Last month, we published an article on Wildflower Brands (SUN: CSE) (WLDFF: OTCQB) and this is an opportunity to be watching. The company is levered to some of the most attractive verticals of the cannabis industry and has been nothing short of an execution story.
We believe that Wildflower Brands is a company that has massive growth potential and want to highlight how it has been capitalizing on the global cannabidiol (CBD) industry. Demand for CBD products continues to increase, and this is a trend that is just getting started. Wildflower Brands has been quietly building a platform to become a leading premium CBD brand and is well positioned to capitalize on this trend.
Over the next year, we expect to see Wildflower Brands start to generate significant revenues from the sale of CBD products and believe that the street underappreciates this aspect of the story. When looking at the Wildflower Brands opportunity, there are a number of attractive verticals of the business and believe that this causes the CBD opportunity to sometimes go unnoticed. Today, we have issued an update that discusses how Wildflower Brands is poised to be a major beneficiary of the increasing demand for CBD products and believe that this is an opportunity to be watching.
Doubles the Number of US Stores Selling Branded CBD Products
Earlier this week, Wildflower Brands reported a major development after receiving and fulfilling the initial purchase order from Dillard’s department stores. This is a significant relationship that adds to the number of big box retailers that are selling CBD products and we are favorable on the growth prospects associated with this trend. Through this relationship, Wildflower’s premium hemp CBD infused products are being offered at 292 Dillard’s locations across the US.
This relationship will double the number of retail locations in the US that offer the company’s products and we find this to be significant. One of the attractive aspects of the Wildflower story is related to the markets that it is focused on. Over the next year, the company is looking forward to entering new strategic markets such as Florida and Texas and this is something to be watching. So far, Wildflower has already received subsequent purchase orders from Dillard’s and is fulfilling orders as they are received.
At current levels, Wildflower will not be able to support the increasing demand for its CBD products and this is something to be watching. The company has been working tirelessly on finding a solution to increase production capacity and expects to have a solution to satisfy the stronger-than-expected demand for its CBD product line in the coming months.
Working to Become a Household Name
One of the reasons we are excited about Wildflower is related to the way it has been executing on a multi-faceted marketing strategy that is focused on building on the company’s established brand equity in strategic markets that can turn Wildflower into a household name. During the last year, the company has done a fantastic job at securing strategic partners that can help support growth and we find this to be significant. When it comes to turning a brand into a household name, the company must have the right collection of strategic partners to help promote the message and we believe that Wildflower has been executing on a strategy that is focused on accomplishing this.
Last week, Wildflower Brands announced the addition of a new strategic partner and reported that Free People is selling the company’s CBD-infused products through its online platform. Free People is a bohemian lifestyle and fashion brand that is part of a portfolio of global consumer brands which is comprised of Urban Outfitters, Inc. (URBN), Anthropologie, Free People, BHLDN, Terrain and the Vetri Family.
This is a significant relationship and we are favorable on the potential revenue that can be generated through it. Free People is currently offering four SKUs under the online store’s Beauty & Wellness Collection and launched products from Wildflower’s CBD+ Wellness Collection. Free People’s Beauty & Wellness Collection was designed for the consumer who is interested in leading a healthy and active lifestyle. We are favorable on the way that Wildflower will be able to target a specific market segment and will monitor how these products gain traction through this relationship.
Secures Distribution from Saks Fifth Avenue in NYC
A few weeks ago, Wildflower Brands announced a new collaboration with luxury, beauty and wellness icon Joel Warren and his in-house salon at Saks Fifth Avenue’s newly renovated flagship location in New York City. This initiative will create significant awareness for Wildflower’s line of CBD infused products and we are excited about this opportunity for the company.
The Salon Project selected Wildflower’s CBD infused products for its new health and wellness-focused initiative, which launched last month in Midtown Manhattan. The Salon Project at Saks Fifth Avenue features a full salon and lounge space, a VIP treatment room and a curated “shop-in-shop” CBD beauty corner. The Salon Project is the brainchild of celebrity colorist Joel Warren who is focused on creating a signature experience that brings together expert stylists, curated products, and state-of-the-art technology.
Wildflower Brands has done a fantastic job when it comes to selecting strong strategic partners and this relationship is the perfect example of this. When looking at the type of consumers that visit Saks, we believe that this is a market that companies want to be levered to. The Salon Project and Saks Fifth Avenue lend brand affinity that will strengthen Wildflower’s brand equity and market position while identifying the company as a credible North American brand for early adopters of CBD-infused products in other countries where the industry is just getting started. We find this to be significant and will monitor how this drives value to Wildflower Brands.
Focused on the Global CBD market
When it comes to the CBD market, Wildflower has been focused on the global opportunity and we find this to be significant. The company has been targeting the European Union with its CBD products and we have been favorable on this market. With a population of 600+ million, Europe is almost twice the size of the United States and the cannabis industry there is much less saturated. Currently, the average price for cannabis is much higher in Europe and this has benefited the companies that are levered to this market.
In late March, Wildflower signed an agreement with Two Towers to expand the Wildflower Wellness brand’s CBD+ line of products into Poland. Two Towers is a major wholesale prescription medical and over the counter wellness distribution company in Poland which is an extension of Omega Rex, a group of 14 pharmacies around the central capital region of Warsaw.
Poland represents a great starting point for Wildflower and it has received tariff codes for the importation of its products into this market. We have seen several companies enter the European market through Poland and expand into new markets from there. We expect to see Wildflower capitalize on the CBD opportunity in Poland prior to expanding into new markets and are bullish on this opportunity.
The European CBD market is already a multi-billion-dollar market and is in the early innings of a major growth cycle. The Brightfield Group recently announced market intelligence stating that the European CBD market will boom with 400% growth through 2023. We are favorable on Wildflower Brands’ leverage to this market and will monitor how the team executes on this.
A Leading CBD Opportunity that is Flying under the Radar
According to the Brightfield Group, the hemp-derived CBD market is expected to reach $22 billion by 2022 and this represents a massive opportunity for Wildflower Brands. During the last year, the company has done a fantastic job at expanding its reach and positioning itself as a leading premium CBD brand.
Last month, Wildflower was honored to have a variety of its CBD+ wellness products featured at Kim Kardashian’s baby shower which was curated by HelloMD to create an experiential CBD wellness event. Wildflower has been working to have its CBD brand become synonymous with leading premium brands and we find this to be significant. Through events like Kim Kardashian’s baby shower and relationships like the one with Saks, Wildflower has done a great job at positioning itself as a premium CBD brand and we are favorable on this.
Over the next year, we expect to see the company report massive growth as it continues to execute on the North American cannabis market. From Vancouver to California, from Poland to New York, Wildflower Brands is a company that has massive potential for growth and has been flying under the radar.
When compared to companies of a similar size and structure, Wildflower Brands is trading at a significant discount and this is something to be aware of. As the company continues to execute, we expect this valuation disparity to change and this is an opportunity that we continue to monitor.
To learn more about Wildflower Brands, please reach out to firstname.lastname@example.org.
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