How US & UK retailers are embracing ASX listed CBD products

Published at Jul 5, 2019, in The 420 Report

CBD may not yet be approved for sale in Australian stores but this doesn't mean Australian listed companies aren't pursuing the offshore market opportunity where regulations have paved a path for this growing industry.

Elixinol Global Limited (ASX:EXL) and Creso Pharma Limited (ASX:CPH) are accelerating their global exposure, and providing evidence for us to wonder - how long will it be until Australians can purchase the same products in their own neighbourhood?

While both companies have operations across multiple cannabis verticals, images of products on shelves in America and the United Kingdom highlight how hemp and CBD are hitting the mainstream.

A report by the World Health Organisation (WHO) last year showed CBD may help treat symptoms relating to Alzheimer’s Disease, Parkinson’s Disease, MS, pain, anxiety, depression, cancer and diabetic complications, but regulation regarding its use varies around the world.

Elixinol Global's recent investor presentation in May pictured its products in Safeway (owned by Albertsons) retail store in America. The company expects its products to rollout to 330 stores initially but is eyeing exposure across up to 1,000 stores.

"In the US, we are experiencing products on the back of growing consumer demand. We are very excited to receive our first order from Albertsons, one of the largest national retailers in the US," said Elixinol Global CEO Paul Benhaim.

Elixinol Global also signed significant retail agreements over the quarter for the UK which will see its CBD products advertised on TV and stocked on shelves in major retail stores and pharmacies in the coming months.

According to Paul Benhaim, "We see similar opportunities across many of the global markets that we are currently operating in, with ongoing discussions expected to lead to further agreements over the coming quarters."

Creso Pharma Limited (ASX:CPH) has also just celebrated its debut on to retail shelves, securing distribution of its unique CBD hemp-based, human health nutraceutical product cannaQIX® in two major retailers in the United Kingdom, Boots and Holland & Barrett International.

The distribution deal is a milestone for Creso Pharma as it represents the accelerating expansion and commercialisation of its product cannaQIX® which is being sold under the Pharmacare umbrella brand Naturopathica and product name Naturopathica CBD Lozenges.

“Accelerating the commercialization of cannaQIX® through distribution to the UK’s largest retailers is an exciting milestone for Creso Pharma. Our partnership with Pharmacare Europe has proved successful and been validated by significant distribution with recognised and respected retailers Boots and Holland & Barrett," said Creso Pharma’s CEO and Co‐Founder Dr. Miri Halperin Wernli.

The product cannaQIX® offers consumers a safe and effective certified Food Supplement with CBD which has broad market access without the need for medical prescription.

The operational milestone for Creso Pharma is also significant in the light of the recent AUD $122 million takeover offer it received from PharmaCielo Limited (TSXV: PCLO) last month.

According to the Cannabis Trades Association UK, the number of cannabidiol consumers increased from 125,000 in 2017 to 250,000 in 2018 in the United Kingdom.

In America, Cowen & Co. recently reported almost 7% of Americans are using CBD which is projected to grow to 10% of Americans by 2025. The investment research firm says the market already generates as much as $2 billion in sales which could grow to $16 billion by 2025.

While potential users of CBD will have to wait on the sidelines in Australia for now, investors in these companies are monitoring global regulatory developments and the anticipated expansion of product on shelves.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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