Pet CBD: The next cannabis investment opportunity?

May 13, 2021 (Investorideas.com Newswire) Investors have been drawn to the cannabis revolution ever since laws and regulations were relaxed across North America. With the path to full legalization expected to continue under the Biden administration, cannabis brands are becoming more innovative than ever, producing cannabis-infused versions of almost any product imaginable.

The latest addition to the shelves of many cannabis retailers is pet CBD. These products, designed to help treat common conditions among cats, dogs, and even horses, are fast gaining popularity. So much so, that major corporations are now interested.

With so much hype surrounding pet CBD, investors are closely following the industry. Here's what we currently know.

The pet CBD market

Right now, pet CBD is one of the fastest expanding areas of the entire cannabis industry. According to Grand View Research, the market for pet CBD was valued at 27.7 million USD in 2019, but that figure is expected to grow annually by up to 40.3 percent as companies shifting to align with consumer demand.

Evidence of this shift can be seen in both traditional pet and cannabis companies. Nestle, a pet industry giant, is now selling CBD for pets through its Garden of Life brand. Likewise, the biggest cannabis company in the world, Canopy Growth, has announced a new pet-specific line.

Other large companies in the human CBD market, like Charlotte's Web and CbdMD, are also selling new products specifically designed for pets.

Demand for pet CBD

Looking at the many online owner reviews of pet CBD, it's clear that products can be used on cats, horses, and even birds. However, the vast majority of the demand for pet CBD products is centered around CBD for dogs.

As highly active, intelligent, and sensitive animals, dogs are susceptible to many of the inflammatory-based conditions for which CBD is particularly effective. These include issues like anxiety, arthritis, and seizures, which researchers and owners have found respond to supplementation with CBD.

CBD for dogs is normally sold in the form of oil tinctures or treats, both of which allow owners to easily provide the correct dosage to their pets. In oils, a CBD extract is infused into a coconut or hemp seed oil carrier, which aids digestibility and can be dropped onto a dog's meal. Treats may be made in-house or sourced from an existing pet food supplier.

With data from prnewswire.com suggesting that a quarter of US dog owners already use hemp or CBD products themselves, there's a clear appetite for CBD supplements among consumers, and dog owners remain the main driver of pet CBD growth.

Investment opportunities

While there are a number of publicly traded cannabis companies, currently, it's not possible to directly invest in any pet-specific CBD brands or products. Instead, investors will need to buy into larger companies that produce pet CBD (or plan to produce it), or other elements of the pet CBD product journey.

This includes hemp farms, retailers, and holding companies, as well as corporate giants like Nestle who own Garden for Life. Of course, buying a stock that's indirectly connected to pet CBD means weighing up the effects of numerous other interests.

Other investment options include human pharma and cannabis companies who are now pivoting towards pets. These include Charlotte's Web, Canopy Growth, and CbdMD. Here, there are fewer variables to consider, although many brands are expected to speculate with pet products to differing levels of success.

Pet CBD brands and suppliers

With more Americans than not living close to a pharmacy or grocery store that sells CBD products, the supply of all CBD products, pet CBD included, is only expected to increase. In 2019, the nation's three largest pharmacies-CVS Health, Walgreens Boots Alliance, and Rite Aid-all announced their intentions to carry CBD topicals, while several grocery stores including Target and Whole Foods Market now sell topical CBD in hundreds of locations.

In the online space, pet and human CBD is mainly sold by brands on their own eCommerce websites. As of now, there are few large reliable CBD eCommerce retailers, and Amazon prohibits the sale of CBD or any cannabis product on their marketplace. However, a recent pilot scheme launched on Amazon.co.uk did allow ten companies to offer CBD oils, capsules, and creams through the site, suggesting that things may soon be changing.

The bottom line

Pet CBD is here to stay, with growing consumer interest, enticing profit margins, and signs that legal restrictions will soon lessen. However, current investment opportunities are scarce, and the arrival of major companies like Nestle and Amazon may be highly disruptive. All of which means that there's lots of change coming to the pet CBD space

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