Direct Selling Returns as Functional Cannabis Foods Fare Well Amid Landmark Legalization

CannabisNewsWire Editorial Coverage: All eyes are on Canada and the burgeoning North American cannabis market as the flood gates open and nationwide recreational legalization north of the U.S. border throws the recent $47.3 billion by 2027 forecast from Arcview Market Research into clear relief.

Historic end of cannabis prohibition creates unprecedented market forces
CBD could outpace broader market
Direct selling in the digital age more relevant than ever
Overlapping cultural vectors among core wellness and cannabis consumers
Biopharma potential immense, nutritional potential immediately accessible commercially

Already running hot at $9.2 billion last year, the North American cannabis market appears to be just getting started. Youngevity International, Inc. (NASDAQ: YGYI) (YGYI Profile) is a particularly interesting player in this space that deserves further examination considering the company’s strong logistical footprint in direct selling, the success of a shrewd and comprehensive growth model in ground coffee retail, and an established presence as one of the most trusted names in nutritional supplements. INSYS Therapeutics, Inc. (NASDAQ: INSY) has a leading position in the development of pharmaceutical cannabinoids. Developers of MARINOL, the first synthetic tetrahydrocannabinol (THC) oral solution, AbbVie Inc. (NYSE: ABBV) has been ranked in the top five on Science magazine’s annual list of Top Science Employers. Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) is known for transdermal cannabinoid therapies and recently reported the initiation of a first-of-its-kind clinical study using a novel pharmaceutically produced CBD targeting epilepsy and Fragile X syndrome. Cara Therapeutics, Inc. (NASDAQ: CARA) is at the forefront of preclinical work in selective cannabinoid receptor-modulating formulas that avoid interacting with receptors in the central nervous system.

To view an infographic of this editorial, click here.

Functional Cannabis Consumables

CBD from sources such as industrial hemp, which would be legal to cultivate in the United States under the new Farm Bill currently being considered, could post growth that eclipses that of the broader cannabis space. A strong driver here is the mounting laundry list of proven health benefits of CBD.

Youngevity International, Inc. (NASDAQ: YGYI) recently announced the launch of two new organic hemp-derived cannabidiol products designed to be used with the company’s proprietary portable water-filtering bottle system. HempFX™ Hydration™ — Sleep has added melatonin and promotes healthy sleep patterns naturally, while HempFX Hydration™ — Pure is designed to deliver 25 mg of full-spectrum CBD directly to the digestive system.

These beverages are now available online and join a growing portfolio of organic CBD-based products from YGYI, including HempFX Soothe™ for achy joints and muscles; HempFX Uplift™, which is designed to naturally elevate mood and promote overall health; and HempFX Relax™, which is packed with a wide variety of sleep-supporting botanicals.

The meteoric rise in YGYI’s share price in recent weeks to a high of $16.25, nearly triple the preceding trend of several years, was pared somewhat due to broader market declines, leading to an $11.47 close the week ending Oct 19. However, the market mini-correction in the latest FOMC meeting, where a steady and largely anticipated diet of gradual rate hikes was indicated, appears to have blown off most of its steam according to many analysts, including those at J.P. Morgan who see a reversal on the horizon as earnings season begins. The current situation could present a nice buying opportunity, should the recent upward trend again find traction.

Huge Direct Selling Network, Increasingly Global Footprint

Q2 2018 saw a 6.6 percent increase in revenues for YGYI to $44.3 million, led by a 23.7 percent jump in coffee sales. With 83 percent of total revenues coming from direct selling (up 3.7 percent) and the remainder coming from coffee, news that the company is boldly entering the CBD market has set some analysts’ mouths watering. The company’s coffee-roasting segment, run by wholly owned subsidiary CLR Roasters, has seen tremendous success with its high-energy, fat-burning JavaFit line of gourmet coffees as well as the increasingly popular Café La Rica and Josie’s Java House brands.

The same kind of combined marketing, distribution, sourcing and branded product expertise YGYI has demonstrated in mastery of the coffee game could put investors in the pole position as the company goes cannabis, especially amid a political environment where antiquated regulations are hastily going up in smoke.

In a deal further cementing YGYI’s foothold in the hospitality market, the company recently signed a massive new deal with a major operator in the cruise line industry that will put YGYI’s coffees in the bellies of the entire crew of a 60-ship fleet, as well as those of passengers on three luxury cruise ships. Youngevity has quickly built out a comprehensive coffee revenue pipeline encompassing green coffee distribution, private-label roasting and sales of owned brands, significantly enabled by an existing direct sales matrix of high-value relationships. This direct sales network is backed by an increasingly sophisticated web platform, which is helping YGYI’s expansion into global markets proceed apace of expectations.

Following Field-to-Cup Coffee Model

Youngevity’s unique field-to-cup approach to the coffee market, including sourcing its coffees from an expanding footprint in the high-mountain region of Nicaragua known for producing exceptional beans, is something the company is dedicated to emulating as it enters the cannabis market.

From the CLR Roasters plantations in Matagalpa, Nicaragua, to the company’s state-of-the-art 40,000-square-foot roasting, grinding, packaging facility and headquarters in Miami, Youngevity has mapped out a field-to-cup coffee bean road show that has met unparalleled success. With an abundance of cultural overlap among the company’s highest priority consumer segments and a solid reputation with nutraceutical and healthy lifestyle consumers, YGYI is leveraging both its assets and experience as it migrates into functional cannabis foods. Looking at its overall nutritional product assortment, the company seems to understand the importance of high-quality raw materials as it relates to developing brand loyalty among these highly sought-after demos.

Direct Selling Prowess Key to Future

Youngevity has established an enviable presence in the North American direct selling market, with a sizeable chunk of a growing $37.8 billion empire that is staffed by an army of some 18.6 million direct selling representatives. Innovations such as the company’s YoungevityGo2 app, which empowers distributors with a considerable promotional and management engine that fits in their pockets, has helped the company secure a formidable legion of dedicated direct sellers.

With such a robust direct selling model that spills over into e-commerce and social selling, it should come as no surprise that Youngevity’s CEO Steve Wallach was recently appointed to the board of directors at the 200-plus member Direct Selling Association. The merger of direct selling and cannabis could be a showstopper, and many investors are looking to YGYI to be where the rubber meets the road.

Cannabinoids Potential

The nutraceutical and cosmeceutical potential of cannabinoids is reinforced by the rapidly developing clinical and preclinical pipelines of a wide variety of companies that are looking to commercialize indications targeting everything from sleeplessness and anxiety to epilepsy and cancer.

INSYS Therapeutics, Inc. (NASDAQ: INSY) is currently working on testing the company’s oral CBD solution in the treatment of neurocognition and neuroimmune response, as well as eating behavior and other symptoms. Such work in early psychosis adds considerable weight to the studies announced earlier this year, which are using CBD to treat the symptoms of severe childhood autism. INSYS is also continuing to support ongoing efforts to study CBD as a treatment for cocaine dependency.

AbbVie Inc. (NYSE: ABBV) will always have the record of being first out of the gate with an FDA-approved, cannabis-based drug targeting nausea and lack of appetite among chemotherapy and AIDS patients. The company continues to be a contender in the space, due to the abundance of in-house expertise and facilities, where the company is forging a new path to the treatment of autoimmune diseases.

Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) made a strong case at the 16th annual International Fragile X Conference for the use of transdermal CBD gel. Its compelling and statistically significant data could be a winner for the company and could come to represent a frontline approach for alleviating the common observable behaviors Fragile X syndrome presents among children and adolescents.

Cara Therapeutics, Inc. (NASDAQ: CARA) has evaluated CR701 in animal model studies where it showed a significant reversal of enhanced pain response (hyperalgesia) and the kind of predisposition to increased pain sensitization and neuronal response to pain (allodynia) experienced among fibromyalgia patients. CARA has a considerable depth of knowledge in kappa opioid receptor science when it comes to treating chronic and acute pain, as well as disease-related itching, with indications like CR845/difelikefalin and KORSUVA, now both in Phase 3 clinical trials.

Until now, recreational consumer markets such as nutraceuticals and cosmeceuticals have always been realities perceived only by the cannabis industry’s over-the-horizon radar. But the potential for broad-spectrum biopharma indications that could help combat many incurable or underserved maladies could be an even greater development than the seemingly inevitable rise of every day cannabis-infused foods and beverages.

For more information on Youngevity, visit Youngevity International, Inc. (NASDAQ: YGYI)

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CBD Supplements Primed to Explode Ahead of Biopharma as Farm Bill Legalizes Hemp

CannabisNewsWire Editorial Coverage: With Canada legalizing cannabis nationwide in October and the 2018 U.S. Farm Bill completely removing hemp from the DEA’s controlled substances list, the stage has been set for an explosion of products ranging from functional foods and supplements to CBD-based (cannabidiol) biopharma indications.

U.S. farm bill legalizing hemp could make CBD an open-pit gold mine.
List of demonstrable CBD health benefits growing daily.
CBD growth may outpace entire cannabis market combined.

Even before the landmark inclusion of the Hemp Farming Act of 2018 in this year’s Farm Bill, plant-based nutrition experts at leading omni-direct lifestyle company Youngevity International, Inc. (NASDAQ: YGYI) (YGYI Profile) had begun marching the team towards the development of a full line of proprietary hemp-derived CBD oil products. And while the identified health benefits of CBD ranging from reducing inflammation to managing pain and anxiety haven’t entirely been proven yet, one need look no further for foundational evidence of such benefits than the success of GW Pharmaceuticals Plc’s (NASDAQ: GWPH) FDA-approved oral solution EPIDIOLEX, which is used to treat severe seizures associated with extreme forms of epilepsy. Pharma-grade medical cannabis producer Aphria, Inc. (OTC: APHQF) (TSX: APH) already has a wide selection of carefully engineered medical cannabis and CBD oil products made from 100 percent greenhouse grown strains. Cara Therapeutics, Inc. (NASDAQ: CARA) is another company that stands to benefit from easing regulations in North America. And as a principal investment firm dedicated to cultivating medical marijuana companies, Cronos Group, Inc. (NASDAQ: CRON) surely understands the potential of the space.

To view an infographic of this editorial, click here.

Cannabis Market Booming Amid Deregulation

Canada moving to fully legalize recreational marijuana across the country is a watershed event for the cannabis industry. This event will help to normalize the presence of cannabis-based medicines in the broader market, paving the way for even more widespread research into the non-psychoactive cannabinoid CBD. With more than 37 million people in North America already consuming cannabis in one form or another, even the lofty projections by Amadee & Company of a market worth over $95 billion by 2026 may be entirely possible.

After more than eight decades of prohibition, cannabis is rapidly heading towards decriminalization across the global marketplace. The latest projections from established cannabis sector analysts at Arcview Market Research and BDS Analytics indicate that the North American cannabis market will go from just $9.2 billion last year to $47.3 billion within a decade (17.79 percent CAGR), even as the global market surpasses a whopping $57 billion.

The hemp-CBD segment is set to grow at an even faster pace according to Brightfield Group, hitting upwards of $22 billion by 2022, outpacing the rest of the cannabis market combined. Hemp Business Journal estimates for the underlying hemp market, which grew 16 percent last year in the United States alone to around $820 million, are similarly encouraging, projecting the market to grow around 700 percent by 2020.

And when it comes to regulating the human body’s complex endocannabinoid receptor systems, the upper limits of the pharmaceutical value of CBD — and other phytocannabinoids such as THC — may have not yet been fully validated by clinical studies. Such studies have been and are being done.

Consumers definitely seem to have got the message about CBD and are already enjoying access to this organic compound in an increasing variety of formats. According to Cannabis Trades Association UK official data, cannabis oil users across the UK doubled last year. Given stats like that, it is little wonder that the latest numbers out of Technavio on the global CBD space project a 39.19 percent CAGR through 2021.

Established Supplement Purveyor with Scale, Presence and Reach

To many investors, the burgeoning CBD market is a natural play for a company such as Youngevity International, Inc. (NASDAQ: YGYI), a multivertical lifestyle brand that provides a wide variety of consumer goods to people all over the world via direct selling, e-commerce and social selling. In many circles, the name Youngevity is synonymous with plant-based nutrition, and as Youngevity CEO Steve Wallach recently put it during the launch of YGYI’s new proprietary HempFX^™ line of hemp-derived CBD oil products, “CBD oil perfectly complements” Youngevity’s product development philosophy.

Already known to consumers around the globe for its broad array of nutritional and healthy lifestyle products formulated using ingredients of the highest quality in state-of-the-art laboratories, Youngevity has garnered increasing prominence with the success of its wholly owned subsidiary CLR Roasters’ various gourmet boutique coffee blends. CLR Roasters is produced by a vertically integrated “farm-to-cup” pipeline stretching from the company’s fully licensed fields in Nicaragua, through a state-of-the-art roasting facility in Miami and ending up in consumer’s coffee cups all over the world. YGYI completes the last mile via direct selling, as well as extensive distribution in the cruise line industry and through a variety of private labels that the company produces for major national chains.

As Goes Coffee, So Goes Cannabis

Just to showcase the kind of scale and sophistication of the company’s closed-loop approach to delivering premium organic coffees, it is worth noting how the company recently secured a five-year contract to sell and process more than 41 million pounds per year. This was a huge deal for the full-sized coffee roaster, executed with a purchaser that has more than seven decades in the business and is a major coffee importer and exporter for some of the biggest brands in the industry today.

It is this same kind of full-spectrum approach to cultivation, production and distribution (emphasizing tight quality control as the main objective) that the company is now bringing to the hemp-based CBD business with its “field-to-finish” strategy. The HempFX line of three initial products was described as “just the beginning” when it comes to Youngevity’s move into CBD, during a recent interview with Wallach and Youngevity president and CFO Dave Briskie.

HempFX products currently include a topical muscle restoration and relief product packed with antioxidant rich botanicals called Soothe^™, a mood and cognitive performance enhancement product with St. John’s Wort called Uplift™, and a sleep aid called Relax^™ that contains melatonin and other relaxing herbs including chamomile and valerian root. Youngevity anticipates emergent revenue opportunities across the vertical as it implements a model similar to what the company has done in coffee. Wallach was keen to point out during the HempFX launch that this process would offer “tremendous advantage” to the company’s many distributors around the world.

Youngevity’s management anticipates that hemp-based CBD will become one of the fastest growing and largest supplemental ingredients moving forward, and the company is not alone in recognizing just how far the CBD market has yet to go.

CBD Market Solid Move for Future Success

GW Pharmaceuticals Plc (NASDAQ: GWPH) has been posting solid price performance since the company’s announcement in late June that the FDA approved its CBD-based oral indication Epidiolex for two forms of severe childhood epilepsy. According to the latest quarterly report, GWPH and its U.S. subsidiary Greenwich Biosciences are primed for commercial success, with a fully recruited sales organization and active engagement via clinical presentations to plans which cover more than 80 percent of the U.S. market.

Aphria, Inc. (OTC: APHQF) (TSX: APH) is gearing up for Canadian legalization big time, signing supply agreements with official distributors throughout all ten provinces and one territory this month to provide high-quality, branded cannabis for the adult-use market. Aphria also recently announced a key MOU with Canadian biotech Rapid Dose Therapeutics, the developer of the oral, fast-dissolving drug delivery system QuickStrip.

Cara Therapeutics, Inc. (NASDAQ: CARA) is a clinical-stage biotechnology company focused on developing new chemical entities designed to fundamentally change the way acute pain, chronic pain and pruritus (severe itching) are managed. Cara does this by developing new products that selectively target the body’s peripheral kappa opioid receptors. In the cannabis space, Cara has a cannabinoid receptor agonist, CR701, in preclinical development.

Cronos Group (NASDAQ: CRON) recently announced commencement of a joint medical cannabis study alongside Aleafia Health Inc., which will utilize Aleafia’s Canabo Medical Clinic network to investigate insomnia and daytime sleepiness. The primary goal of the study is to help develop nonaddicting and natural sleep aids that many consumers have been longing for, especially given more recently identified risks associated with prescription sleeping aids, such as worsening mental health and an increased prevalence of dementia. CBD and THC may become powerful tools in the fight against insomnia.

The End of Prohibition, Unprecedented Market Dynamics

It seems that consumers may have put legs under the market as the historic prohibition of the humble cannabis plant nears an end. A plant that turns out to be packed with phytocannabinoids and that may help naturally regulate a vast cell receptor network throughout numerous tissue systems in the human body seems poised to fuel an industry with untold possibilities.

For more information on Marijuana Company of America, visit Youngevity International, Inc. (NASDAQ: YGYI)