The U.S. medical cannabis market is expected to grow from $1.7 billion in 2011 to $9 billion by 2016, according to a 2011 report from See Change Strategy, while recreational legalization in Colorado and Washington could accelerate that growth. Investors have a number of different ways to gain exposure to the industry, and they may be wise to seek out the most diversified opportunities to mitigate risk in such a new business climate.
Intelligent Living Inc. (OTC: ILIV) is focused on two distinct areas of the cannabis industry, including CBD-based consumer products and business-to-business (“B2B”) solutions for the cannabis industry. With its dual focus on consumers and corporations, the company is uniquely positioned to capitalize on both ends of the cannabis industry and ultimately mitigate some risk for investors.
CBD-based Pain Relief Products
Cannabis was a common ingredient in medications until 1937 when the Marijuana Tax Act, despite objections from the American Medical Association, outlawed the plant. Cannabinoids are similar to opioids in that they inhibit pain by interacting with specific receptors within pain pathways and studies have shown that they can be effective for topical and possibly muscle problems.
Intelligent Living Inc.’s Health and Beyond nutraceutical division has developed and began selling a cannabinoid-based pain relief topical spray called Serene. Leveraging cannabinoids like cannabidiol (“CBD”) and cannabinol (“CBN”), the pain relief topical spray is non-psychoactive but has pharmacological efficacy. Patients can simply rub the solution into the affected area and get instant drug-free relief.
Serene and other cannabis-based products for pain applications will be made available for sale on Health and Beyond’s www.drlarrydirect.com in June 2014 alongside many other products already available for sale. The website is operated by Dr. Larry, a naturopathic physician with over 35 years of experience, who built his own product line based on his long experience with treating patients.
The growing interest in cannabinoid-based pain relief products is highlighted by companies like Tauriga Sciences Inc. (OTC: TAUG), a diversified life sciences company, that have made recent acquisitions in the space. In March, the company announced the acquisition of Honeywood LLC, which has been focused on developing cannabis-based healing products since 2010.
Other companies, like Nuvilex Inc.‘s (OTC: NVLX) Medical Marijuana Sciences Inc. subsidiary, are actively developing cannabinoid-based cancer treatments. In particular, the company is exploring how its Cell-in-a-Box® technology can optimize the anti-cancer effectiveness of cannabinoids. These efforts demonstrate the therapeutic breadth of CBD-based treatments across the spectrum.
In the end, cannabinoid-based pain relief represents a growing part of an industry that’s expected to reach $35.1 billion in size by 2017, according to GBI Research. Sanofi’s (NYSE: SNY) Aspercreme, Icy Hot and other pain relief options may be popular now, but the growing prominence of CBD-based pain therapeutics may change those dynamics in the near future.
B2B Cannabis Industry Solutions
The legalization of cannabis has created a multi-billion dollar industry overnight in North America. The rapid rise, newness, and uncertain regulatory nature of the industry have left a gap for professional services that are only now starting to be provisioned.
For example, companies like MediSwipe Inc. (OTC: MWIP) and Medical Cannabis Payment Solutions Inc. (OTC: REFG) recently began offering payment-processing services to the growing industry. The payment-processing problem has drawn a lot of industry attention since many cannabis companies have limited access to the banking sector and want to ensure complete financial compliance.
Intelligent Living Inc.’s Social420 division is dedicated to closing the gap for professional services by connecting companies within the industry. While www.social420.com is still in a beta stage, the website will become a portal for lawyers, doctors, and business professionals that want to discuss and network within the growing commercial cannabis industry.
In particular, Social420 aims to become a sort of LinkedIn (NASDAQ: LNKD) for the cannabis industry, with access to people, jobs, news, updates, and insights that are safe and secure in a private cloud. The company has also integrated PuffPassPay and other features that service the highly specialized area well, while management plans to roll out additional features over the coming quarters.
On April 28, 2014, the company also announced the creation of its Provectus division to focus on full-service managed IT and private cloud services targeting the emerging cannabis industry. The new division was bolstered by the $2.2 million acquisition of Venturian Group and Perfect Solutions, which will provide it with over 200 clients and average annual contract sizes of $10,000 per client.
Potential Investment Opportunity
Intelligent Living Inc. has its hands in both the consumer and corporate aspects of the burgeoning cannabis industry. Since it avoids any illegal or uncertain parts of the industry, the company provides investors with a relatively safe and diversified bet on the industry’s growth through its infrastructure and select consumer products that do not require any regulatory approvals.
Health and Beyond’s unique CBD-based pain relief sprays and other nutraceutical products are based in emerging science and provide investors with exposure to a unique industry niche. Social420 and Provectus cover the corporate infrastructure side of the equation with the latter providing an existing revenue stream for the company.
Investors may want to take a closer look given these developments at the modest stock that trades with a market capitalization of just $3.6 million. With diversified potential across many aspects of the multi-billion dollar cannabis industry, the company could see upside if it is successful in commercializing its products.
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