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HempFusion Wellness (TSX: CBD.U) (OTC: CBDHF) (FWB: 8OO) Portfolio Rising Amid Consolidation Trend in CBD Market Sector
July 15, 2021

HempFusion Wellness (TSX: CBD.U) (OTC: CBDHF) (FWB: 8OO) Portfolio Rising Amid Consolidation Trend in CBD Market Sector

  • HempFusion Wellness is raising its profile as a CBD-focused health and wellness innovator as it continues to acquire other promising industry players.
  • The passage of the U.S. Farm Bill in 2018 drove a fiercely competitive market for hemp-based CBD but a significant decline in the market during the past year’s pandemic has driven a consolidation of brands.
  • HempFusion recently completed full acquisition of Sagely Enterprises Inc. (“Sagely Naturals”), which will boost HempFusion’s retail channel by 14,000 outlets.
  • CBD remains a go-to option for many Americans seeking relief from post-workout soreness and relaxation. HempFusion’s OTC topicals are designed to meet consumer needs for pain, acne and eczema, while their CBD support capsules offer overall wellness and/or targeted support for sleep, stress or energy.

The trend toward merger and acquisition activity throughout the market for cannabidiol (“CBD”) products reflects a maturation of the fragmented sector and is generating optimism that the brands emerging from this transitional phase will be well equipped to grow during the coming years. 

Thirty-five-hundred brands cannot be supported — period — in this industry,” HempFusion Wellness, Inc. (TSX: CBD.U) (OTCQX: CBDHF) (FWB: 8OO) co-founder and CEO Jason Mitchell told Natural Products Insider in a recent interview acknowledging the number of brands has dropped to 2,000 (https://ibn.fm/BVdqa). “There just isn’t enough consumer interest. It just doesn’t make sense at all.”

Mitchell has been bullish about consolidation since just before the global sweep of the COVID-19 virus began battering CBD store fronts and larger national markets in general. HempFusion acquired Probulin Probiotics LLC, in 2019 and has since gone on to announce the proposed 100% acquisition of the holdings company that owns the Apothecanna CBD line (https://ibn.fm/mp9wQ) and, most recently, the completion of its acquisition of Sagely Enterprises Inc. (“Sagely Naturals”), a producer of premium CBD products with mass distribution in more than 14,000 retail outlets nationwide (https://ibn.fm/oI21a). 

Brightfield Group market analysts Managing Director Bethany Gomez told Natural Products Insider that Hemp-based CBD sales grew 560% in 2019 on the heels of the December 2018 passage of Farm Bill legislation legalizing once-banned hemp production and sales across the United States, but in 2020 the sector’s growth dropped to just 11%. 

HempFusion’s emphasis on regulatory compliance for hemp-derived products worldwide and its efforts to identify lucrative subsidiary markets are positioning the company to take advantage of ongoing growth in the $4.6 billion channel, which Brightfield expects to bump up to 15% this year for an outcome of $5.3 billion by year’s end. 

HempFusion ended 2020 with more than $4.19 million in net revenue but expects that number to more than triple in 2021, according to the Sagely announcement. 

And as advocates continue to push federal marijuana legalization under a newly strengthened Democratic administration (https://ibn.fm/1B6sb), hemp growers are hopeful that any strengthening of marijuana’s profile at the state or federal level will boost de-stigmatization of CBD products in areas where consumers have continued to remain wary thus far because of non-intoxicating hemp’s close familial relationship to the intoxicating hemp that produces marijuana (https://ibn.fm/A6mdT)

During the past decade, hemp-based CBD has gained a powerful following because of its reputed usefulness in easing pain and anxiety, particularly in connection with medical conditions including Parkinson’s disease, dementia, diabetes, and multiple sclerosis, as well as epilepsy in children. 

HempFusion’s products include over-the-counter (“OTC”) therapeutics in the form of topicals, as well as CBD capsules for targeted support, CBD oils and skin-soothing creams, all made using their uniquely pure, organically produced whole food hemp extract. 

For more information, visit the company’s website at www.hempfusion.com/corporate-information.

NOTE TO INVESTORS: The latest news and updates relating to CBDHF are available in the company’s newsroom at https://ibn.fm/CBDHF

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