Kanabo, Chill Brands and Cellular Goods: 3 cannabis stocks to buy

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Highlights

  • The UK-based cannabis industry could witness a new set of regulations and changes in the existing laws by the authorities.
  • As per the report, the total dose of THC and other phytocannabinoids in a single serving needs to be controlled and should not exceed 50 micrograms.

The UK-based cannabis industry could witness a new set of regulations and changes in existing laws by the authorities. As per the recently published report by the Advisory Council on the Misuse of Drugs (ACMD), many consumer CBD products sold in the country exceeds the level of phytocannabinoids present in the products, including chocolates, gummies and other were found to contain high levels of THC, which causes negative side effects and makes user “high”.

As per the report, the total dose of THC and other phytocannabinoids in a single serving needs to be monitored and should not exceed 50 micrograms. Also, the regulatory authority like Food Standards Agency (FSA) should ensure all CBD products are compliant with the acceptable levels. Regulatory authority is currently going through the recommendations suggested by ACMD and might consider adopting some of the changes in 2022.

The cannabis sector is a sunrise industry that reported a significant growth in the last few years. Many innovative CBD products like oils and edibles are being introduced, which are now easily accessible through chemist shops. The introduction of new regulations could adversely impact the companies operating in the segment. However, given the huge market size and rising consumer demand will assist in industry growth.

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Let us look at FTSE listed stocks that could be impacted if new regulations are introduced:

Kanabo Group Plc (LON: KNB)

The company operates in the medical cannabis industry engaged in the development of non-THC products for consumers and other cannabis products to treat patients. The company’s wholly-owned subsidiary Materia Malta Operating Ltd. has announced that its first medical cannabis product witnessed huge demand from consumers.

The entire first volume production was sold out in two weeks. As a result, the company’s sales grew by 48% in the fourth quarter. The introduction of new regulations might have minimal impact as the company also distributes non-THC products in Europe.

Kanabo Group Plc’s last close was at GBX 12.10 on 31 January 2022, with a market cap of £44.77 million.

Chill Brands Group Plc (LON: CHILL)

The international company is engaged in the production and distribution of CBD products and tobacco alternatives through retail outlets and an online website.

It primarily operates in the US market. The company witnessed significant improvement in business performance, reporting an 18x rise in revenue to £1,073,872 in the six months to 30 September 2021, indicating increased demand for the company’s CBD products.

Chill Brands Group Plc’s last close was at GBX 8.75 on 31 January 2022, with a market cap of £18.56 million.

Cellular Goods Plc (LON: CBX)

The company operates in the niche segment of biosynthetic cannabinoids consumer products. In December 2021, the company announced the appointment of new CEO, Anna Chokina, to drive the company’s future growth strategy.

It recently launched inaugural products like the CBG skincare range for consumers through its e-commerce platform.

Cellular Goods Plc’s last close was at GBX 6.50 on 31 January 2022, with a market cap of £30.79 million.



 

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