Consumers will spend an estimated $58.51 billion on their pets in 2014, according to the American Pet Products Association’s National Pet Owners Survey, which is up 5% from the $55.72 billion spent last year. Even with the global economic crisis of 2008, the industry has managed to grow every year since 2001, as consumers are willing to spend on their pets even when they can’t afford to spend on themselves.
Cannabis Therapy Corp. (OTCQB: CTCO), a development stage company that aims to become a leader in the research, development, and commercialization of safe, all-natural, ultra-low THC, cannabinoid-based medicines and supplements, recently announced plans to diversify into the multi-billion dollar pet industry through an exclusive worldwide licensing agreement with Canna-Pet LLC of Seattle, WA.
In this report, we’ll take a look at the potential therapeutic effects of cannabinoids, and the potential market opportunity within the multi-billion dollar pet industry.
Cannabinoids for Canines (and other furry friends too!)
Cannabidiol – often referred to as CBD, has demonstrated a number of therapeutic benefits in animal and human research. By various mechanisms, CBD directly and indirectly modulates the endo cannabinoid system, via both CB1 receptors found throughout the central nervous system and CB2 receptors found in the immune system.
Researchers have found that cannabinoids may be effective in easing symptoms and reversing a wide range of conditions, including rheumatoid arthritis, diabetes, epilepsy, antibiotic-resistant infections, neurological disorders, and muscular dystrophy. Moreover, the cannabinoids don’t appear to have any major side effects and may even be effective as an anti-psychotic when given in larger doses.
Since cannabinoids from hemp are non-psychoactive, these can be legally sold over-the-counter in all 50 states. The wide range of potential applications in humans has prompted companies like GW Pharmaceuticals plc (NASDAQ: GWPH) to begin FDA approved clinical trials, but Cannabis Therapy Corporation is the first publicly traded cannabis company to enter the multi-billion dollar pet and animal industry.
Potential Market Opportunity
Consumers will spend an estimated $13.72 billion on supplies and over-the-counter medicines for their pet in 2014. Given the number of potential therapeutic applications for hemp-based pet products, a large portion of the market segment could potentially be addressed with the Canna-Pet™ product line, which may compete with companies like Zoetis Inc. (NYSE: ZTS) or Kindred Biosciences Inc. (NASDAQ: KIN).
Perhaps the closest proxy would be glucosamine supplements, which are designed to ease joint pain caused by arthritis. Many veterinarians and pet owners purchase these supplements to help ease pain for older pets. In an August 2000 issue of the Journal of the Proceedings of the National Academy of Sciences, investigators found that cannabinoids suppressed the progression of arthritis in vivo and in animals.
The ability of cannabinoids to suppress arthritis is just one of many potentially beneficial effects, meaning that hemp-based pet supplements could provide the solution to many problems in a single, easy-to-buy pill. Capturing just a fraction of the market for pet supplies and over-the-counter medicines could equate to a multi-billion dollar market opportunity in a space with relatively few competitors.
The Canna-Pet™ Deal
Cannabis Therapy’s move into the pet and animal health sector via its exclusive licensing agreement with Canna-Pet, LLC accelerates its already aggressive strategy of bringing hemp-based products to market. While management works towards finalizing its human hemp-based supplements, the licensing agreement positions Cannabis Therapy Corp to begin generating immediate revenue.
Developed in collaboration between Doctors of Veterinary Medicine in six states and an MIT entrepreneur, Canna-Pet™ is the culmination of 20 years of research and development in cannabinoid therapies for animals. The company produces the only veterinarian recommended, legal, over-the-counter CBD products for animals, made from industrial hemp and manufactured in the U.S.
Currently, Canna-Pet™ offers capsules available in four different dosages plus Canna-Biscuits™ treats. The products contain not only CBD, but other cannabinoids and terpenes (essential oils) that make them uniquely effective. Following the agreement, Canna-Pet™ products are now available under exclusive worldwide license with Cannabis Therapy, which will provide CTCO investors with unique exposure to this growing industry.
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