Everyone seems to be talking about marijuana and cannabis stocks these days. Per Business Insider, legal marijuana sales grew 33% in 2017 to $9.7 billion.

Eye-popping growth like that is rare, but it doesn’t stop there: the market for hemp-derived products is growing even faster. Analysts estimate that the market for cannabidiol (CBD), a Federally-legal hemp extract used to make everything from CBD oil to edible gummy bears, will grow at 50% per year through 2020.

For cannabis investors looking to profit from CBD’s growth, there’s one company that has positioned itself as a leader: PotNetwork Holding, Inc. (OTCMKTS: POTN).

Market leader in a fast-growing niche market

There are numerous uses for cannabis, and we are just barely beginning to scratch the surface. One of these applications is the use of hemp extracts like CBD, historically used for the treatment of chronic pain. CBD, a non-psychedelic derivative, can be thought of as a sub-market of the more significant cannabis industry. It also happens to be a market that is growing at a blistering pace.

As cited in a recent research report generated by emerging-growth research firm SeeThruEquity, The Hemp Business Journal estimates that by 2020 the CBD market will grow by over 50% per year and reach $450 million. If this happens, it will make up approximately 25% of the estimated $1.8 billion hemp industry.

Building world-class CBD brands

To take advantage of this massive trend, PotNetwork continues to innovate and create new products through its First Capital subsidiary. It is at First Capital that, to borrow a cliché, “the magic happens.” First Capital focuses on the research and development of hemp extracts, of which CBD is the current focus.

PotNetwork’s success in synthesizing and bringing to market hemp-derived products (via its Diamond CBD) is impressive. Its products are now sold in all 50 states both online and via 10,000+ retail locations.

Its products (15 of which are nationally recognized), range from CBD oils, gummies, and vaping cartridges are all the rage at industry trade shows. Its popularity was on full display at the 2017 Las Vegas CHAMPS Show, where the company grossed approximately $235,000 in retail purchase orders in just three days.

POTN’s Diamond CBD subsidiary also has a strong start internationally. It was a standout at the ASD Market Week, a global event that gave the company exposure to retail and wholesale partners from 88 countries.

Already a proven, legal business

There’s no denying that there’s a cloud hanging over both the cannabis and marijuana industries. To ring in the New Year, and as detailed in the Washington Post, Attorney General Jeff Sessions announced that he was rescinding the Obama Administration’s directive (also known as the Cole memo) to not prioritize the prosecution of legal marijuana businesses in states like Colorado and Washington at the Federal level. The merits of using limited prosecutorial resources harassing legitimate companies, as opposed to illegitimate enterprises, which the Cole memo pointed the Justice Department towards, are questionable.

Attorney General Jeff Sessions has muddied the legal waters with his announcement. (Photo by Gage Skidmore via Wikimedia Commons. CC BY-SA 2.0 )

Fortunately, PotNetwork Holding has already built a high-growth business out of a legal cannabis extract. CBD is legal at the Federal level, and thus out of Jeff Session’s reach. And while industrial-scale hemp CBD is not legal in the United States, it is entirely legal for import and recreational consumption. Not only that, but some states are shifting towards the legalized growth of industrial-scale hemp production. Taking the lead are South Carolina and Arizona, which have legalized its production. States like Missouri are not far behind.

Perfectly positioned

PotNetwork Holding is at the right place at the right time. It is a market-leader in the development of hemp-extract products, primarily cannabidiol (CBD). Thanks to its legality at the Federal level, and its widely acknowledged health benefits, CBD it is one of the fastest growing market segments of the US hemp and legal marijuana market. However, there are risks.

Should the government ride in with restrictive regulations, PotNetwork will inevitably suffer. Also, Potnetwork’s laudable success coupled with increased societal acceptance of cannabis-derived consumer products could attract fierce competition from deep-pocketed competitors.

Government action will remain a cloud for the foreseeable future, but CBD’s legality is nothing new. And the trend towards broader marijuana legalization appears unstoppable.

As for competition, PotNetwork’s 15 nationally-recognized CBD brands are extraordinarily popular with consumers. The popularity of its products could not be more apparent than in the company’s financial results. While audited FY 2017’s full-year results have not been made public, the company has stated that total revenue likely exceeded $8.4 million – 50% higher than initially projected and a mind-blowing 425% increase over 2016’s revenue.

There are risks with any early-growth stock, but it’s hard to argue with POTN’s success. And after last year’s blistering financial results, PotNetwork Holding has plenty of it to go around.

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This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

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