Why are we Excited about the Upcoming HempFusion IPO?
While everyone in the US is going ga-ga over the developments in the cannabis space in the last two months, with multiple states legalizing recreational use of the plant and a federal bill to decriminalize marijuana, a US-based company is heading to Canada to improve its fortunes. Denver-based CBD wellness company HempFusion Wellness is all set to launch its highly-anticipated IPO on January 6, 2021, on the Toronto stock exchange (TSX) under the ticker symbol CBD.U. Why are we excited about the upcoming HempFusion IPO?
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HempFusion is a CBD wellness company which operates in the health and wellness space with a whole range of hemp-based products. Its brands include HempFusion, Probulin Probiotics, Biome Research, and HF Labs. The company has a network of around 4,000 retailers across all 50 US and certain international markets through which it distributes close to 50 stock keeping units (SKUs). The company is very focused on the CBD market that is predicted to reach $16.8 billion by 2025.
HempFusion has expanded its distribution channels beyond small scale retail and e-commerce platforms into doctor and practitioner lines and networks. It has also made inroads into convenience stores and big-box retailers.
Let’s take a closer look to see why we’re excited about the upcoming HempFusion IPO.
HempFusion’s Regulatory Considerations
Regulatory compliance is difficult to obtain and it’s something that HempFusion’s main competitors (Charlotte’s Web, CV Sciences) have not yet totally flushed out. FDA compliance requires an investment of significant resources in the form of time, money, and research. Companies are made to jump through hoops for 18-24 months before getting the FDA approval. HempFusion has done the tough job of making it through the processes and gaining approvals and the company is also a board member of the US Hemp Roundtable.
“With the launch of our innovative OTC Topicals line, HempFusion provides consumers with high quality OTC products that are backed by science”, stated Jason Mitchell, Co-CEO of HempFusion. “By producing and marketing these products in accordance with the FDA’s OTC regulations, we are able to utilize active ingredients that target specific conditions for a variety of consumer needs, which we believe has the ability to substantially increase our customer base”, he said during the June 2020 product launch.
These new offerings have the potential to increase the company’s customer base as retailers will now be more confident of stocking these OTC topical products. This specialized line can become a significant revenue driver for HempFusion.
HempFusion has already started conducting studies for liver toxicology and has completed the NOAEL Safety Review for all topicals with about 30 new products under development.
Yes, regulatory compliance provides HempFusion an advantage over its competitors but why are we excited about the upcoming HempFusion IPO?
Diverse Range of Products Sold Internationally
The 46 HempFusion SKUs include specific products that help people deal with sleep, stress, and energy issues. The company’s topical line of products includes creams and ointments that target lifestyle challenges like acne, anti-aging, and sports pain relief while also addressing medical concerns like eczema and wound care.
Its Probulin probiotics products are considered to be the fastest-growing lines in the US. This product line can act as a gateway for the company to increase distribution for other products. These product ranges will expand to Europe, beginning in Ireland and then the UK, followed by the rest of the continent. The company has already been selling Probulin Probiotics products in the Middle East, China, Mexico, and South Korea.
HempFusion recently launched CBD gummies that can be sold through the convenience store route. This will be another revenue catalyst and provide the company the ability to launch and distribute newer products.
Bottom Line: Why are we Excited About the Upcoming HempFusion IPO?
Remember, Cannin.com has over two years of successful stock picks. In fact, 78% of our picks prove to be true within 30 days or less.
Simply put, HempFusion is well-positioned for the January 6th IPO. HempFusion has a management team that has charted the company’s growth path with plenty of precision. They have not rushed into product launches and instead taken time to build strong relationships. We recently covered HempFusion as “One of the Top Hemp Stocks to Watch in 20201. But should you invest in the HempFusion IPO?
Strategically, new revenue channels include natural medicine, big box retail, and convenience stores. International markets could be another huge source of revenue as countries across the world are beginning to realize the benefits of cannabis. HempFusion also had the second-largest cash position in the sector at $18.3 million as of June 30, 2020.
The target for HempFusion currently $1 – but this hemp stock could potentially soar in the short term after the IPO on January 6th, 2021. Scaling is the name of the game here as their direct competitors: Charlotte’s Web (OTC: CWBHF) and CV Sciences (OTC: CVSI) already have market caps of over $400 million. If HempFusion can effectively scale and get their strongly branded products in more and more stores in the USA, Europe, and Latin America, then the company could see revenues triple or more.
Cannin.com recommends considering a position in HempFusion (TSX: CBD) on January 6th 2021.
Why are we Excited About the Upcoming HempFusion IPO?
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