Although many investors have been focused on the plant-touching businesses when it comes to the cannabis industry, we believe that there is a significant opportunity for ancillary cannabis businesses.
In the 1800s, thousands of miners and entrepreneurs traveled to California in hopes of finding gold. Most of these people were unsuccessful and were unable to strike it big. Many people who were successful during this time were focused on the sale of ancillary products such as picks and shovels. Although there is a world of a difference between the gold rush and the burgeoning cannabis industry, we believe that the opportunity on the ancillary side of the industry is significant and want to highlight CB2 Insights Inc. (CBII.CN) (CBIIF) which has been flying under the radar and has massive growth prospects.
CB2 Insights is a life sciences technology company that specializes in generating real-world evidence that is related to medical cannabis. Through its United States clinical arm, the company operates more than 30 medical cannabis clinics that are staffed with leading physicians and healthcare practitioners. CB2 creates access for patients who qualify for medical cannabis and has a center of excellence to study and understand the clinical outcomes of cannabinoid therapy.
CB2 gathers data at the point-of-care in a HIPAA-compliant manner, both aggregated and anonymized, to study trends and outcomes that are used to educate and support physicians and other healthcare professionals as well as a wider group of stakeholders such as government agencies, regulatory bodies, pharmaceutical companies, licensed producers, academia and researchers.
An Attractive Operating Structure with Massive Growth Prospects
One of the reasons we are favorable on CB2 is due to the attractive operating structure. The company operates the business through three main pillars: Clinical Operations, Technology, and Data Insights. We believe that there is significant value that can be created between these divisions as well as improve the value proposition of the entire company.
Currently, CB2 generates most of its revenue from its Clinical Operations and we are favorable on the near-term growth prospects associated with this pillar. The company owns and operates the largest multi-state clinic network that is focused on cannabinoid therapy and is evaluating approximately 85,000 patients each year.
Through organic and inorganic growth initiatives, CB2 has been able to significantly advance its business when it comes to the Clinical Operations pillar and expect revenue numbers to strengthen throughout the year. The company generates revenue through operations that are for patients who come in for evaluation and education when looking to integrate cannabis into their treatment plans.
2019 has been a banner year for CB2 and we are not even halfway through the year. Earlier this year, the company acquired two new clinic groups, Relaxed Clarity and MedEval, and expect to see more acquisitions over the next year. Consolidation will be a major theme of the cannabis industry and we expect CB2 to be a major player when it comes to the cannabis clinic opportunity in the United States.
CB2’s Technology division has developed several solutions for the existing business and is an attractive aspect of the company. CB2 uses these solutions to manage its clinics, extend its data collection further downstream, engage with consumers, and monitor the purchase behavior of patients when buying their medicine.
CB2’s Data Insights business is the outcome of the previous two pillars and is what we expect to be the biggest value driver that the company brings to the medical cannabis industry as well as the traditional healthcare industries. CB2 has been designed to collect structured, critical Real-World Data that is focused on medical cannabis therapies that align with traditional healthcare protocols. Within this part of the business, the company provides an analytics tool to the industry that brings a greater understanding of the safety and efficacy associated with medical cannabis.
A Company Primed for Growth
Over the next year, we expect to see CB2 significantly expand its reach through its Clinical Operations and this should be a major value driver for the rest of the business. As the company continues to increase the number of patients that its generating data from, the database will become even more valuable and will be that much more attractive to traditional healthcare companies. CB2 is poised to be a beneficiary of the changing regulations in the United States when it comes to the cannabis opportunity and believe that this is a company to be watching.
When it comes to investing in a cannabis company, you are really investing in the management team and this is an area where CB2 excels. The company is led by a management team that has had its finger on the pulse of the cannabis industry and we are favorable on the way it has been expanding. The management team is focused on capitalizing on major medical cannabis markets and will be expanding from there. We are bullish on this strategy and the growth prospects associated with it.
One of the biggest potential catalysts for CB2 pertains to the opportunity associated with the data that it generates. From a medical cannabis perspective, CB2 has comprehensive data sets from tens of thousands of patients that are managed directly from clinical staff and speak to a patient’s indications, symptoms, traditional treatment and dosage, previous cannabis experience, potential signs of drug abuse, and more. The company is then able to provide a level of data that can speak to changes in other medication, reduction in symptoms, as well as a look at the strains or cannabinoid profiles that had the largest impact. CB2 generates all of the data that is necessary for pharmaceutical companies when they are looking to develop new cannabis-based medication or for regulatory bodies that are looking to create new frameworks.
An Opportunity to be Watching on Weakness
During the last month, CB2 has been under considerable pressure and the shares have been trading lower with the cannabis market. Although the recent decline has been significant, the entire cannabis sector has been under pressure and we are of the opinion that the recent pullback has created a fantastic opportunity for investors.
When we look at cannabis companies from an investment perspective, we look for companies that are backed by smart money. Merida Capital has been a cornerstone investor in CB2 and we find this to be significant. Based on our experience with Merida, the investment company has a very extensive due diligence process and companies must meet specific criteria if they are to receive an investment. We are favorable on the firm’s involvement and believe that is a testament to the quality of this opportunity.
CB2 has the goal of being the largest hub of medical-cannabis focused data and plans to monetize this data with medical practitioners and health associations, regulatory bodies, drug manufacturers, and data aggregators. We are favorable on the company’s opportunity and believe that the market under-appreciates its growth prospects.
The recent acquisitions made by CB2 are significant and we expect to see more acquisitions announced later this year. We believe that CB2 represents an attractive growth story and this is an opportunity to be watching. To learn more about the medical clinic and data company, please email email@example.com.
Pursuant to an agreement between StoneBridge Partners LLC and CB2 Insights we have been hired for a period of 90 days beginning March 28, 2019 and ending June 28, 2019 to publicly disseminate information about (CBII) including on the Website and other media including Facebook and Twitter. We are being paid $6,666 per month (CBII) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero (0) shares of (CBII), which we purchased in the open market. We plan to sell the “ZERO” shares of (CBII) 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 (CBII) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.