The business of legal cannabis is rapidly growing on both medicinal and recreational fronts. In fact, last year legal cannabis sales soared in the United States to $5.4 billion, a 17.4% increase.
However, cannabis itself is a fairly perplexing substance. It has close to 500 active compounds, and at least 113 of these belong to a family of diverse chemical compounds called cannabinoids.
Of this group, the two most common and researched compounds are THC and CBD – but they are vastly different. As new strains and product offerings become available in the legal cannabis sector, it is more important than ever before for investors to understand the difference between these two compounds.
Comparing THC vs. CBD: What’s the Difference?
The following infographic comes to us from food sciences company Lexaria Bioscience (OTCQB:LXRP) (CSE:LXX) and it shows the key differences between THC and CBD. It provides fundamental knowledge for investors, patients, and regulators that want to better understand this quickly growing sector of business.
In the comparison of THC vs. CBD, it’s clear that the two compounds are vastly different. While they both interact with receptors in the body, they produce different effects.
To start, THC, or tetrahydrocannabinol, is a psychoactive compound while CBD, or cannabidiol, does not affect the mind in the same capacity.
THC has the following effects on a user:
- Analgesic: Relieves pain and inflammation
- Relaxing: Creates sense of relaxation and well-being
- Drowsiness: Induces sleep
- Euphoria: Creates “high”
- Appetite Stimulant: Creates urge to eat
While CBD’s medicinal effects are making CBD-heavy strains a popular choice for patients:
- Anti-inflammatory: Combats inflammation and pain
- Anticonvulsant: Suppresses seizure activity
- Antiemetic: Reduces nausea and vomiting
- Antipsychotic: Combats psychosis
- Anti-oxidant: Combats neurodegenerative diseases
- Anti-depressant: Combats anxiety and depression
- Anti-tumoral: Combats tumor and cancer cells
- Neuro-protective: May protect neurons in the brain
As a result of these effects, THC is typically used to treat pain, nausea, sleep apnea, or stress disorders, as well as to combat the symptoms or side effects of chemotherapy, multiple sclerosis, glaucoma, AIDS, or spinal injuries.
CBD, on the other hand, is being used to treat inflammation, stress, depression and anxiety, while also being used to combat cancer, epilepsy, schizophrenia, multiple sclerosis, migraines, arthritis, and the side effects of cancer treatments.
Why Retail Cannabis Could Be the Next Big Investment Boom
Retail cannabis could flourish into a $47.3 billion industry by 2027. What makes this cannabis segment so enticing for investors and consumers alike?
Imagine being an investor in Microsoft at the time of the company’s IPO in 1986. Or better yet, buying Amazon shares while it was still just an aspiring online book store in the late 1990s.
Chances to be an early adopter in the next billion-dollar industry are far and few in between – but it’s exactly what is happening today with the nascent cannabis market. After close to a century of prohibition, cannabis is back in the limelight as legalization rolls across the U.S. and Canada.
Visualizing the Retail Boom
Today’s infographic from Choom Holdings Inc demonstrates the consumer interest in retail cannabis, and the challenges and opportunities that come with this potential.
Legal cannabis today is a lucrative modern market in the U.S. and Canada. In 2018, sales were $10.8 billion – and they are expected to grow to $47.3 billion by 2027.
Who’s driving this growth? A recent survey reveals that:
- 58% of U.S. cannabis consumers use it at least once a week
- 66% of these weekly users are millennials, aged 18 to 34
- 46% of cannabis consumers who also drink, prefer it over alcohol
- 74% of cannabis consumers who also drink, believe it to be safer than alcohol
With more people using cannabis frequently, the disruptive potential of retail cannabis becomes clear.
The Cannabis Supply Issue
Colorado, Washington, Nevada, and most recently California have been among the major U.S. states to legalize recreational cannabis in recent years.
Although cannabis sales across all states have soared, there’s one caveat to mention, which is clearly seen in the case of California. As the state began selling cannabis in stores on January 1st, it also simultaneously ran out of supply when the grey market came rushing up.
This trend of pent-up demand is clear across both mature and new markets – even Canada couldn’t escape the same supply crunch, subjecting customers to long lines and wait times on day one of legalization. For example, only one legal retail store was open in the entire province of British Columbia on October 17th.
It’s not surprising to see why cannabis is such a valuable retail product, though: dispensaries typically outsell Whole Foods and other similar retailers.
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(Source: Marijuana Business Daily)
The Value Play in Cannabis
Seizing an early adoption opportunity is a best-case scenario in the investing world.
Today, such an opportunity may come in the form of retail cannabis. The segment still faces specific hurdles, but these challenges have the potential to convert into golden opportunities as the market matures in North America:
1. Inherited demand
Legal retailers will reach new consumers as the grey market begins to come online.
2. Strong foundation
Retail cannabis is only legal in ten U.S. states, but it already shows strong promise.
3. Building bridges
Retail cannabis stores are just now opening in Canada, but licenses are hard to get.
Retail cannabis is a brave new world for consumers and investors alike – and early entrants to the industry with access to capital and a large retail footprint will likely lead the charge.
The Science Behind the $13 Billion Medical Cannabis Industry
A deep-dive into the science behind the medical cannabis industry can provide some investor insight into what makes it a multi-billion dollar market.
The Science Behind the Medical Cannabis Industry
There’s nothing quite like cannabis in the plant kingdom. Beneath its humble surface, over 750 unique compounds exist within – all of which have helped propel the cannabis industry into the multi-billion dollar market it is today.
Today’s infographic from The Green Organic Dutchman takes a deep dive into the cannabis components which contribute to its therapeutic potential, how it interacts with the human body, and the ways it can be consumed.
The Chemical Effects of Cannabis
While many people would be familiar with THC and CBD as the two major cannabinoids, there are a few lesser-known cannabinoids which also play important roles: Cannabichromene (CBC), Cannabigerol (CBG), Cannabinol (CBN), Tetrahydrocannbivarin (THCv), and Tetrahydrocannabinolic acid (THCa).
In different combinations, they work together with terpenes – aromatic oils that are present in most plants – to provide relief for a variety of ailments.
|Pain/ Sleep||CBD, THC||Cramps, Migraine|
|CBC, CBD, CBN, THC||Insomnia|
|CBC, CBD, CBN, THC, THCv||Pain|
|CBC, CBD, CBDa, CBG, CBN, THC, THCa||Arthritis, Inflammation|
|CBD, THC, THCa||Crohn’s disease|
|Mood/ Behavior||CBD, CBG||Anxiety|
|CBD, THC||ADD/ADHD, Stress|
|CBD, CBG, THC||Bipolar disorder, OCD, PTSD|
|CBC, CBD, CBG, CBN, THC||Depression|
|Neurological||CBC, CBD, CBG, CBN, THC, THCa||Amyotrophic Lateral Sclerosis (ALS)|
|CBC, CBD, CBG, THC, THCa||Parkinson’s, Alzheimer’s|
|CBD, CBN, THC, THCa||Multiple Sclerosis|
|CBD, CBN, THCa, THCv||Epilepsy, Seizures|
|Other||CBC, CBD, CBDa, CBG, THC, THCa||Cancer|
When cannabinoids and terpenes interact, the human endocannabinoid system is already equipped to deal with the entourage effects that are created.
Modern-Day Medical Cannabis
It’s clear that many cultures embraced cannabis long before scientific research came into play. Its therapeutic properties were widely recorded and extolled around the world.
After decades of restricted access and stigma, the tide is turning back towards what our ancestors discovered long ago. Millions of patients rely on medical cannabis today, with Canada and Israel paving the way in cannabis research.
Medical cannabis has been legal nationwide since 2001, aiding scientists in studying its effects.
Funding: CAD$1.4 million (US$1.05 million) invested by the government towards research projects.
Since the 1990s, medical cannabis has been legal for patients of cancer, chronic pain, and PTSD.
Funding: 8 million shekels (US$2.16 million) annual government funding to support innovation.
Back in the day, typically only dried cannabis flower was used. However, consumption methods have evolved into three broad categories today: ingestion, inhalation, and application.
The dosage of cannabis consumed is easy to control using edibles or beverages, tinctures or sprays, and capsules.
The effects of cannabis are quickly felt through smoking, vaporizing, and/or dabbing concentrates.
Transdermal patches and topicals like balms offer localized relief through a controlled dose.
Each of these methods have their own pros and cons, but in the end, they all offer the medical cannabis patient with a wide variety to choose from. Some of these forms, such as topicals and edibles, even lend themselves to the rapidly growing consumer cannabis segment.
In the seventh part of this series, we’ll delve into the rise of retail that’s set to disrupt the cannabis industry.
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