Indiana Senate now allows CBD oil in the market

By @chelean on
Cartridges of cannabidiol (CBD)-rich hemp oil for medical use are displayed during the International Cannabis Association Convention in New York, October 12, 2014.
Cartridges of cannabidiol (CBD)-rich hemp oil for medical use are displayed during the International Cannabis Association Convention in New York, October 12, 2014. Reuters/Eduardo Munoz

The US state of Indiana is set to allow the commercial use of cannabidiol oil, a substance extracted from the Cannabis sativa plant that has recently been gaining traction in the health business. The state’s senate voted 35 to 13 on Monday.

Indiana’s House of Representatives had approved a similar legislation. With both houses giving nods to the new measure, a merged version should be deliberated and submitted to the state’s governor. If signed, the bill will be implemented into a law.

Cannabidiol or CBD oil is derived from marijuana and hemp but lacks THC, the active substance that makes users high. The oil consists of compounds that can reduce the aggression of seizures of patients suffering from epilepsy.

Indiana has long opposed the use of CBD oil, even launching a clampdown against businesses selling it or products with CBD oil. But this stance softened last year when the Senate allowed those with a severe form of epilepsy to use the substance. Now, lawmakers continue to make progress with the new legislature, which comes days after Indiana’s House had called for a study.

Last WEEK, the House voted 94-0 in favour of a resolution, authored by Berne Rep. Matt Lehman, which will create a legislative commission to study medical marijuana.

Big plus for the industry

Legislative measures like these set a favourable investment climate for the US$7.7 billion (AU$9.87 billion) cannabis industry, which is poised to become a US$50 billion (AU$64.11 billion) business by 2026. Among the companies that will take advantage of this is publicly-traded PotNetwork Holding, Inc. (OTCMKTS:POTN), one of the major players in the CBD business revolution. Its upward momentum coming in from last year with soaring sales and successful projects is expected to continue this year.

The firm sells CBD oil and other products with CBD oil as the main ingredient through its wholly-owned subsidiary Diamond CBD, which has over 10,000 retailers across all 50 US states. PotNetwork has over 15 popular brands. These include flavoured CBD Hemp Oils, Blue CBD Crystals Isolate, Relax Extreme CBD collection, Chill Gummies, Relax Gummies, Liquid Gold vape liquid, flavoured CBD Hemp Oils, Blue CBD Crystals Isolate, Relax Extreme CBD collection, among others.

PotNetwork reported that its revenues in 2017 stood at US$14.5 million (AU$18.59 million), exceeding its earlier projection of US$8.3 million (AU$10.64 million), due to rapid month-over-month growth in sales.

“We are poised to continue 2017’s growth during 2018 as we embark on new and unique marketing initiatives and embrace new opportunities with the potential of providing strong returns on investment for our shareholders,” PotNetwork CEO Richard Goulding said in the statement.

Equity firm SeeThruEquity expects LLC PotNetwork’s sales growth story to continue this year and climb to US$16.7 million (AU$21.41 million) amid aggressive participation at various trade shows and conventions as well as more publicity campaigns.

SeeThruEquity tags the firm as “a high risk and high reward play” in the legal struggle of the cannabis industry to secure approval to be used for its health benefits, noting that a favourable regulatory environment will help bolster the PotNetwork’s financial standing.

PotNetwork closed 2017 with shares at US$0.10 (AU$0.13) each, growing from the start of the year’s US$0.01 apiece. SeeThruEquity projects the firm’s share price to reach US$1.25 (AU$1.60) this year, an upward adjustment from its earlier estimates, citing PotNetwork’s topline appearing “well-positioned to meet or exceed our 2018E estimate.”

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