Yield Growth (BOSS.C), a newly public company, has positioned itself to capitalize on the emerging post-farm bill CBD market in 2019.
The farm bill, signed by President Trump last week, ends the longstanding prohibition on hemp production–and CBD by extension–as well as altering the scheduling for hemp from a schedule one controlled substance to a schedule five, alongside codeine and other over-the-counter medicines.
[The bill] allows hemp cultivation broadly, not simply pilot programs for studying market interest in hemp-derived products. It explicitly allows the transfer of hemp-derived products across state lines for commercial or other purposes. It also puts no restrictions on the sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law.
-John Hudak, the Brookings Institution
Urban Juve Provisions, a subsidiary of Yield Growth, is well-positioned to take advantage of the opportunities offered by the new farm bill in 2019. Urban Juve offers a line of Ayurveda-inspired skin care products utilizing hemp root oil. They are presently available both online at the Urban Juve website and in select retail stores in Canada.
“With the recent launch of our Urban Juve products in Canada, the passage of the U.S. Farm Bill couldn’t have come at a better time for us. We are poised to capitalize on the huge opportunity presented by the United States cosmetic and wellness market and will open our e-commerce channel to the U.S. shortly,” said Penny Green, chief executive officer of Yield Growth and Urban Juve.
According to Grand View Research, the global hemp market is expected to reach $10.6 billion by 2025 with an annual growth rate of 14 percent. Among key indicators of market growth are the growing population and rising disposable income. Grand View Research said it believes these factors will contribute to an increased demand for high-quality cosmetics, protein supplements, personal care products and other health food products.
The secret ingredient in Urban Juve’s toolkit is cannabis sativa hemp root oil, which blends with both natural and essential oils to form products ranging from anti-aging serums to lip balms.
“The significance of this law change should not be underemphasized. This law marks the first change in the federal classification of the cannabis plant since it was initially classified as a Schedule I Controlled Substance by Congress in 1970, and paves the way for the first federally sanctioned commercial hemp grows since World War II,” Paul Armentano, the deputy director for the National Organization for the Reform of Marijuana Laws, said.
Given the potential for disruption that CBD introduces into industries such as wellness, makeup and leisure, YGC is hoping to catch the eye of big-name companies like Estee Lauder (EL.Z) and Proctor and Gamble (PG.Z) for a potential timely acquisition. Until they do, they say they’ll continue to expand their empire.
To that end, the company added Thomas Bond to its board of directors on Dec. 17. Bond has more than 35 years of experience in “financial and operational positions with companies engaged in cosmetics, apparel, and construction.”
Bond has previous worked with Cover FX Skin Care, Tridel and M.A.C Cosmetics until its sale to Estee Lauder in 1999. During his six year tenure with M.A.C Cosmetics, the company’s annual revenues grew from $12 million to over $300 million.
Yield Growth is also expanding on the American West Coast. Last week, the company announced its subsidiary had signed an agreement for the manufacturing and distribution of its THC and CBD products throughout Oregon.
UJ Topicals, Yield Growth’s subsidiary, has granted the non-exclusive license of its brand to its new partner, Nova Paths. According to the agreement, Nova Paths has the license and product formulations to UJ Topicals’ pain balm, analgesic pain gel and various other products including capsules.
“We are excited to bring our high-quality, Ayurveda-inspired products infused with THC and CBD to Oregon. We will now look to finding licensing partners to launch our THC infused line of topicals in other legal states such as California and Washington,” said Green.
According to New Frontier Data, the 2020 projections for total cannabis sales in Oregon are $1.04 billion, with the divisions including $856 million from the recreational market and the remaining $187 million from medical. That will firmly place Oregon as the fifth largest US market, right behind California with $3.1 billion, Washington with $2.28 billion, Colorado with $1.83 billion and Massachusetts at $1.05 billion.
We think Yield Growth is right where it needs to be.
Full Disclosure: The Yield Growth is an Equity Guru marketing client.