some, most likely it hasn’t changed enough to significantly change the order.

1. 1. Pharma/Research USD $1.5b
   2. Producer USD $645m
   3. Consumer USD $302m
   4. Real Estate USD $216m
   5. Consulting USD $170m
   6. Tech USD $162m
   7. Industrials USD $54m

LOOKING AT CANNABIS STOCK INDICES

We’ve all heard of the Dow Jones and the S&P 500 stock indices. These major stock indices consist of groups of stocks whose combined daily performance is an indicator of how a market is doing without having to track individual stocks. According to Investopedia, “investors and other market participants use indexes to track the performance of the stock market.”

Cannabis stocks have their own stock indexes and there are plenty to choose from. Each index will have their own set of guidelines outlining the requirements a company must meet in order to be listed on that particular index. Below are three major cannabis indices.

Global Cannabis Stock Index (GCSI)

GCSI has been in existence since 2013 and they represent the overall publicly traded market for the medical and legal marijuana sector. There are currently 61 cannabis related companies listed on the index and is rebalanced every quarter.  The last rebalance took place in September and each stock was required to have an average daily trading value in excess of $600,000 and a minimum price of at least $0.25 (10-day average). Lastly, Canadian and Australian companies must have a U.S. listing in order to be included in the index.

North American Marijuana Index (NAMI)

The NAMI tracks leading stocks in the legal cannabis industry in the United States and Canada.  The North American Marijuana Index is broken down by 2 sub-indices: The U.S. Marijuana Index and the Canadian Marijuana Index.  Where a company is primarily operating determines which sub-index they’ll be listed.

The NAMI began on January 2, 2015 with an inception of 100 points.  Both indices are rebalanced quarterly on the last day of March, June, September, and December of each year.

To be included, companies must meet minimum trading requirements. They must have a market capitalization of $80 million, daily trading volume of $2million and a share price of at least $1.00. Companies with $5 million of revenues over the prior years are exempt from the above trading requirements.

The Green Market Report Index

This is the newest of the cannabis indices. The Green Market Report Index officially launched January 31, 2018.  This index consists of 30 stocks selected based on market capitalization, revenue production, plus high standards of company operations. They focus solely on pure cannabis companies with a rebalance review each quarter.

HOW TO INVEST IN HEMP

Now before you go calling your local stockbroker, it’s important to remember that while some investors make money buying cannabis stocks, many others do not. As with any investing, it’s important that you do your own research. The Motley Fool recently published an article on investing in marijuana stocks. Below is a synapsis of some key points.

Understand The Different Markets

There are basically two markets when it comes to cannabis: medical and recreational marijuana.  Medical marijuana is legal in 30 U.S. states and recreational legal in nine states. One of the most commonly used medical marijuana products is cannabidiol (CBD).

Know the marketplace you want to invest in

When it comes to cannabis, there are three type of cannabis stocks

1. Marijuana growers — These companies cultivate, harvest and distribute to the end customer.
2. Cannabis biotech’s — These companies focus on developing cannabinoid drugs.
3. Providers or ancillary products and services — These companies provide products and services to growers, such as; lighting, hydroponic systems, etc.

Understand the risks and what you’re willing to lose

For cannabis stocks, the biggest risk is the legal and political issue facing the industry. While some states have approved either both recreational and medical marijuana, or simply for medical use, but regardless cannabis is still federally illegal.

Supply/Demand imbalance

Imbalances can happen for a variety of reasons. With regards to the marijuana industry, many cannabis stock prices are valued higher than they’re worth. For example, a stock price might be overinflated because of potential future growth that analyst’s price into the present day stock price.

This can pose huge risks to the marketplace later on once the huge growth is achieved. It’s very likely the growth targets will cause a supply gut.

HOT STOCK PICKS: CANNABIS STOCKS

To give you an idea of how hot the cannabis market is, just take a look at the United States Marijuana Index.

According to Investopedia, “As of June 29, 2018 the United States Marijuana Index, despite a lot of uncertainty around regulations, has over the past 1 year gained 71.49 percent, as compared to about 12 percent gain seen by the S&P 500. Given that is not exactly an apples to apples comparison, but it does make a case to at least investigate investments in marijuana stocks.”

Tilray (TLRY)

Tilray is listed on NASDAQ. This stock is interesting because the stock was only issued to the public this past July and has already jumped over 600 percent from it’s first day IPO price. This was the first marijuana stock to go public with only 9 million shares being offered.

Many believe that Tilray could see a steep decline in the future, but for now, it’s being used to speculate the future of legalized marijuana in Canada.

Chart Basics

1. Average Trade Volume: 8,175,928
2. Market Cap: 9.406B
3. Price/Earnings Ratio (TTM): N/A
4. Earning Per Share (TTM): -.030

Canopy Growth (CGC)

Canopy Growth is listed on the NYSE. So far in 2018 this stock has climbed 100 percent. This cannabis producer has received multiple rounds of investments from beverage specialist Constellation Brands (NYSE:STZ). Many are speculating Constellation Brands will eventually buy them outright and add cannabis to its lines of brands like Corona and Svedka.

Chart Basics

1. Average Trade Volume: 1,984,482
2. Market Cap: $5.98B
3. P/E ratio (TTM): N/A
4. EPS (TTM): $.0950

Aurora Cannabis (ACBFF)

Aurora Cannabis, Inc. is listed on the OTC market. ACBFF is another big Canadian pot company. Last March, Aurora Cannabis acquired rival MedReleaf in a .25 billion all stock deal.  According to the original press release, combined, these two companies expect to produce over 570kg per year of cannabis.

Chart Basics:

1. Average Trade Volume: 1,857,787
2. Market Cap: $4.101B
3. P/E Ratio (TTM): N/A
4. EPS (TTM): -$.03

GW Pharmaceuticals (GWPH)***

GW Pharmaceuticals is listed on the NASDAQ as an American Depository Receipt (ADR). This UK Company had a huge win this past June when the FDA approved the first drug of its kind derived from pure plant CBD called Epidiolex. This drug is approved for treatment of epileptic seizures associated with Lennox-Gastaut syndrome and Dravet syndrome.

Chart Basics:

1. Average Daily Trading Volume: 463,151
2. Market Cap: $3.918B
3. P/E Ratio (TTM): N/A
4. EPS (TTM): -$9.67

Stock information provided by Investopedia.

HEMP STOCKS TO WATCH

While these two stocks haven’t experienced huge jumps like Tilray and Canopy Growth, both of these hemp companies are poised for breakouts. Also, both have stock prices near $1 per share, which may be a good opportunity for newbie investors to start with.

Global Hemp Group, Inc (OTCMKTS:GBHPF)

Global Hemp Group is listed on the over-the-counter market. GBHPF is a Canada-based company with operations in Montreal, Canada and Los Angeles, California. Currently Global Hemp Group is completing it’s hemp cultivation projects in New Brunswick, Canada, Oregon and the United States.

Global Hemp plans to develop value-added industrial hemp-based CBD products next.

Chart Basics

1. Average Trade Volume: 192.17k
2. Market Cap: NA
3. P/E ratio: NA
4. EPS: NA

Hempco Food and Fiber (OTCMKTS:HEMP)

Hemp, Inc is listed on the over-the-counter market. Hempco Food and Fiver is a producer and distributor of hemp-based products. They have a 56,000 sq. ft processing facility in Alberta, Canada, where they produce hemp-based foods. With the legalization of cannabis, Hempco plans to utilize the hemp stalk as a fiber source for industrial building and textile uses.

In 2019, Hempco expects hemp production capacity of 240,000 lbs/month.

1. Average Trade Volume: 32.13M
2. Market Cap: 6.68M
3. P/E Ratio: NA
4. EPS: $ -0.02

Stock information provided by 420intel.com.

WHERE TO LEARN MORE ABOUT INVESTING IN HEMP

Hopefully this article has whet your appetite to the huge potential hemp and cannabis stocks have right now and in the foreseeable future. As already stated, it’s very important that investors do their homework and due diligence before taking on any investment. To help get you started, below are some educational resources that offer valuable content.

• Investing 101 (Investopedia)
• How To Start Investing With Only $1000 (NASDAQ)
• Marijuana Stocks To Buy & Watch (Investor’s Business Daily)
• Avoid These Obvious Mistakes When Investing In Cannabis Stocks (Forbes)
• Cannabis Stocks On The TSX (Seeking Alpha)
• A Crash Course For Investors On Ihe Lingo of (Legal) Weed (Bloomberg Businessweek)

IN CONCLUSION: HEMP STOCKS REPRESENT AN EXCITING, VOLATILE INDUSTRY

As the cannabis industry continues to evolve there will bound to be more volatility in the marketplace just like we see today, as well as new hot-stocks to buy. We’ve included links throughout this article to help you learn more. It’s the perfect time to learn about this exciting industry. And who knows, you might end up sharing the killing you made trading cannabis stocks just like our UPS driver!

Happy trading!

Disclosure: Rob Railis owns stock positions in various industries. He does not own any positions in the stocks outlined in this article. Our Editor in Chief Kit O’Connell owns two shares of CGC, one of the stocks mentioned in this article, in addition to stock positions in various industries including a small number of shares of other cannabis stocks.

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