Aug 09, 2022 (WallStreetPR via Comtex) -- The rally across the stock market over the past six weeks has been sharp and powerful, driving new money off the sidelines and dealing a major blow to bears, with the Nasdaq lifting over 20% higher since June (1). Retail investors appear to be active once again, powering meme stocks and growth names higher as interest rates cool off ahead of Wednesday's critical CPI inflation data point (2).
Among the best performing names, we see several themes pushing to the forefront so far in August. One of the most interesting groups to catch fire this month is the cannabis and CBD space (3).
Cannabis stocks like HEXO Corp. /zigman2/quotes/206508254/composite HEXO -1.58% and Tilray Brands Inc. /zigman2/quotes/209129655/composite TLRY -7.27% have been soaring higher, up 25% and 21%, respectively, over the past week alone (4, 5)
But the bigger story may be in CBD stocks, where momentum has been just as prevalent, but the rally may have even more room to run. Companies with strong ties to the CBD space include Altria Group Inc. /zigman2/quotes/208895754/composite MO +0.35% , Jazz Pharmaceuticals PLC /zigman2/quotes/202658513/composite JAZZ +0.48% , SNDL Inc. /zigman2/quotes/213489825/composite SNDL -4.62% , Cronos Group Inc. /zigman2/quotes/206842762/composite CRON -3.47% , cbdMD Inc (nyseamerican:YCBD), and Village Farms International Inc. /zigman2/quotes/207525872/composite VFF -2.75% , as well as an emerging small cap name still trading on the OTC: Ubiquitech Software Corp. /zigman2/quotes/202074176/delayed UBQU 0.00% , which is the official publicly traded ticker for the CannazALL brand.
As we note below, some names in the cannabis and CBD space have crossover relevance to the multi-trillion-dollar metaverse theme as marketing and commerce channels for these products expand into the new technological frontier. (6)
Drilling deeper, CBD may have an even more appealing long-term growth narrative than Cannabis due to its smoother legislative runway toward national acceptance and what appears to be the more dramatic underperformance of CBD stocks over the past two years relative to long-term industry growth forecasts.
As of 2022, CBD that comes from hemp and has 0.3% or less THC is already legal at the federal level whereas pot doesn't have federal clearance with many roadblocks still ahead (7). In addition, the total Global CBD Market is estimated to reach USD $47.22 Billion by 2028, up from USD 4.9 Billion in 2021, growing at a compound annual growth rate of 21.3%. That's a stunning growth outlook. Even more remarkable is the fact that many stocks in the CBD space have declined by 75-90% over the past 24 months. (8)
With that in mind, we take a closer look below at some of the most interesting stories emerging in the CBD space as fresh momentum catches fire in these beaten down names.
Jazz Pharmaceuticals PLC /zigman2/quotes/202658513/composite JAZZ +0.48% operates as a biopharmaceutical company focused on the identification, development and commercialization of pharmaceutical products in the areas of narcolepsy, oncology, pain and psychiatry.
Its product portfolio includes: Xyrem, Xywav, Sunosi, Erwinaze, Vyxeos, Defitelio, and Zepzelca. The company was founded by Bruce C. Cozadd in March 2003 and is headquartered in Dublin, Ireland.
Jazz Pharmaceuticals PLC /zigman2/quotes/202658513/composite JAZZ +0.48% recently announced top-line results from the Phase 3 RELEASE MSS1 trial (NCT04657666) evaluating nabiximols oromucosal spray (JZP378, or Sativex (R), ex-U.S.) on clinical measures of spasticity in individuals with multiple sclerosis (MS). Nabiximols oromucosal spray is a complex botanical mixture formulated from extracts of the cannabis sativa plant and contains the cannabinoids delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD), as well as other cannabinoid and non-cannabinoid components.
"We remain committed to the nabiximols program and are actively assessing the RELEASE MSS1 trial results, which will be presented at a future medical meeting. We look forward to additional data from two other ongoing trials that have the potential to support a U.S. FDA New Drug Application submission," said Rob Iannone, M.D., M.S.C.E., executive vice president, global head of research and development at Jazz Pharmaceuticals. "I would like to extend a heartfelt thank you to all those who supported and made this study possible, including the patients who were enrolled, their families, our investigators, staff, and all of the dedicated Jazz employees." (9)
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 2% in that timeframe. (10)
Jazz Pharmaceuticals PLC /zigman2/quotes/202658513/composite JAZZ +0.48% managed to rope in revenues totaling $932.9M in overall sales during the company's most recently reported quarterly financial data — a figure that represents a rate of top line growth of 24.1%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($771.3M against $705.4M). (11)
Ubiquitech Software Corp. /zigman2/quotes/202074176/delayed UBQU 0.00% is one of the more interesting speculative names in the CBD space. Through its subsidiary CannazALL, UBQU is rapidly pushing toward a possible leadership role in the hemp CBD health industry as the industry expands. The company utilizes its state-of-the-art global internet marketing, Metaverse marketing, Affiliate marketing, Direct Response (DRTV) Television, Radio, Internet Content, SEO, and traditional marketing to drive traffic to the CannazALL.com Website to succeed in the multi-billion-dollar industry CBD health space.
UBQU is particularly interesting because it is working from a very small market cap of just $5.4 million but has an established brand and ties together CBD and metaverse themes, linking it outside of the cannabis and CBD space to technology names such as Unity Software Inc. /zigman2/quotes/221035391/composite U -1.81% , Roblox Corp. /zigman2/quotes/223883423/composite RBLX +0.36% , NVIDIA Corp. /zigman2/quotes/200467500/composite NVDA -0.07% , and Snap Inc. /zigman2/quotes/205087158/composite SNAP +0.53% , as the multi-trillion-dollar metaverse investment premise gains traction. (12)
Ubiquitech Software Corp. /zigman2/quotes/202074176/delayed UBQU 0.00% announced just this morning that it has joined Rakuten, the world's largest Affiliate Marketing company and platform. By joining Rakuten, the company expects to dramatically expand its Affiliate marketing revenue streams on sales of hemp derived CannazALL CBD products. According to its release, CannazALL currently implements its own in-house Affiliate program, plus its Affiliate program on ShareASale. In adding Rakuten, the company now has access to many more Affiliate publishers and a significantly expanded reach in the market.
UBQU CEO James Ballas noted, "We believe that affiliate marketing is a great way to get the word out about our products and to create new customers daily. This is a big addition to our marketing program and the Company expects growing sales through our affiliate partners in fourth quarter and beyond"
With its Affiliate Marketing programs CannazALL Colorado grown and formulated CBD, which currently offers over 35 products, is marketed on hundreds of websites, blogs, news articles, and more, and the Company provides many special product promotions and incentives to its growing list of Affiliates to drive traffic and sales. The Company will keep shareholders apprised as to its newest Affiliate program through further news and Tweets.
Ubiquitech Software Corp. /zigman2/quotes/202074176/delayed UBQU 0.00% CMO Frank Casella added, "In keeping with our aggressive strategy for e-commerce, we have always recognized the power of these types of programs, and our decision to go with the largest and most effective was very exciting for everyone here. We're looking forward to a long and lucrative relationship with Rakuten. (13)
Cronos Group Inc. /zigman2/quotes/206842762/composite CRON -3.47% engages in the production and distribution of cannabis. Its brands include PEACE NATURALS, COVE, Spinach, Lord Jones, and PEACE+.