Monthly Archives: May 2020

In 2017, when celebrity host (The View) Whoopi Goldberg was enjoying the high point of her then-new CBD brand, Maya & Whoopi, a reporter asked what the next step was. “World domination,” Goldberg joked at the time.

She might have been onto something.

Goldberg this year parted ways with her business partner, Maya Elisabeth; the result was that their company folded. But if Goldberg back in 2017 was predicting a big future for CBD startups, she wasn’t off the mark, judging from a the findings of a new survey from New Frontier Data.

“The newness of the CBD experience for most consumers suggests there remains significant opportunity for well-developed brands to attract consumer attention and capture market share from existing market leaders,” the report says. A big reason why startups might have an edge, the researchers imply? The novelty factor.

“Consumers have not been using the products with sufficient longevity to create durable brand loyalty that is difficult to dislodge,” the report says.

To compile the study, New Frontier Data surveyed 4,074 U.S. adults in mid-March. The survey population consisted of 26% of subjects who earned less than $30,000; 27% earning $39,000 to $59,999; 27% earning $60,000 to $89,999; and 16% earning $90,000 and up.

Among the report’s chief takeaways:

Familiarity with CBD is an important factor

·     CBD is hardly unknown to the American mainstream. “Nearly 9 in 10 Americans are familiar with CBD,” the report says. Some 86% of those surveyed had heard of CBD, and a majority (55%) were interested in learning more. Younger cohorts tended to be more interested than older groups.

·     Word of mouth is a common thread: Nearly 3 in 4 (73%) of those surveyed who’d heard of CBD reported having had a conversation about it, including the 67% who had not consumed it. People reported that their conversations were largely positive.

·     Positive associations: 51% of those surveyed knew a friend or family member who’d used CBD, and nearly 1 in 5 (17%) had recommended CBD to someone else.

·     Frequency: Among Americans who reported ever having consumed CBD, 40% said they did so at least once a week, with older consumers using it more frequently than younger ones.

·     CBD consumers seem to be evangelists. A majority, 56%, said they had recommended CBD products to someone else.

Stress and pain are major reasons for use

·     Three in five (60%) of consumers surveyed reported using CBD in a context that might be called “unwinding,” such as relaxation, relief of stress or anxiety reduction. The primary use, however (41%), was pain management.

Means of  Consumption

·     Oils and tinctures led the way, at 38% (of the ways in which consumers surveyed consume CBDs). Topicals were the next most widely used method, at 19%; then: food or drinks, 18%; flower, 8%; pills/capsules, 7%; and vaping, 7%.

·     Some 43% of consumers said they used less than 30 mg. a day; 22% reported using 50 mg. or more; and 12% used 100 mg. or more a day.

·     Some 65% of consumers surveyed said CBD had positively affected their quality of life. Only 2% described a negative effect.

Level of expenditure

·     Most consumers (59%) said they spent less than $50 a month on CBD.

Gender Differences

·     Some 46% of male consumers surveyed said they used CBD at least once a week, versus 36% of women in the survey population.

·     On average, men spent more for CBD than did women. Men were more likely (21%) than women (12%) to spend more than $100 per month. Purchasers ages 35 to 54 were the most likely (21%) of any group to spend more than $100 per month.

Decision Factors

·     CBD purchasers reported being generally happy with the products they were able to purchase, depending on the regulations in their geographic area; 71% agreed they were satisfied with their purchases.

·     When selecting which CBD product to purchase, price and quantity of CBD were the most important factors to those surveyed. Convenience of location and service from staff were also important criteria.

·     Some 51% of purchasers said they usually purchased familiar brands. About 29% said they would be likely to purchase CBD in the next six months.

Where the Opportunities Lie

For CBD startups, the women’s market for might be one smart place to focus, considering that male survey respondents were far more likely (21%) than women (12%) to spend more than $100 per month.

Another wise move might be to market only products backed by clinical studies and clear, authoritative information. The reasons here would be the importance consumers put on reliable information, as well as the strict FDA restrictions against promoting CBD for medical purposes.

Infusions as a method for consumption also seem to be of growing interest, while smoking is losing users due to social norms, especially during the current COVID-19 crisis when so many cannabis medical users are housebound.

Finally, given the anxiety during the crisis and the prevalence of word of mouth in spreading information about CBDs, companies might want to turn to such marketing channels as referral discounts, loyalty programs and high-production-value consumer testimonials, according to the New Frontier Data report.

A team led by researchers at Baylor College of Medicine in collaboration with Medterra CBD conducted the first scientific studies to assess the potential therapeutic effects of cannabidiol (CBD) for arthritic pain in dogs, and the results could lead the way to studying its effect in humans. Researchers focused first on these animals because their condition closely mimics the characteristics of human arthritis, the leading cause of pain and disability in the U.S. for which there is no effective treatment.

Published in the journal Pain, the study first showed both in laboratory tests and mouse models that CBD, a non-addictive product derived from hemp (cannabis), can significantly reduce the production of inflammatory molecules and immune cells associated with arthritis. Subsequently, the study showed that in dogs diagnosed with the condition, CBD treatment significantly improved quality of life as documented by both owner and veterinarian assessments. This work supports future scientific evaluation of CBD for human arthritis.

“CBD is rapidly increasing in popularity due to its anecdotal health benefits for a variety of conditions, from reducing anxiety to helping with movement disorders,” said corresponding author Dr. Matthew Halpert, research faculty in the Department of Pathology and Immunology at Baylor. “In 2019, Medterra CBD approached Baylor to conduct independent scientific studies to determine the biological capabilities of several of its products.”

In the current study, Halpert and his colleagues first measured the effect of CBD on immune responses associated with arthritis, both in human and murine cells grown in the lab and in mouse models. Using Medterra tinctures, they found that CBD treatment resulted in reduced production of both inflammatory molecules and immune cells linked to arthritis.

The researchers also determined that the effect was quicker and more effective when CBD was delivered encapsulated in liposomes than when it was administered ‘naked.’ Liposomes are artificially formed tiny spherical sacs that are used to deliver drugs and other substances into tissues at higher rates of absorption.

Halpert and colleagues next assessed the effect of naked and liposome-encapsulated CBD on the quality of life of dogs diagnosed with arthritis.

“We studied dogs because experimental evidence shows that spontaneous models of arthritis, particularly in domesticated canine models, are more appropriate for assessing human arthritis pain treatments than other animal models. The biological characteristics of arthritis in dogs closely resemble those of the human condition,” Halpert said.

Arthritis is a common condition in dogs. According to the American Kennel Club, it affects one out of five dogs in the United States.

The 20 client-owned dogs enrolled in the study were seen at Sunset Animal Hospital in Houston. The dog owners were randomly provided with identical unidentified medication bottles that contained CBD, liposomal CBD, or a placebo. Neither the owners nor the veterinarian knew which treatment each dog received.

After four weeks of daily treatment, owners and veterinarians reported on the condition of the dogs, whether they observed changes in the animals’ level of pain, such as changes related to running or gait. The dogs’ cell blood count and blood indicators of liver and kidney function also were evaluated before and after the four weeks of treatment.

“We found encouraging results,” Halpert said. “Nine of the 10 dogs on CBD showed benefits, which remained for two weeks after the treatment stopped. We did not detect alterations in the blood markers we measured, suggesting that, under the conditions of our study, the treatment seems to be safe.”

Austin Soldner and Michael Schaecher, the co-founders of the new sunglasses brand Futuremood, met at the newly formed San Francisco research and development lab created by the high-end audio tech developer Bose.

The two were tasked with working on Bose’s sunglasses wearable and bonded over a shared interest in sneakers and fashion. Over many conversations the two men realized there was an opportunity to use technology to rewrite the sunglasses playbook and launch the first new brand to the market since Oakley came on the scene.

There was also an opportunity to bring the materials science and tech-forward strategies that sneaker companies have developed to an industry that hadn’t seen any real technical revolutions in decades.

Enter Futuremood “Auras,” which the company bills as the first glasses scientifically tested and proven to alter your mood.

Using technology developed by the lens manufacturer Zeiss, Futuremood’s first glasses come in four colors — a relaxing green, a refreshing blue, an energizing red and a focusing yellow. The company is launching its eyewear in two styles, a boxy, chunky frame and a more traditional rounded frame.

Any mood-altering effects are thanks to Zeiss’ halochrome lens technology, which the lens manufacturer has been working with — and publishing papers on — to suss out the science behind its claims that the use of filtered light can change the way folks feel.

There’s some preliminary research that the company has done, but the science is still largely unproven (Zeiss conducted two studies at European universities). 

Schaecher and Soldner are believers, and the two longtime tech execs see these lenses as a window into a wider world of material science experimentation and product development that they’re hoping to bring to market with Futuremood.

“If you think about sneakers and where Nike and Adidas got to where they are today, it was through innovation in product design and materials and branding and marketing and all of that had been missing from the sunglasses space,” Schaecher said.

The second marketing hire at Airbnb and the first marketing hire at the now-defunct Munchery, Schaecher knows a thing or two about branding. Meanwhile, Soldner, the founder of Playground.fm, and a former product designer at Jawbone, is the technical expert and lead designer for all of Futuremood’s frames.

“We really saw an opportunity to push the envelope in technical innovation and product innovation,” said Schaecher. “We have a backlog of stuff to push the envelope of what sunglasses are.”

One thing sunglasses are is a very very big business. Consumers spent $14.5 billion on sunglasses in 2018, according to the market research firm, Grand View Research.

If Futuremood can capture even a fraction of that market with its unique spin on sunglasses, it’ll be in good shape.

As with any good direct to consumer product, Futuremood’s difference begins with its packaging. Tapping in to the mood-altering “wearable drugs” aesthetic, the company’s product is packaged in boxes with the same bright hues as the sunglasses. Inside there’s a cloth to clean the glasses, a velvet pouch to hold them and a scented pack of incense matches and a vaguely tarot-esque card with information about the glasses and the sensation they’re meant to evoke (there’s even a Spotify playlist to listen to).

In an email, Schaecher described the sensation as “not as subtle as CBD, but not as strong as a shot of tequila or glass of Rosé.

“Austin and I are really into different ways of self care and taking moments and… we thought there was an opportunity to bring delight and joy,” with the packaging, Schaecher said. “We don’t expect people to be firing up Spotify playlists and incense matches every time they wear things.”

Futuremood has been mostly bootstrapped to date, and like everything else in the year of our Lord 2020, the company’s plans were pushed back by the coronavirus pandemic.

“Our lenses are made in Zeiss’ Italian factory and the glasses were made outside of Shenzhen,” said Schaecher. “We quarantined the first order for two weeks. Zeiss was right in that region of Italy that was getting hit hard. We’ve been delaying since then. It’s hard to put into words what it’s like to grind on something for eighteen months… and then have to delay launching.”

Even with the pandemic, though, the company moved ahead with the design for its second product, and that gives a hint for where Schaecher and Soldner want to go with their business. “We have our second product line and that is not mood-altering glasses,” said Schaecher. “That’s a traditional sunglasses line that uses titanium alloy metals that are more commonly seen in aerospace than in eyewear.”

The design aesthetic is also more in the luxury vein, which Schaecher teased was akin to something that would be more at home in a Cartier showroom rather than a direct to consumer brand’s digital storefront.

Right now, the company is going direct to consumers through its website, but it’s looking at the potential for some retail collaborations and field marketing when the country opens back up for business.

As for the mood-altering effects and whether “wearable drug” can win market share, Schaecher is pretty optimistic. “People definitely have reactions,” he said. “It’s a fun, new thing that’s never existed before.”

Boing Boing welcomes Real Tested CBD as a sponsor!

Real Tested CBD is known for efforts in bringing information about the CBD products for not only established brands, but the budding brands in the niche. We fuel our passion through the zest of our clients, asking us for updates on what is happening in the CBD universe. Thanks to the laws in the US that allow legal production of CBD products for health and research, there are some premier products on the market, but it’s important to know what you are shopping for to ensure the best purchase.

We at Real Tested CBD run all the products through lab tests and present everything in black and white for our readers. This way, our consumers get to find out what product they are getting and if it is worth getting at all. Today, we review Charlotte’s Web and its CBD products that include balms, creams, tincture, edibles, and capsules.
Here is a review of all the nine products of Charlotte’s Web that we tested.

This hemp-infused balm by Charlotte’s web comes with 150 mg of botanical blend hemp extract. It has a soothing scent, and we found no traces of pesticides and solvents in the mix. Moreover, it contains all the goodness of CBD at 107.2 mg per pack. It also contains THC at 4.69 mg and CBC at 4.48 mg per package. However, our test results indicate that the total CBD levels were lower than those claimed on the label.

This Canine hemp-infused balm is for adult dogs with 450 mg of hemp extract. However, our test results show the CBD levels are half the quantity of what the label claims. It does contain a decent CBD quantity still along with other beneficial cannabinoids. The CBC and THC levels are at 8.67 mg and 5.53 mg per package; whereas, CBD levels are at 224.28 mg per package with no sign of pesticides or solvents.

This hemp-infused skin cream comes with 750 mg of hemp extract. It does contain some CBD goodness, but our test results indicate these levels to be lower than the label’s claims. It has 19.1 mg of CBC and 14.63 mg of THC, which can be very useful to relax. Plus, there is 328.74 of CBD packed in this product.

Wow, this CBD isolate tincture by Charlotte’s web is one of our favorites. It delivers 20 mg of CBD per drop, and our test results indicate that this tincture contains more CBD than the label claims, which is a good thing as it increases the effectiveness of this product. The CBD levels are a whopping 782.81 mg per package. However, there are no traces of any other cannabinoids in the tincture, and there are no solvents or pesticides.

This Web Hemp extract tincture is an excellent CBD product that is true to its label claims. We would say a great job! It offers 12 mg of pure CBD extract that offers other beneficial cannabinoids present in all-natural hemp extract used in this product. It contains THC, CBC, and CBG at 17.87 mg, 17.65 mg, and 3.11 mg per package, respectively. The total quantity of CBD per package is 533.8 mg, with no trace of pesticides or solvents.

These Raspberry flavored Hemp Extract-Infused Gummies are the first edible product on our list from Charlotte’s Web. Our lab tests found an acceptable range of CBD per canister at below 25%. However, it appears to be full-spectrum CBD and contains CBC and THC in the mix, which makes it spot on with its whole hemp extract claim. The CBD, THC, and CBC quantities are at 449.14 mg, 15.51 mg, and 38.77 mg per package.

Over the course of nearly a week, Aurora Cannabis (ACB) has surged more than 200% from the reverse split lows near $5 before the strong FQ3 report. My investment thesis was very bullish after the transformational quarter and positive prospects for reaching EBITDA positive in the September quarter, but the stock rally to more than $17 on a small U.S. CBD acquisition is too far, too fast.

Image Source: Reliva website

U.S. CBD Deal

After the close on Wednesday, Aurora Cannabis announced a deal to enter the U.S. CBD market with the purchase of Reliva for $40 million in stock with an additional earn-out potential of another $45 million in cash or stock. The deal is adjusted EBITDA accretive basically because the company is EBITDA positive and Aurora Cannabis is still generating large EBITDA losses.

Reliva apparently has a revenue base of $14 million, making the deal relatively small in comparison to Aurora Cannabis, which is on a path toward revenues of $300 million in FY21 ending in June. As well, the deal pulls Aurora Cannabis into the U.S. market with the added complexities of operating a recreational cannabis business in Canada and international medical cannabis in multiple international countries on top of this new venture.

The deal also immerses Aurora Cannabis into a highly competitive U.S. CBD market where market leader Charlotte’s Web Holdings (OTCQX:CWBHF) has struggled. The company saw Q1 revenues decline 1% to $21.5 million due to the FDA restrictions.

Reliva has access to 20,000 retail locations in the U.S. and is ranked as the No. 1 CBD player in topicals. Unfortunately, the product category dominated by this company isn’t the one suppressed by the FDA rules which limits the sale of hemp-infused CBD in dietary supplements causing the weakness at CWH.

In addition, buying Reliva doesn’t allow Aurora Cannabis to enter the medical or recreational cannabis market. The federal government still has to approve cannabis for a company listed on the major stock exchanges to enter those markets and the company will have to buy their way into inflated stock valuations in the future.

Quickly Overvalued

Aurora Cannabis is making a wise move to swoop into the U.S. market with a small initial purchase in a land and expand move. The company doesn’t have a lot of money at risk here by entering a highly-competitive market with taking out a potential competitor when entering the market with their own brand.

Unfortunately for investors, the stock has soared off the $5.30 lows prior to the FQ3 earnings report. Aurora Cannabis is now up to $17.40. With 109 million shares heading into the this deal and ~112 million after the stock deal, Aurora Cannabis now suddenly has a market cap of $1.95 billion.

Aurora Cannabis still has a ton of cost cuts to implement while maintaining some moderate revenue growth in order to reach EBITDA positive in Q1’21. The company is still targeting reducing operating expenses to the C$45 million range while analysts have revenues growing sequentially in the next few quarters. Achieving this goal isn’t a guarantee as the company cuts operating expenses by 50% over the course of a few months. Most companies run into unexpected hiccups when eliminating employees.

The Canadian cannabis stocks are generally more expensive than the U.S. multi-state operators. Both Aurora Cannabis and Canopy Growth (CGC) trade around an EV/S multiple of 6x while the U.S. MSOs of Curaleaf (OTCPK:CURLF) and Trulieve Cannabis (OTCQX:TCNNF) trade at half the multiples at below 3x.

Data by YCharts

Aurora Cannabis is still working toward an aggressive goal of cutting a C$50.9 million EBITDA loss from the March quarter into positive EBITDA in the September quarter. Curaleaf just printed a March quarter with a $20.0 million EBITDA profit while Trulieve Cannabis generated an impressive $49.4 million EBITDA profit.

The drastic differences in the profit pictures favor the MSOs after the rally in Aurora Cannabis. The Canadian cannabis company is improving, but the market has become too bullish on the turnaround and the move into the competitive U.S. CBD sector.

Takeaway

The key investor takeaway is that Aurora Cannabis is making smarter corporate moves in 2020, but the stock tripling off the bottom begs for a pullback. The stock is expensive relative to other cannabis stocks over $17 here.

Investors wanting to play the turnaround in Aurora Cannabis should wait for a dip back to $10 where better value will emerge and the risks reflect the difficulty of the Canadian cannabis company achieving EBITDA positive numbers.

Looking for a portfolio of ideas like this one? Members of DIY Value Investing get exclusive access to our model portfolios plus so much more. Signup today to see the stocks bought by my Out Fox model during this market crash. 

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

Already down when the coronavirus pandemic kicked all markets, a few cannabis stocks enjoyed rallies Friday — gains connected, it would seem, to the coronavirus pandemic.

Colorado’s CBD giant Charlotte’s Web, named for pediatric cannabis patient Charlotte Figi, who died last month of complications from the coronavirus, was up 24 percent on the Toronto Stock Exchange. But the big gain was on NASDAQ, where shares in Canadian firm Sundial spiked 50 percent—a jump, to $0.83 a share, that’s nothing close to wiping out last year’s losses, but nonetheless a very big rally in context.

And a rally “vaguely” timed, as MarketWatch reporter Max Cherney observed, with the New York Post’s publication Thursday of its take on the big story that had gone viral on Facebook earlier that month, and was later flagged as fake news: the claim, first made in a preclinical paper published in April, by Canadian scientists that certain high CBD strains of “cannabis could prevent and treat coronavirus.”

Cannabis and COVID together strikes a nerve, already: since the beginning of the pandemic, unscrupulous cannabis companies have been claiming, without any data, that their products might manage COVID symptoms or even act as a preventative. But this wasn’t that, as researchers at the University of Lethbridge explained in interviews with the Calgary Herald and CTV, recycled by the Post.

In experiments with 3D human cell cultures mimicking various diseases, certain high CBD cannabis strains—developed by the researchers labs, in no relation to the cannabis available in legal and recreational markets in Canada or the US—demonstrated abilities to shut down coronavirus’s favorite “pathway: a receptor called ACE2.

Rife in lung cells but also present in the mouth and gut, ACE2 regulates the virus’s ability to enter cells and replicate. One of the Lethbridge CBD strains downregulated the ACE2 receptor in certain 3D cells by as much as 73 percent, according to Lethbridge biological scientist and study lead author Igor Kovalchuk. This is a reason why the ACE2 receptor, and turning it off, is the target of pharmaceutical interventions like experimental novel coronavirus vaccines—and this is why a consumer product that contains one of the Lethbridge-grown cannabis strains might be a useful supplemental therapy for COVID-19 patients. Perhaps in a mouthwash, the preclinical paper suggested.

None of this means cannabis is a COVID-19 cure, or a COVID-19 prevention—just, maybe, a COVID-19 treatment. That didn’t stop certain media outlets, including one weed publication called out by name by The Poynter Institute’s Politifact in a May 18 item, from running items “overstating” the Lethbridge scientists’ findings, as Kovalcuk himself admitted. But the Post got it right.

“It reduces the possibility to get infected. I never said it would prevent or block it entirely,” he said in a telephone interview over the weekend.

“It is a possible treatment,” he added. ‘A treatment is not a cure. When [news reports] say it treats COVID, or can potentially treat COVID, they are absolutely right.”

For Kovalchuk’s research team, the coronavirus pandemic struck at an auspicious time. Kovalchuk runs a company called Pathway Rx. Pathway is a Sundial subsidiary—a fact not mentioned in the Post—and earlier this year, after the company’s fortunes had plummeted from summertime trading of $12 a share to this winter’s sub-$1 nadir, his team’s research was close to getting shut down for lack of money.

When COVID appeared, “I thought, well, it’s a virus, it’s inflammation, there must be something cannabis does,” Kovalchuk recalled. So his team dived back into the models. And since COVID-19 attacks the ACE2 receptor, a receptor his strains seem to block, “the rest is history.”

As for the temporary market gains, “I don’t really care,” Kovalchuk insisted. “I want this to be brought to people. And that can only be done once a clinical trial is done.”

The trick now is to convince an investor—be it a cannabis company or anyone else—to pay for study that involves humans. This will require even more money.

For around $700,000 US, Kovalchuk believes he could enroll several hundred human volunteers — COVID-19 patients willing to supplement their doctor-prescribed regimen with a Pathway Rx cannabis product, to see if their recoveries were quicker or their symptoms less severe than a control group’s. If hospitalization stays, length of illness, and other indicators among the experimental group dropped by 20 percent compared to control, more study and a larger cohort would be required. If it were 50 percent—then maybe we’d have an accepted additional therapy.

For now, the main takeaway is that “cannabis,” meaning the stash in your jar, or the stash available at the dispensary, or the CBD oil flogged online, isn’t going to do anything. Pressed for details about terpene notes or full cannabinoind spectrum information about his special strains, Kovalchuk stayed mum. But he did emphasize that it’s very likely the full spectrum of terpenes and cannabinoids, not just the high-CBD/low-THC ratio, that’s finding success inhibiting the ACE2 receptor favored by the coronavirus.

“It’s very important that it’s not just generic CBD,” he added. “You just can’t go anywhere and get CBD [that will work on COVID-19]. That’s why we’re afraid of people just rushing out to start buying it.”

Which, apparently, people have done—and not just CBD, but CBD stocks, too.

On May 20, Charlotte’s Web, the Colorado-based CBD giant and arguably one of the biggest names in legal cannabis, announced that the company was awarded its second federal patent on a cannabis plant.

Unlike the company’s 2018 plant patent on a Farm Bill-compliant high-CBD hemp cultivar—which was the first hemp strain to receive federal intellectual property protection—US Patent No. 10,653,085 is a utility patent.

This means, after satisfying a more rigorous process, including dropping off thousands of seeds at an official United States depository, Charlotte’s Web now claims as its intellectual property both the cultivar of hemp the company calls CW1AS1 as well as “methods” of plant production and cannabinoid extraction.

Okay! But so what? Why patent a hemp strain—why patent two? What does it all mean? Does Charlotte’s Web now have legal claim to the entire CBD game?

To the last question, no. And as for what this means, for normal people and cannabis consumers, very little. For patent attorneys or competitors of Charlotte’s Web in the CBD industry, it portends a little more, but just a little.

At least for now, cannabis patents like this one aren’t really intended to defend intellectual property in court—which is where a patent has its most practical value.

No, this patent is probably meant for the market. Patents like this exist mostly for companies to satisfy and woo investors, for whom a company’s ability to say “Look! I have a patent” might be the difference between signing a check, or not. And like all publicly traded cannabis companies, Charlotte’s Web has a lot of spooked and angry investors who need pleasing.

Patents “generate interest in the company, and are something investors would look at,” said Jonathan Hyman, a patent attorney and partner at the Los Angeles office of Knobbe Martens.

Whether Charlotte’s Web would enforce the patent, and how, “remains to be seen,” he added.

Company officials were not available to discuss the matter. In a statement provided by Sylvia Tawse, the company’s director of communications, CEO Deanie Elsner said Charlotte’ Web “will continue to pursue patent protection for unique and novel hemp genetics developed by our horticulture division.” Whether that meant there are any pretenders the company plans to sue, she did not say.

Though cannabis-related patent applications have been a thing since well before legalization and have tripled since 2015, as IP Watchdog noted, the mere phrase “cannabis patent” can still be triggering in cannabis circles. Patent talk can often lead to galaxy-brain thinking like the “Monsanto is supporting legalization in order to steal cannabis” or the “Philip Morris is buying up land in Humboldt County” conspiracy theories.

In the case of Charlotte’s Web, the company’s already locked up what’s probably its most valuable asset: its name. Charlotte’s Web is named for Charlotte Figi, the sufferer of childhood epilepsy who enjoyed relief from her symptoms after taking an extract of high-CBD cannabis grown by the Stanley brothers (and who died earlier this month after contracting COVID-19).

The world came to know Charlotte Figi and the Stanley brothers, seven photogenic Coloradans whose first names all begin with J, after they were prominently featured in a 2014 CNN special hosted by Sanjay Gupta. A very famous children’s book and a very famous and recognizable name, the company was sure lock down the name “Charlotte’s Web” with a trademark—one the company is currently defending in federal court, after a rival company dared market CBD products called Charlotte’s Web.

That’s what patents are for in terms of the law. But markets are another matter—and it’s worth observing that the company went public after securing its first patent.

Like almost all publicly traded companies in the cannabis sector, Charlotte’s Web is stuck in high-loss doldrums after hitting early peaks.

For the past week, shares in Charlotte’s Web have been trading in the $7 to $9 range in the Toronto Stock Exchange. That’s a big gain from the $4.24 seen at the company’s mid-March nadir, but still far below last summer’s high-water mark of $28.21, set in August.

Despite being sold in more than 11,000 stores, the company still lost $1.7 million in 2020—a hit smaller than other companies in the cannabis sector, but still in the red.

Patenting hemp genetics and the processes to achieve them won’t be enough to rescue the rest of the company’s lost value. But if Charlotte’s Web wants to be a global CBD brand, with product in supermarkets and convenience stores all over the globe—and why wouldn’t it?—this means something.

“Having this patent, that they can wave around and say, ‘Hey, we’ve got coverage on it, and it’s the best variety [of CBD rich hemp] that you’re going to get,’ ” said Andrew Merickel, who holds a Phd in neuroscience and is also an attorney and partner at the San Francisco office of Knobbe Martens. “That’s pretty valuable.”

How valuable? That’s all up to the logic of the market.