Top Hemp Stocks to Watch in 2021
Hemp stocks continue to gain much anticipated momentum with the growing global acceptance of cannabis for both medical and recreational purposes. Many countries are now looking at this cannabis sector very differently. Undoubtedly, the most remarkable moment for the US Hemp Industry was when the US passed the 2018 Farm Bill that removed Industrial Hemp and its derivatives from the list of Controlled Substances Act. Recently the UN also came up with its Recommendation 5.1 that aims at removing cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs. With the explosive growth of the hemp industry, more investors are flocking to the sector. But what are the top hemp stocks? Here we take a look at the top hemp stocks to watch in 2021.
Major Global Hemp Players
After the passage of the 2018 Farm Bill, multiple states in the US have moved towards cannabis legalization. Apart from the USA, there is a whole world out there which are also experiencing the CBD craze. Once the largest hemp producer in Europe, Romania has been actively trying to regain its position. In 2019, hemp seeds were Romania’s most traded product with the US being its top export market.
Germany is also turning into a major hemp producer. As per the German Federal Institute for Risk Assessment, the German market included more than 200 hemp-derived products between 2012-2017 with 150 of them belonging to the food segment.
Dominance was achieved by China as well after their hemp prohibition was lifted in 2010. Today, China is believed to one of the worlds’ largest hemp producers. According to this 2018 FAS report more than half of the world’s hemp supply is made by China.
The report also states that multiple media outlets believe that China accounts for 11% of the global CBD market just behind Europe and the USA. South America is also getting on the hemp bandwagon with Ecuador as an emerging player which, owing to its climate, geography and cost-benefit scenario, has a distinct advantage over US and European-based hemp companies. And, although it’s small in size, Lithuania is currently producing as much hemp, if not more, than much larger countries.
Top Hemp Stocks for 2021
The stage is set for the CBD market to become a billion-dollar industry in the coming years. The industry continues to witness volatility in the past months but investing in certain hemp stocks now may be the key to gaining significant ROI. Some of the top hemp stock investment opportunities for 2021 include:
Upcoming IPO from HempFusion (TSX: CBD)
HempFusion Wellness, one of the fastest-growing CBD companies will soon debut on the Toronto Stock Exchange under ticker “CBD”. This is the first time the Denver-based CBD company had recently announced raising a cool $17 million. Due to increased demand, HempFusion has accelerated the date in which the proposed IPO shall be accepted by the company.
HempFusion Wellness has over 46 SKUs with many more in development. The CEOs background as a product formator in the dietary supplement industry should be invaluable (he made over 300 SKUs in that past life). Their strong regulatory experience also will come in handy with OTC listed products as they can make health claims – something all their competitors cannot do, and they understand how to play federally with their self-affirmed GRAS (generally regarded as safe) designations to the FDA.
They’ve reported over $18 million in cash, with no debt, which is always a good sign. The targets for the offering price is currently between $0.90 and $1.35 but we wouldn’t be surprised if this shot up to over $5.00 in the short term after the IPO. Scaling is the name of the game here as their direct competitors (Charlotte’s Web and CV Sciences – see below) already have market caps over $400 million. If they can grow wisely and get their strongly branded products in more and more stores in the USA, Europe, and Latin America, then they should see revenues triple or more.
Will HempFusion be one of the top hemp stocks for 2021? Keep a close eye on this IPO and watch for prices to soar in the short term. If you’re looking to invest in the CBD industry, we’d strongly recommend considering a position in HempFusion (TSX: CBD).
Charlotte’s Web Holdings (OTC: CWBHF)
Charlotte’s Web is a penny stock that is potentially still one of the top hemp stocks in 2021. The company has a strong brand in the hemp industry and has a strong B2C business. Its last quarter financials showed the company has a good amount of cash reserves for future expansion in the growing hemp market. Its latest expansion into Israel with a strategic alliance with InterCure also proves the company is keen on increasing its market.
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Analysts expect sales to rise by 3.1% to $97.8 million in 2020. However, Charlotte’s sales could rise by 49.6% to $146 million in 2021 which will help it increase its adjusted earnings per share to $0.04, up from a net loss of $0.16 per share in 2019. Although at this point it’s difficult to know what will happen, we think it’s worth adding this hemp stock toy your watchlist to monitor the possibility of a 2021 comeback.
CV Sciences (OTC: CVSI)
CV Sciences, Inc. engages in the development, manufacture, and sale of consumer and pharmaceutical products. It operates through the Consumer Products and Specialty Pharmaceutical segments. The Consumer Products segment includes manufacturing, marketing, and selling of hemp-based cannabidiol products through the PlusCBD brand. The Specialty Pharmaceutical segment focuses on developing cannabinoids to treat medical indications. ‘
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But is CV Sciences one of the top hemp stocks to watch in 2021? We think that with the widely-predicted rapid CBD market growth pushing them ahead like a tailwind, they should achieve this revenue in the coming year, and keep growing beyond that level. While their stock price could move up and down before then, when they pass the $70 million annual revenue rate, we think their revenue will justify the current stock price and drive it higher. Look for short term losses followed by significant growth as we enter 2021.
The global industrial hemp market is about to reach $19.7 billion by 2025 with a CAGR of 28%. The increasing legalization and varied uses of hemp would surely drive the demand for industrial hemp to unprecedented levels. Smart cannabis stock investors would do well to get into the market now.
Top Hemp Stocks to Watch in 2021
Cannin Investment Group: Your Hemp Stocks Experts
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