The new Texas law regarding CBD is creating new jobs in the state…

In June, Gov. Greg Abbott (R-TX) signed a bill that lets Texas farmers grow industrial hemp and also allows CBD oil (must contain less than 0.3% THC) to be sold in retail stores.

Now, cannabis has already opened up plenty of entrepreneurship opportunities across the country, but it’s promising to see “conservative” states getting in on the boom.

In fact, two women in Beaumont opened up CBD American Shaman, a CBD shop that sells CBD oils, juices, and CBD treats for both humans and pets.

We even had an interview with CBD advocate and Ultrarunner, Caleb Simpson, about the marijuana movement in Texas. His CBD company, Hemp Daddy’s, is based out of Texas, so he knows all about the rules and regulations.

In the interview, he confirmed that there is a huge pro-cannabis movement in both San Antonio and Austin.

Even Whole Foods announced that it will be selling topical CBD in the state.

Because Texas is such a conservative state, this just reiterates my prediction that 2019 would be the “Year of CBD.”

Public CBD retailers are also taking advantage of the legalization of hemp.

In fact, the king of CBD may be getting some shelf space in Texas…

Charlotte’s Web’s New Partnership

Charlotte’s Web (OTC: CWBHF) has done everything right when it comes to CBD.

And now, it is expanding across the U.S. thanks to a new partnership.

Sally asks: “What are your thoughts on Nielsen’s agreement with Charlotte’s Web to create a retail market measurement on CBD industry sector?”

Hi, Sally, I think the agreement is a good one and in the long run very helpful to the CBD industry as it grows.

It’s not particularly important to investors in the near term, though. Just about every developed industry has similar market measurements, and Nielsen is among the leaders in providing that information.

Once it starts getting good data, Nielsen can sell that information to CBD companies. Those CBD companies can then use the data to design and sell new and better products.

The information also helps when companies go to potential retail partners – they can tell the retailers exactly what products customers will most want from them, how to display and market the merchandise, information about pricing, and the like.

That in turn will give retailers the confidence they need to expand the product offerings.

Charlotte’s Web will probably see little or no immediate financial benefit from the deal, but it does further establish the company as the thought leader in the industry, in addition to the sales leader.

When any retailer or potential partner wants to learn about CBD, their first call will be to Charlotte’s Web.

And of course, in the future, all that data will help Charlotte’s Web develop its product line and focus its marketing message.

Harvest Is on HOLD

Keith M. asks: “You talk about buying stocks when they are down, but not trying to catch a falling knife? Just look at HRVSF? I feel it’s a company that needs money and won’t be around long. What’s your take?”

Keith, thanks for asking this question.

On the surface, Harvest Health and Recreation (OTC: HRVSF) should have enough money to build out its business plan and close its various mergers. It has a $225 million credit facility lined up and has over $100 million of unmortgaged real estate it can monetize if it chooses.

But that $225 million line has not closed on schedule, and it takes time to work out exactly how to get money out of all that real estate.

I think things will end fine for Harvest, but until that credit line closes, the risk is higher than I like to see.

What to Do with Supreme

Jack F. asks: “What about Supreme with its deep lows and founder selling off CA1.6 million in shares. Do we abandoned or will they come back?”

I think The Supreme Cannabis Company Inc. (OTC: SPRWF) is going to be among the most important of the smaller companies in the Canadian cannabis market. People are going crazy over the 7Acres products.

CEO Navdeep Dhaliwal apparently agrees as he’s been buying shares in the open market.

As you note, former CEO and company co-founder John Fowler has been selling shares lately, though some of those were pursuant to warrant exercises.

I never like to see insiders selling, but I worry less when other insiders are buying. After all, there are all kinds of reasons to sell shares, but there is only one reason to buy shares.

The Slip in Canopy Growth

Tim C. asks: “Hi Greg, today Canopy Growth slipped to prices not seen since around Christmas 2017. I know I’m down about 50% on my CGC position. I’m trying to hang in there, but what are your thoughts on this trend? Is it time to cut losses?”

Tim, I still like Canopy Growth Corp. (NYSE: CGC) over the long term in here.

One reason is exactly because of this terrible market in cannabis stocks. Canopy has more liquidity than any other company in the cannabis sector – over C$3.1 billion.

That gives Canopy a flexibility unavailable to any other company. It can make acquisitions of troubled companies, it can buy assets, it can basically do whatever it wants, without ever selling a single share into a down market.

The real recovery in Canopy won’t get underway until the company names a permanent CEO. But once that happens, it will be able to decide on its strategy and resume its place at the top of the Canadian cannabis industry and, eventually, get to the top of other countries, too.

That includes the United States, thanks to Canopy’s arrangement with Acreage Holdings (CSE: ACRG, OTC: ACRGF).

I hope you enjoy the rest of your weekend.

Greg Miller

Executive Director, National Institute for Cannabis Investors


Comments

2 responses to “Texas Is Getting in on the CBD Train”

  1. Regarding Canopy Growth, do you see any type of situation that could happen in the future which would cause Constellation Brands to withdraw its support of Canopy completely and abandon the cannabis market?

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