Leading cannabis e-commerce solutions provider CannaOne Technologies (CSE:CNNA) (OTCPK:CNONF) could be poised for massive growth in the coming months as lawmakers in the US put into action legislation designed at accelerating the process of regulatory approval for CBD products.
Massive CBD Demand
The Vancouver-based company designs tailor-made e-commerce platforms specifically for the cannabis industry and currently has deals in place to establish the first CBD focused e-commerce site in Canada. However, while the Canadian CBD market is expected to be worth around $1 billion by 2024, the US market eclipses its northern neighbor by a long shot, with net revenue expected to be $23.7 billion for the same period. That value, however, can only be fully achieved with the advancement of regulations in the US—something that appears to finally be happening.
Regulatory Limbo
In December 2018, CBD was federally legalized when Donald Trump signed the updated Farm Bill into law, which decriminalized hemp farming and allowed for cultivation on an industrial scale. The passage of that bill, which Trump described as a “bipartisan success,” was heralded as a landmark moment for the industry—so why have things stagnated since?
Over a year has passed since that landmark legislation, and CBD companies in the US remain just as far from their end goal as they did then. The matter moved on to the Food and Drug Administration (FDA), the body tasked with drafting and implementing the necessary regulations. This process of regulatory alignment is a lengthy one and can take years to fully craft and put into action, meaning the overnight success that many CBD firms envisaged remains just a dream.
Until now! A bipartisan group of US lawmakers is working to push through the House Bill H.R.5587, which would instruct the FDA to remove any restrictions on the use of hemp in food products. This sweeping new legislation would essentially circumvent the lengthy oversight process the FDA is currently undertaking and allow for many CBD products to be sold as dietary supplements, blowing the market wide open.
So, with demand for CBD growing at over 100% annually and new legislation paving the way for CBD producers to meet that demand, all we're missing is a space for consumers to meet suppliers in the middle. This is where CannaOne Technologies (CSE:CNNA) (OTCPK:CNONF) comes in.
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Enter CannaOne Technologies (CSE:CNNA) (OTCPK:CNONF)
As we've mentioned, CannaOne designs custom-made e-commerce solutions specifically for the CBD market. The company currently has deals in place to launch platforms in the UK, Canada, and Mexico and already has an established marketplace in the US—the BWell Market.
CannaOne Technologies (CSE:CNNA) (OTCPK:CNONF) launched BWell in the US midway through last year, making it one of the first sites to take advantage of the emerging CBD e-commerce space. BWell has already signed up some of the most popular brands on the market, such as Select CBD and CBD-FX.
"We're one of the only companies that have developed our own proprietary software, which is specifically developed for e-commerce in the cannabis industry. The advantage of owning our own proprietary software is that we can swiftly adjust and develop the framework to changes in the industry and regulations as the global markets continue to allow sales for CBD and THC cannabis products," said CEO Solomon Riby-Williams.
Mexican Legislation
It's not just the US where the regulatory landscape is changing in favor of cannabis firms. In October 2018, Mexico's Supreme Court ruled that an absolute ban on the recreational use and possession of marijuana was unconstitutional. As Mexico's highest court reached this conclusion five times across two years, Mexican law dictates that this must then become the status quo, which basically forces lawmakers in the country to come up with the regulatory framework for a legal market environment by no later than the end of April.
CannaOne Technologies (CSE:CNNA) (OTCPK:CNONF) is already ahead of the curve in bringing cannabis e-commerce to Mexico, thanks to its joint venture with Manna Health Services. Given the ease at which the company can integrate new marketplaces on to its platform, CannaOne looks set to dominate the e-commerce space in Mexico from the get-go.
"The Mexico CBD marketplace branded 'Casa CBD', will be the home of premium CBD products to service the massive Mexican market. BloomKit, our proprietary software, will provide the technology foundation for this online buying platform and it is with extreme confidence that we look ahead to acting in our role as a critical service provider in the future of Casa CBD," said Mr. Riby-Williams.
The Takeaway
“We believe online cannabis sales will inevitably be the way of the future and it is such global transformation that we see happening here and now,” were the words of Mr. Riby-Williams, and judging by recent market trends and the impressive growth CannaOne Technologies (CSE:CNNA) (OTCPK:CNONF) has seen in recent months, it's hard to argue with his point. CannaOne stock is currently trading for $0.19, which looks like a real bargain given the billion-dollar growth in CBD and its niche market position.
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