Cannabidiol (CBD) is a going to be a massive market and represents an unprecedented growth opportunity for companies. CBD does not get you high, has incredible health benefits, and can be used an input product in a wide variety of consumer goods.

From food products to cosmetics, CBD has vast applications and this makes the opportunity incredibly exciting. We have been closely monitoring this sector since inception and have a strong understanding of the opportunities available.

Today, we are going to highlight three companies that have been capitalizing on this opportunity and are worth watching. These companies have been aggressively advancing business plans and have recently made some significant announcements.

TGOD: Becoming a Global CBD Player

When it comes to cannabis companies, we like to focus on differentiated opportunities with massive growth potential. One company that meets this criteria is The Green Organic Dutchman (TGOD.TO) (TGODF), an organic cannabis producer in Canada under the ACMPR.

Last week, TGOD announced a major acquisition of a European organic CBD producer, HemPoland. This transaction is immediately accretive and significantly enhances the organic cannabis producer’s presence in Europe. HemPoland is a leading European manufacturer and marketer of premium organic CBD oils and was the first company in Poland to obtain a state license allowing the company to grow hemp and manufacture CBD oil products.

HemPoland provides TGOD with a European gateway with distribution channels to over 750 million people and sales in over 700 locations across 13 countries. The company is vertically integrated, with over 1,250 acres of cultivation leveraging third parties, multiple commercial scale extraction units, and local distributors in Poland, Austria, Netherlands, Germany, United Kingdom, Italy, Switzerland, Portugal, Ireland, Czech Republic, Slovenia, Lithuania, and Estonia. This is a massive acquisition that significantly enhances TGOD’s presence in Europe and provides an easy route for expansion.

HemPoland is a key piece to a number of strategic acquisitions and planned partnerships focused on expanding TGOD’s global distribution network. Gaining market share with CBD products in the EU allows TGOD to establish immediate brand awareness across all verticals including infused beverages.

HemPoland is a great fit for the TGOD brand and is a leading innovative organic brand with diverse, novel product offerings and unique intellectual property. In 2017, the company produced over 32,000 kilograms of organic dried flower and 310 kilograms organic CBD oils. HemPoland has been selling a premium CBD brand in the EU and is a recognized leader.

We are favorable on this transaction and believe that TGOD has been flying under the radar. The company has been executing flawlessly across a multi-faceted growth plan and has a balance sheet that is flush with cash. The organic cannabis producer is well positioned to make more accretive acquisitions and investors need to keep an eye on this one.

LiveWell: Signs $30 Million Supply Deal and Continues to Grow

LiveWell Canada (LVWL.V) has been studying the CBD market for quite some time and has an internal research department dedicated to staying at the leading edge of this trend.  This early mover advantage has provided a significant competitive advantage and the company has been nothing short of an execution story.

LiveWell is developing a new approach to health and wellbeing through advanced cannabinoid research used in designing medical and consumer health products. Earlier this year, the company signed a strategic agreement with Canopy Growth (WEED.TO) (CGC) and Canopy Rivers to accelerate the development and commercialization of Livewell's large scale cannabis projects in Ottawa, ON and Pontiac, QC, which collectively represent over 1,500,000 sq. ft. of cannabis production and processing infrastructure.

The Canadian cannabis company has global reach and has already entered the Brazilian market. Last week, LiveWell announced a major supply agreement for 5,000 kilograms of CBD isolate at $7,000 per kilogram. This is the first supply agreement for LiveWell and we think there are more in the pipeline.

Late last week, LiveWell published a white paper on the CBD market, which can be downloaded by clicking here. The company provided a summary of its internal research to help stakeholders put into context the significance of this opportunity. We are favorable on the recent developments and believe that LiveWell has significant potential.

Earlier this month, LiveWell announced a major milestone and secured 1,000 acres of Canadian industrial hemp biomass for the purpose of extracting and producing cannabinoid (including CBD) products for distribution in Canada. Using current extraction technology licensed to LiveWell, the company anticipates extracting approximately 25,000 kg of CBD for sale under the ACMPR. LiveWell also has an option to buy an additional 1,000 acres of Canadian industrial hemp biomass and we are favorable on this growth opportunity.

LiveWell has several levers for growth and is trading at an attractive valuation when compared to its peers. We think the company is in the early innings of a major growth cycle and cannabis investors need to keep an eye on this one. LiveWell meets the traits of a company with potential due to the leading management team, continued execution, growth opportunities, and valuation.

Tree of Knowledge: An Underappreciated Opportunity

Tree of Knowledge (TOKI.CN) (TWKRF) is a story that is underappreciated by the street and we think this company is flying under the radar. Last month, the CBD company commenced trading on the Canadian Stock Exchange and traded lower with the market. Tree of Knowledge represents an attractive CBD opportunity and is one that investors should be watching.

This emerging opportunity is focused on the production and sale of CBD products via its subsidiary, EVR Brands. Demand for CBD products continues to increase and this is a trend we expect to become even more significant over the next few years. Tree of Knowledge has significant leverage to burgeoning CBD markets all over the globe and this is an attractive aspect of the story. From South America to Asia, Europe to North America, EVR Brands continues to expand its reach and we expect this to have a considerable impact on company fundamentals.

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