Last month, we published a report that highlighted Cardiol Therapeutics Inc. (CRDL.TO) (CRTPF) as a leading player in the global cannabidiol (CBD) market and this is an opportunity that we are excited about.
Cardiol has been able to differentiate itself from the competition through the development of a proprietary nanotechology for drug formulation and delivery and through the formation of strategic partnerships with world renowned businesses such as Noramco, Inc. and Dalton Pharma Services. During the last year, the company has been nothing short of an accomplishment story and is well positioned to capitalize on a burgeoning vertical of the cannabis industry.
Demand for CBD products continues to increase as researchers learn more about the therapeutic benefits associated with them. One of the reasons we are excited about Cardiol is because it focuses on producing a premium product that does not contain any tetrahydrocannabinol (THC). Because of this, Cardiol’s products will be the first to hit the market without Health Canada’s Standardized Cannabis Symbol THC warning. We believe that the focus on producing a THC-free product provides the company with an important differentiator and expect to see strong demand from consumers who do not want to consume any THC.
Another reason we have been favorable on Cardiol is due to the focus on safety. We believe that this aspect of the story is even more significant following the increase in the number of illnesses associated with vaping. Going forward, we expect to see even more consumers prefer premium products. We expect Cardiol to benefit from this trend and believe that the market underappreciates this aspect of the story.
CardiolRx™ Represents a Major Growth Opportunity
Last week, Cardiol reported a major milestone and completed the manufacturing scale-up for commercialization of its CardiolRx™100 CBD formulation. When looking at the company’s near-term growth prospects, we are most excited about the launch of CardiolRx™ which is expected to be available in Canada in the near future. With the launch of CardiolRx™, a THC-free premium CBD product, Cardiol will be able to capitalize on the $1.2 billion CBD market (according to Prohibition Partners) and we consider CardiolRx™ to be one of the most important value drivers for the entire business.
CardiolRx™100 is designed to be the safest and most consistent CBD formulation available to Canadians. In a world where safety is of the utmost concern for consumers, the company is well positioned. CardiolRx™ 100 is produced in a Health Canada approved, FDA registered, cGMP facility. This is an important aspect of the Cardiol story and will help ease consumer concerns that are related to safety.
During the fourth quarter of 2019, Cardiol plans to commercialize CardiolRx™ 100 in the $1.2 billion-dollar market for medicinal cannabinoids in Canada and is pursuing market introduction opportunities in Europe and Latin America. CardiolRx™ 100 will initially be made available to Canadians for medical use in compliance with the Cannabis Regulations. This represents a major potential growth driver as it will fuel growth for the entire business.
An International Growth Story to be Watching
Another reason we are excited about Cardiol is the ability to capitalize on the international CBD market opportunity, since Dalton Pharma Services provides Cardiol with pharmaceutical CBD from a cGMP-compliant facility. We believe that the market underappreciates this aspect of the story.
When looking at the first potential major revenue driver for Cardiol, we are focusing on the Canadian opportunity, especially as it relates to pharmacy prescription sales. Two additional potential revenue drivers are related to the pharmacy distribution opportunity in Latin America, as well as distribution in Europe. These are two emerging markets that have been showing strong levels of demand for CBD products. Cardiol should gain traction in these markets once such products are approved for sale and we are favorable on this.
According to Prohibition Partners, Europe’s medical cannabis market is expected to be a €58 billion industry by 2028. CBD is currently being sold as an over-the-counter product in a number of countries in Europe, such as the U.K. and Germany. According to Prohibition Partners, Latin America’s medical cannabis market is expected to be valued at $8.5 billion by 2028 and is a market that continues to evolve. These two markets represent an attractive longer-term growth opportunity for Cardiol.
During the last year, we have become increasingly favorable on the CBD opportunity in Europe and in Latin America. From a pricing and economics standpoint, these markets are much more attractive when compared to the North American market and we find this to be significant. These markets are much less saturated when compared to those in North America and we will monitor how the Cardiol team is able to execute on the international CBD market.
Trading at a Discount
During the last few months, the cannabis sector has been under pressure and this is a trend that we continue to closely monitor. Although Cardiol has announced several significant milestones during this time, momentum has been trending lower and this is an opportunity that we are closely monitoring.
Cardiol Therapeutics is a company with significant near- and long-term catalysts for growth and we believe that this opportunity is flying under the radar. The company is led by a management team that has been laser focused on achieving important milestones and we are impressed with how the story has evolved so far this year.
Heading into 2020, we believe that Cardiol represents one of the most attractive long-term opportunities to have on your radar. When looking at the most significant potential catalysts for Cardiol, we are looking for the company to announce distribution agreements for the sale of CardiolRx™ in Canada. The entry into additional international markets in Europe or in Latin America would also represent a major advancement in the story. And finally, the advancement of clinical programs designed to demonstrate the impact of CardiolRx™ and CTX formulations on inflammatory heart disease will be a significant catalyst for the company.
Cardiol is not your typical CBD company and we expect to see the company’s products and formulations change the landscape of the cannabis industry. This is an opportunity that we are excited about. To be added to our Cardiol Therapeutics distribution list, please contact email@example.com.
Pursuant to an agreement between StoneBridge Partners LLC and Cardiol Therepeutics Inc. we have been hired for a period of 180 days beginning May 1, 2019 and ending November 1, 2019 to publicly disseminate information about (CRDL) including on the Website and other media including Facebook and Twitter. We are being paid $6,750 per month (CRDL) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero (0) shares of (CRDL), which we purchased in the open market. We plan to sell the “ZERO” shares of (CRDL) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (CRDL) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.