Hemp, CBD, and The High Road to Legalization
Drug overdoses are now the No. 1 cause of accidental death in the U.S.
In 2017, more than 68,000 Americans died from drug overdoses… far exceeding the roughly 40,100 killed in car accidents or 15,500 by gun violence. And the majority (66%) of these overdose deaths were from opioids, most of them prescriptions like hydrocodone and oxycodone.
President Donald Trump has acknowledged the situation and declared the opioid crisis a “national public health emergency.”
But this doesn’t mean all opioid use is unwarranted. Doctors prescribe opioids for legitimate, short-term pain relief after surgery and major accidents.
Unfortunately, though, many of the opioid prescriptions in the U.S. are made for things like back pain and other common conditions, where opioids may not be the best option. The problem is that, after using opioids, many people become addicted. Eventually, opioid users develop a tolerance and need more and more to get the same effect.
Opioids target the area of the brain responsible for breathing. That makes a deadly overdose a real possibility. In many cases, there’s a much safer alternative to using opioids to treat pain…
It’s no secret cannabis has incredible medical benefits… including effectively treating chronic pain.
Cannabidiol (CBD) – a chemical compound found in cannabis – is particularly useful as a painkiller. In fact, unlike opioids which only mask pain, CBD can help fight pain and minimize inflammation.
In many ways cannabis is more effective than opioids, yet it remains totally illegal at the federal level. But CBD could change that…
Blame the FDA
The potential for addiction with cannabis is far less than it is with opioids. And it’s practically impossible to overdose. There’s never been a single cannabis overdose death… ever.
According to a comprehensive study from the RAND Corporation, there was a 20% decline in opioid overdose deaths in states with legal medical marijuana. A recent study published in JAMA Internal Medicine had similar findings.
And Dr. Sanjay Gupta, a nationally respected neurosurgeon, says:
Though it is too early to draw a cause-effect relationship, these data suggest that medicinal marijuana could save up to 10,000 lives every year.
Further, there are countless success stories of people being able to wean themselves off opioids using cannabis – when everything else had failed. Cannabis has been proven to mitigate opioid withdrawal symptoms like severe nausea, insomnia, and pain.
Yasmin Hurd is the director of the Addiction Institute at Mount Sinai in New York City. She discovered that CBD can help repair, at a cellular level, a brain damaged from opioid addiction. And, according to her studies, it can help heal the connections in the brain altered by opioids, which is crucial in helping to break the cycle of addiction.
Other studies have had similar results.
In other words, CBD can not only treat the underlying pain, but can help addicts kick the habit.
And that’s not even the end of CBD’s medicinal potential. CBD has already been used to help treat several medical conditions including epilepsy, PTSD, and cancer, yet it’s been extremely difficult to study the plant. That’s because the federal government still classifies it as a Schedule 1 drug, the government’s most severe classification.
Marijuana’s Schedule 1 status means the feds believe it has “no accepted medical use.” For this reason, the U.S. government has needlessly stunted the research and study of marijuana’s medicinal properties for more than 80 years.
At the same time, the FDA has given its blessing to prescription opioids, many of which are paid for with Medicaid and Medicare.
So the government has been restricting research and punishing people seeking safer alternatives like cannabis, while also subsidizing opioid use.
The Blossoming CBD Market
Besides the medicinal benefits, there’s potentially an even bigger health and wellness story to CBD. CBD is genuinely hot in this space and getting a lot of attention.
You’ve probably seen certain websites and stores selling an assortment of CBD gels, capsules, oils, sprays, and edibles. There’s a good reason for all this excitement… CBD works.
Everyday people aren’t waiting for the feds’ permission. They’re buying the CBD gels, capsules, oils, sprays, and edibles already available online and at many health and wellness stores in the U.S.
They’re seeing positive results. There are countless individual citizens who are CBD devotees and are certain of its benefits.
Because of its many applications, the potential market for CBD consumer products and pharmaceuticals is enormous.
Market research suggests the U.S. CBD market is worth at least $174 million, a small slice of the overall supplement market. But it could easily skyrocket to over $1.6 billion by 2021. As impressive as that sounds, I think it’s conservative…
CBD’s medicinal properties are so obvious that not even the braindead busybodies in the U.S. federal government can deny it anymore.
CBD’s medicinal properties are so obvious that not even the braindead busybodies in the U.S. federal government can deny it anymore.
Last June, for the first time ever, the FDA finally approved a prescription cannabis-based drug, Epidiolex, which is used to treat seizures. CBD is the active ingredient in Epidiolex.
Sales of Epidiolex are expected to reach $1.3 billion over a similar time frame as the 2021 estimates above. And that’s just one CBD product.
Earlier this month, Coca-Cola (the world’s largest beverage company) suggested it might get into the CBD market.
According to Bloomberg, a Coca-Cola spokesman said:
We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world.
Coca-Cola says it is interested in producing CBD-infused beverages that could be used to treat inflammation, pain, and cramping.
Clearly the CBD industry (itself part of the cannabis oil segment) is on the verge of an explosion.
Here’s the bottom line…
The U.S. CBD market itself could easily grow 10 times larger in the coming years. Shares of select publicly traded companies in the CBD industry could surge even higher.
Let’s take a closer look at why the CBD boom is imminent…
The Federal Legalization
of Hemp
If you’ve wondered how CBD can be sold online and in specialty stores while cannabis is still strictly illegal at the federal level, you’re not alone. It’s a muddled gray area.
Even the Drug Enforcement Administration (DEA) and the courts are confused.
Allow me to clear up some of the confusion…
Until recently, in the DEA’s eyes, CBD was just a derivative of marijuana, which is already a Schedule 1 substance. That’s of course bad news and seemed to place CBD in the most restricted category… even though it has no intoxicating effects.
However, in addition to marijuana, CBD can also be derived from the flowers and leaves of industrial hemp.
Hemp and marijuana are the same plant species, Cannabis sativa. But they are separate strains with distinct compositions and uses.
Hemp has negligible concentrations of THC. It’s pretty much impossible to get high from hemp. It also has a higher CBD content than marijuana. This is why it’s particularly useful for producing CBD oil.
And that’s where the opportunity is…
In 2018, U.S. Senate Majority Leader Mitch McConnell – the most powerful Republican on Capitol Hill – introduced a bipartisan bill to legalize industrial hemp nationwide. It was later incorporated into H.R. 2, the Agriculture Improvement Act of 2018.
The bill passed the Senate in late June in a landslide 86–11 vote, and it was signed into law by President Donald Trump last December.
Because of its overwhelming bipartisan support, I expect big business and big investors, who have largely been on the sidelines, to pour massive amounts of money into the space in the months to come.
It’s going to unleash a huge legal hemp industry in the U.S. and turbocharge the CBD market.
Nick Giambruno is chief analyst of Casey Research’s flagship advisory, The Casey Report and its premium value-investing advisory, Crisis Investing.
He writes about geopolitics, value investing in crisis markets, the global cannabis market, international banking, second passports, and surviving a financial collapse, among other topics.
