CBD: Pot’s Hot Cousin

Written by Jason Simpkins
Posted December 14, 2017 at 7:00PM

What do you to think about when you hear the term “medical marijuana”?

Do you think about a cancer patient puffing a J?

Do you think about someone eating a THC-laced gummy bear to treat their inflammatory bowel disease?

Do you think about an arthritis patient rubbing oil on their hands?

Maybe you don’t think of any of these things. And if that’s the case, that’s a problem.

No doubt, as Adam English pointed out on Tuesday, there’s often a lack of clarity when discussing medical marijuana.

Many people have been dazzled by the taboo nature of the drug and its massive fortune-making potential.

And that’s certainly understandable.

But going forward, investors would do well to treat the subject with a little bit more nuance.

That’s why, today, I want to talk about Cannabidiol, or CBD.

There’s a lot of confusion about CBD, mostly because it's found in both marijuana and hemp. It’s a cannabis compound (a cannabinoid) just like THC, the active ingredient in marijuana. Except CBD doesn’t make people feel high or stoned. In fact, it can actually counteract the psychoactivity of THC.

So the two are related, but different. And they come from different places.

Most medical marijuana products are made from plants that have high concentrations of THC, but low quantities of CBD. Hemp is the opposite. It has a lot of CBD but little THC.

Still, it possesses many of the same qualities as its cousin.

Like THC-based marijuana products, CBD oil can be used to treat pain, inflammation, anxiety, psychosis, seizures, spasms, and other conditions. But it does so without the high.

That might sound like a less-fun form of treatment, but it’s truly a blessing for those who prize sobriety. It’s also safer, and eschews negative side effects like lethargy and dysphoria.

Also, unlike marijuana, CBD oil derived from hemp is legal in all 50 states.

Unfortunately, growing hemp for commercial purposes is, for the most part, illegal. The sole exception is that the federal government has allowed state universities and agriculture departments to start pilot programs to grow, research, and develop industrial hemp.

That’s allowed states like Kentucky, West Virginia, and Minnesota to grow their own hemp crops and put them to use.

Kentucky has been especially aggressive, as cannabis plants are now grown on nearly 13,000 acres of land across the state.

kentucky hemp map"Hemp is part of our heritage and part of our state history," said Doris Hamilton, who manages the Kentucky program. "Everything takes time and it takes education of the public, but now we get calls from nearly every state in the country because we are more advanced than they are. We're one of the leaders in the nation.”

Indeed, as with marijuana laws, not every state has taken hemp up.

But the ones that have are being rewarded. Kentucky aims to create thousands of jobs and millions of dollars in revenue through its program. And it’ll likely succeed thanks to new and growing demand for CBD oil.

Indeed, most medical marijuana companies also produce CBD oil. And their businesses have taken off with greater awareness.

Industry expert and Investment Director of The Marijuana Manifesto Jimmy Mengel has recommended several of these companies through his service.

Two such stocks are up more than 200% since Jimmy recommended them. And a third, his most recent recommendation, will likely be the next “triple-bagger.”

You can find out more about that here.

As I said, the marijuana industry is new and fast-growing. There’s a lot of nuance novice investors aren’t necessarily prepared for.

It helps to have a certified expert like Jimmy to guide you through it.

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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