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FDA On Marketing CBD-Infused Products; Margins Too Good To Ignore

On June 16, 2019, the FDA released a report called “What you need to know (and what we’re working to find out)” where they stated, “We are aware that there may be some products on the market that add CBD to food or label CBD as a dietary supplement. Under federal law, it is currently illegal to market CBD this way.”

However, when asked which instances of CBD marketing might initiate legal proceedings, the FDA was silent. The agency has opened a docket for the public to submit comments through July 16, 2019, to which there are 2,554 comments as of today.

From ice cream to beverages, brands are pushing to launch CBD-infused products, and stores like Walgreens, Kroger and CVS have indicated that they would sell them.

What’s more, today over 1,000 CBD-infused products are now available online. So if it’s still federally illegal, why such an influx in interest? The answer is in the margins.

It is not at all unusual to see CBD-Infused beverages retail around $5 per 16-ounce bottle. To compare, a 16.9-ounce bottle of  Nestle water runs around .54 cents. It does not take a finance guru to understand that those markups are worth the investment. That said, CBD-Infused beverage companies have become a hot commodity.

One company we have been watching closely is Real Brands, Inc. (“RLBD”). RLBD is a Hemp-Derived Brand Building company based out of Pompano Beach, Florida.

RLBD’s product base includes capsules, powders, tinctures, and salves/balms formulated for Pain, Rest and Relaxation, Energy and Immune Support. While researchers are still trying to determine CBD’s effects, some studies suggest it can help treat inflammation, pain, anxiety and even seizures.

Today we’re highlighting: Real Brands, Inc. (OTCPINK: RLBD), Freedom Leaf Inc. (OTCQB: FRLF), CBD Unlimited, Inc./ENDEXX Corp. (OTCPINK: EDXC), Global Hemp Group Inc (OTCPINK: GBHPF), Golden Leaf Hldgs. Ltd (OTCQB: GLDFF).   

Real Brands, Inc. (OTCPINK: RLBD), (Market Cap: $14.913M); (Share Price: $0.099), Real Brands, Inc. is a brand building company in the Legal Hemp and Cannabis industry. The company’s acquisition strategy is for accretive acquisitions of trademarks, patents, other IP and related business opportunities that can be efficiently integrated into the company’s infrastructure and financial capabilities so that the company can benefit from the gross profit contribution from distribution, licensing, joint ventures and other opportunities. In May RLBD signed a Letter of Intent with Integrative Medicine US, of Coral Springs, Florida, to acquire their proprietary CBD formulas consisting of Ancient Chinese Medicine and other Ancient Herbal Remedies that they have paired with the latest scientific breakthroughs in endocannabinoid systems, nutrients and CBD.

 

Freedom Leaf Inc. (OTCQB: FRLF),(Market Cap: $47.152M); (Share Price: $0.1523), Freedom Leaf is a hemp consumer packaged goods company providing premium hemp CBD health products across advanced care, consumer and pet markets to promote greater health and wellness. FRLF is a clean-health company, establishing a new direction in care with plant-based products designed to naturally restore and revitalize. FRLF’s consumer promise of “your health first” underscores its universal commitment to produce premium-quality hemp-derived CBD health products. FRLF is a diverse enterprise of branded business lines dedicated to meeting the needs of people who face health challenges and those who are healthy.

The company announced in May its entry into a definitive agreement to acquire ECS Labs LLC, including its two wholly-owned operating subsidiaries, which collectively constitute the “Green Lotus” premium hemp oil products brand. The acquisition is expected to generate a substantial increase in revenue for Freedom Leaf while providing Freedom Leaf access to a more robust portfolio of products, enhanced distribution capabilities and penetration in attractive emerging CBD markets worldwide.

CBD Unlimited, Inc./ENDEXX Corp. (OTCPINK: EDXC), (Market Cap: $106.109M); (Share Price: $0.35), CBD Unlimited, Inc. develops and distributes consumable product lines derived from hemp. Its products include CBD oils, CBD delayed release veggie-caps, CBD for pets, CBD topicals, and CBD drinks. The company was formerly known as ENDEXX Corporation and changed its name to CBD Unlimited, Inc. in November 2018.

The company announced on June 24th, 2019 an increase to its fulfillment capacity as the company continues to grow its e-commerce presence. The company has ramped up operations across all e-commerce platforms and its affiliate program. The company now has multiple affiliate partnerships in place supporting inventory, order fulfillment and customer service.

Global Hemp Group Inc (OTCPINK: GBHPF), (Market Cap: $9.672M); (Share Price: $0.0517), The company is focused on a multi-phased strategy to build a strong presence in the industrial hemp industry in both Canada and the United States. The first phase of this strategy is to develop hemp cultivation for the extraction of cannabinoids (CBD, CBG, CBN & CBC) and creating a near-term revenue stream that will allow the Company to expand and develop successive phases of the strategy. Under this first phase of the strategy, the Company has begun cultivating hemp at projects in New Brunswick, Canada and Oregon, in the United States. The second phase of the plan will focus on the development of value-added industrial products utilizing the processing of the whole hemp plant, as envisioned in the Company’s Hemp Agro-Industrial Zone (HAIZ) strategy.

 

Golden Leaf Hldgs Ltd (OTCQB: GLDFF), (Market Cap: $29.457M); (Share Price: $0.05), The company has operations in multiple jurisdictions including Oregon, Nevada and Canada, with cultivation, production and retail operations built around recognized brands. Golden Leaf distributes its products through its branded Chalice Farms retail dispensaries, as well as through third-party dispensaries. Golden Leaf’s cannabis retail operations and products are designed with the customer in mind, focused on superlative in-store experience and quality products.

The company announced in June the launch of a new addition to their Golden branded Fruit Chew product line: a single-serving, 50mg THC edible called the “Golden Blast Fruit Chew.” The Blast Chew is novel to the Oregon market—currently very few products that are available offer a single serving of 50mg THC.

Although the FDA is still unclear as to how companies can market their CBD-Infused products, there is no doubt about it that the demand for these products will continue to grow. As that happens, forward-thinking hemp-derived CBD companies, such as RLBD, are definitely worth investigating.

Legal Disclaimer:

 

This article was written by Regal Consulting, LLC (“Regal Consulting”).  Regal Consulting has agreed to a three-month term consulting agreement with RLBD dated 8/31/18.  The agreement calls for $100,000 note issued to Regal Consulting, and 2,500,000 restricted 144 shares of RLBD for three months of service.  Regal has elected to convert $73,000 of principal of the $100,000 note into 2,761,872 Restricted 144 shares of RLBD. Regal Consulting has agreed to a twelve- month term consulting agreement with RLBD dated 1/4/2019.  The agreement calls for $10,000 in cash and 500,000 shares per month. All payments were made directly by Real Brands, Inc. to Regal Consulting, LLC. to provide investor relations services, of which this article is a part of.  Regal Consulting also paid one thousand dollars cash to microcapspeculators.com to distribute this article.  Regal Consulting may have a position in the securities mentioned in this article at the time of publication, and may increase or decrease its position without notice.  This article is based on public information and the opinions of Regal Consulting. RLBD was given an opportunity to edit this article. This article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any results predicted herein.  Regal Consulting is not registered with any financial or securities regulatory authority, and does not provide or claim to provide investment advice.

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