These companies are racing to be top dog in the pet CBD industry
Many people are using CBD now, for everything from soothing anxiety to managing pain from arthritis. Heck, CBD can even reduce seizures.
Anecdotal evidence shows it helps with a lot of health problems. So these days, many pet owners are starting to wonder: If my pet is in pain, will CBD work for him or her, too?
For many, the answer is yes.
That’s because CBD, a powerful cannabinoid found in marijuana and hemp, shows a lot of promise in helping dogs, cats and other pets deal with a vast variety of ailments.
For example, a recent Cornell University study found that once the right dosage is determined for a pet, CBD can ease pain stemming from arthritis. Dr. Joseph Wakshlag and his colleagues found that more than 80% of the dogs in the study saw a significant decrease in pain and improved mobility.
Here’s a nifty chart showing the different ailments people are looking to CBD to help their pets with …
Now, does CBD really help fight cancer? We’ll need to see a LOT more data before anyone talks about “proof.”
In fact, the FDA recently sent a warning letter to the cannabis company Curaleaf (OTCQX: CURLF) for claims it made about CBD on its website. Some claims flagged by the FDA included saying CBD will relieve symptoms of pain, spasms, anxiety, nausea and inflammation in pets.
Nonetheless, many pet owners are brushing off the FDA’s warning. They think it’s the FDA’s job to be skeptical that CBD IS helping their pets with a variety of ailments.
In fact, people believe CBD can treat so many of the things ailing their pets that one veterinarian after another has come out with dosage charts so people don’t end up mega-dosing their Dachshund. Here’s an example …
Now hold on, you might say …
Is it even LEGAL to give CBD to dogs?
Yes. And if you’re confused about what CBD is, and whether it is legal, here’s a two-minute overview:
Cannabis plants, including marijuana and hemp, produce a group of chemical compounds called cannabinoids.
- Tetrahydrocannabinol, or THC, is the stuff that gets people high.
- Cannabidiol (CBD) is non-intoxicating and has some health benefits.
The 2018 Farm Bill legalized hemp, which contains very little THC and a lot of CBD. As long as it has less than 0.3% THC and is grown by licensed farmers, hemp is legal.
Regulation of CBD, whether derived from hemp or not, is under the FDA’s jurisdiction. This results in a weird grab bag. The FDA won’t allow CBD to be added to food or drinks sold across state lines. But it will allow it to be put into cosmetics, oils, tinctures and other supplements.
That’s why CVS and Walgreens can sell CBD oil now, but not CBD-infused drinks.
A plethora of websites sell hemp-derived CBD for pets now. Honest Paws is probably the best-known. There are others. A simple Google search will find plenty of them.
However, depending on state law, it may not be legal for your vet to prescribe CBD for dogs. So, your vet might publish a chart, but be unable to actually dose your dog for you.
With dogs, I can see it being pretty easy for you to dose your pet. My dog will eat anything that falls in her mouth, except my fingers. (Good dog!) So, putting a couple drops under her tongue would be easy.
As for a cat … well, if your cat is anything like mine about taking medicine, you’re on your own, buddy. Invest in Band-Aids.
Speaking of Investments …
According to the Brightfield Group, the CBD pet market is forecast to surge to a market size of $1.16 billion by 2022. So yeah, there are companies lining up to profit from that trend.
I’ll give you three ideas.
First, although this may not be exactly the right time to buy, take a look at Charlotte’s Web Holdings (OTCQX: CWBHF). It has a market cap of $705 million. It sells a lot of CBD, including products specifically for pets. Charlotte’s Web turns hemp extracts into chews, balms, and flavored and unflavored oils for dogs. In Q4 of 2018, the company’s revenues from animal nutrition products grew by 126%.
Second, when the time is right, look at Curaleaf. This vertically integrated, U.S.-based cannabis company has a market cap of $3.6 billion. It has 44 dispensaries in 12 different states. And it recently announced a deal to buy another company, Grassroots, which, when complete could make it the world’s largest cannabis company.
After the FDA warning, Curaleaf scrubbed its website of the offending claims, and the company says it will work with the FDA to come into compliance.
Importantly for this story, on May 10, Curaleaf announced its entrance into the pet market with the launch of Bido, a line of hemp-based CBD treats and oils for pets.
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Pet CBD Lines Are Looking Like A Major Growth Driver For CBD Companies
During the last few years, we have seen a significant increase in the number of brands that are focused on the cannabidiol (CBD) market. The rapid increase has saturated the market and has forced brands to innovate to stay relevant.
One of the areas that some CBD companies have focused on in order to differentiate itself from the hundreds of existing brands is the pet market, which has proven to be an attractive avenue for growth.
If you look at the performance of pet focused companies during the COVID-19 pandemic, you will notice that these businesses were some of the greatest beneficiaries of the stay at home orders that were issued earlier this year.
While hundreds of millions of Americans were under state issued stay at home orders, animal shelters were running out of pets that were available for adoption. The increase in the number of Americans families that have a pet has led to growth on almost every metric. From the amount of pet food that is sold to the types of veterinary services that are provided, the pet industry has been a bright spot of a uncertain future.
As it relates to the CBD opportunity for pets, we are bullish on the growth potential that is associated with the vertical. Pet owners have shown a willingness to spend money and this trend has played out on the CBD side of the industry. Today, we want to highlight 3 companies that are focused on the CBD pet market and believe that our readers need to be aware of the trend.
Earlier this month, CV Sciences (CVSI) announced the launch of PlusCBD™ Pet, a full line of hemp extracts formulated exclusively for dogs and cats. The product line is being created with the same type of hemp extracts that are used in CV Sciences’ best-selling CBD products and we will monitor how the product line gains traction.
From a distribution standpoint, CV Sciences plans to expand into the pet specialty channel and food, drug and mass retail channel. According to the Brightfield Group, the US pet CBD market grew to $321 million in sales in 2019 and is projected to reach $563 million by the end of the year.
According to the Brightfield Group, the growth is being driven by pet owners who are looking for natural alternatives to treat pets’ medical ailments (i.e. anxiety, pain, or other serious conditions) that have not responded well to other treatments. The Brightfield Group forecasts the pet CBD market to be a $1.7 billion business by the end of 2025 and we will monitor how CV Sciences is able to penetrate the market.
Charlotte’s Web (CWEB.TO) is considered to be a leader in the CBD industry and has attractive leverage to the pet side of the market. A few weeks ago, we used the company’s paw balm product after taking our dogs on a hike and were impressed with how the product moisturized and strengthen their skin.
When compared to other dog paw balm products on the market, the price of Charlotte’s Web’s product was very reasonable. The premium that was associated with CBD products is one of the main reasons we did not previously purchase CBD products. The saturation on the producer side of the industry is starting to benefit the consumer and this is a trend that we are following.
Hempfusion is a leading CBD brand in the US that is planning to go public in the near future. Although the company does not have a pet CBD product on the market, we expect to see additional products come to market in the near future.
Hempfusion is considered to be an up and comer in the CBD sector and expect to see the brand to continue to generate significant traction. We are favorable on the multi-faceted marketing strategy that was employed by the company to increase market share in the US. Over the long-term, we expect the business to benefit from emerging verticals wishing the CBD sector and will monitor how the story continues to advance.