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CBD, What You Need to Know

Cannabidiol (CBD) has been heavily covered by the media. You may have seen it as an add-on booster to your post-workout smoothie. You may even have seen it as a supplement to your morning coffee. But what exactly is CBD? And why has it suddenly become so popular? In this piece, we unpack this mystery molecule and look at exactly why and how CBD is finding applications not just in therapeutic medicine but also in natural health and wellness.

 

What is CBD?

First, let’s understand what CBD is. CBD is a chemical compound (i.e. a cannabinoid) that occurs naturally in the cannabis plant. It has been touted for its various health benefits. CBD is the legal and non-psychoactive cousin of tetrahydrocannabinol (THC), another cannabinoid responsible for the psychotropic effects of cannabis, which are well-known. CBD and THC are respectively derived from the hemp and marijuana plants (although CBD can also be derived from the marijuana plant), both of which are part of the Cannabis Sativa family. Together, CBD and THC are two of at least 113 known cannabinoids today.[1]

Understanding the various forms of CBD

CBD comes in two forms: synthetic and extracted. Synthetic, or chemically-synthesised CBD, is an active pharmaceutical ingredient (API). It is generally produced in the form of an ultra-pure crystalline powder that is molecularly identical to naturally-occurring (i.e. plant-derived) CBD. Manufacturing of synthetic CBD often occurs in regulatory-approved facilities, where, much like with other APIs, there is a repeatability factor that allows for consistency in the batches produced.

Then, there is extracted CBD. There are two common types of extracted CBD. One is full-spectrum, which is whole-plant extract. The other is CBD isolate. When referring to CBD as full-spectrum, people usually have CBD oils in mind, because they generally contain other cannabinoids as well (and in some cases, terpenes). For this reason, one full-spectrum extract could be quite different to another full-spectrum extract; resulting from differences in the extraction process, part of the plant used, etc. CBD isolate, on the other hand, is always the same. CBD isolate is the purest form of naturally-occurring CBD, usually up to 99.9% pure.[2] CBD isolate generally comes in a solid, diamond-like form that needs to be crushed and ground into fine powder before it is consumed.

It is worth noting that clinical trials typically use CBD isolate. This is because they need with certainty to be able to tie any results back to the CBD, as opposed to other compounds. In some cases, synthetic CBD is also used.

How does CBD work?

Today, we have a good understanding of how CBD works. We know that CBD interacts with receptors, proteins and chemicals in the brain. These interactions create changes in the activity of neurotransmitters, hormones and other cells throughout our body. Through these interactions, CBD is able to affect certain bodily functions, from sleep-wake cycles, emotional regulation, inflammation, pain perception and even seizures.

 

Applications of CBD in medicine

It has not taken long for CBD to be available for anxiety, insomnia, skin conditions and other ailments including pain and inflammation. A study from the European Journal of Pain, for example, showed that CBD applied on the skin could actually help lower pain and inflammation resulting from arthritis.[3]

Researchers are also now looking at CBD’s ability to “cure” rather than merely “relieve”. In 2012, scientists at the University of Milan, for example, discovered that CBD displayed certain anti-cancerous properties.[4]

Around the same time, the Molecular Cancer Therapeutics Journal published a study showing effectiveness of CBD in the fight against breast cancer.[5]

Perhaps the strongest therapeutic evidence for CBD is in childhood epilepsy. Specifically, two rare forms known as Dravet syndrome and Lennox-Gastaut syndrome. Young patients who suffer from these conditions generally suffer from chronic seizures, sometimes up to 100 per day. In numerous studies, CBD was found to reduce the number of seizures, and in some cases stop them altogether. The US Food and Drug Administration (FDA) approved the world’s first CBD-derived medicine, Epidiolex, in June 2018, to treat exactly these seizures for these two aforementioned conditions.[6] In Europe, Epidiolex was approved by the European Medicines Agency in July 2019 and in the UK, Epidiolex was approved for distribution by the NHS in November 2019.[7][8]

It is clear that we are only just beginning to understand the full range of therapeutic applications for CBD. Clinical trials are currently underway for everything from Parkinson’s and Huntingdon’s disease, to Rett syndrome and PTSD.

 

Natural health and wellness

As our understanding of CBD has improved, a market for CBD has also emerged in natural health and wellness. The passage of the Agriculture Improvement Act (also known as the Farm Bill) has stymied much of the stigma associated with the cannabinoid. Statements from the World Health Organisation affirming that CBD has “no effects indicative of abuse or dependence potential” have also captured the attention of consumers preferring natural remedies.[9] CBD has started popping up in all kinds of health and beauty stores.

Cowen’s Vivien Azer, the first senior Wall Street analyst to cover the cannabis industry, noted in March last year that strong consumer interest in CBD had been validated by a growing number of consumer brands.[10] When asked about its popularity, she responded:

“I think it’s because for some consumers, it actually works as both an anti-inflammatory and anti-anxiety [product]”. Those are characteristics that are tangible to the consumer. With CBD, you know if it works for you or not. There is a tangible payback in relatively short order.”[11]

According to a Gallup survey conducted in 2019, nearly two in three Americans indicated they had some familiarity with CBD.[12] As many as one in seven (14%) said they were using CBD products already.[13] The most commonly cited reasons for using CBD were pain relief (40%), anxiety (20%), insomnia (11%) and arthritis (8%).[14]

 

Key companies in the CBD space

Consumer interest in CBD is also creating compelling investment opportunities in companies providing CBD products and services. Companies operating just in the “Hemp & CBD” category including names like Charlotte’s Web, cbdMD and Ecofibre.

Charlotte’s Web

Charlotte’s Web is a US company that creates and distributes health supplements made from whole-plant hemp. The company’s products are manufactured from proprietary strains of whole-plant hemp extracts, containing a full spectrum of phytocannabinoids, including CBD, terpenes, flavonoids and other less significant but valuable hemp compounds.

cbdMD

cbdMD is a US premium CBD oil company that focuses on first-class hemp grown on nutrient rich US farms. The company’s products are designed to provide natural support and maintain general well-being, and include things such as CBD oil for pain relief, inflammation formula and bath bombs.

Ecofibre

Ecofibre Limited is an Australian company that produces and sells hemp derived products to consumers and retailers in the US and Australia. The company’s products include cannabinoid oil and nutraceuticals as well as hemp derived food and textiles.

 

Conclusion

The CBD market continues to generate headlines. What started as a modest “side-show” to the broader cannabis market is now talked about as an unrelenting force in health and wellness. CBD has also climbed its way into the pharmaceutical arena through FDA-approved medicines like Epidiolex (and several others in the pipeline). As scientists begin to unearth new applications for this extraordinary cannabinoid, we can expect to see further growth in the years ahead.

 

Related ETF

FLWR: Rize Medical Cannabis and Life Sciences UCITS ETF

 

References:

[1] DOCMJ, “How Many Different Cannabinoids Are There?”, 2019. Available at: https://docmj.com/blog/2019/05/14/how-many-different-cannabinoids-are-there/

[2] CBD School, “Everything You Need to Know About CBD Isolate”, September 2019. Available at: https://www.cbdschool.com/how-to-use-cbd-isolate/

[3] Health Harvard, “Cannabidiol (CBD) – what we know and what we don’t, August 2018. Available at: https://www.health.harvard.edu/blog/cannabidiol-cbd-what-we-know-and-what-we-dont-2018082414476

[4] Professor Michael P Barnes, “The Beginner’s Guide to Medical Cannabis”, Page 15. Designed and Published in 2019 by Berrydales Books. Copyright © 2019

[5] IBID

[6] FDA, “FDA approves first drug comprised of an active ingredient derived from marijuana to treat rate, severe forms of epilepsy”, June 2018. Available at: https://www.fda.gov/news-events/press-announcements/fda-approves-first-drug-comprised-active-ingredient-derived-marijuana-treat-rare-severe-forms

[7] European Pharmaceutical Review, Cannabidiol-based treatment receives marketing approval from EMA, July 2019. Available at: https://www.europeanpharmaceuticalreview.com/news/95506/marijuana-based-treatment-approval-ema/

[8] GW Pharmaceuticals, “Press Release”, November 2019. Available at: http://ir.gwpharm.com/news-releases/news-release-details/gw-pharmaceuticals-receives-positive-nice-recommendation

[9] Forbes, “WHO Report Finds NO Public Health Risks or Abuse Potential for CBD”, March 2018. Available at: https://www.forbes.com/sites/janetwburns/2018/03/18/who-report-finds-no-public-health-risks-abuse-potential-for-cbd/#2a4baa122347

[10] SeedWorld, “Consumer CBD Craze, Demand Surge”, September 2019. Available at: https://seedworld.com/consumer-cbd-craze-demand-surge/

[11] Bloomberg, “The Expanding CBD Market Begins to Witness Thawing Regulations”, November 2019. Available at: https://www.bloomberg.com/press-releases/2019-11-05/the-expanding-cbd-market-begins-to-witness-thawing-regulations

[12] Gallup, “14% of Americans Say They Use CBD Products”, August 2019. Available at:  https://news.gallup.com/poll/263147/americans-say-cbd-products.aspx

[13] IBID

[14] IBID

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