ChineseInvestors.com Building Brand, Spinning Out CBD Biotechnology as CBD Trend Accelerates
Cannabidiol, or CBD as it is more frequently called, is a buzz word today, frequently a headline by mainstream media and niche publications alike for the trumpeted potential of the once-taboo component of cannabis and hemp. Bookending a monumental year for the cannabis industry, President Trump on December 20 signed the 2018 Farm Bill that, amongst other things, legalized the production and sales of industrial hemp and CBD derived from the plant.
Many watershed moments happened in the legal cannabis space this year in addition to the 2018 Farm Bill. To name just a few, Canada became the first G20 country to legalize recreational marijuana (and only second country in the world); New Zealand passed a medical cannabis bill; South Korea became the first East Asian country to legalize medical marijuana; Vermont and Michigan approved recreational marijuana to run the total of U.S. states where marijuana is legal to 10 (along with Washington D.C.); and Utah and Missouri made medical marijuana legal, the 32nd and 33rd states to do so.
Angling to capitalize on the emerging market, ChineseInvestors.com (OTC: CIIX) a number of years ago diversified its model as a Chinese language financial news and content and investor education platform to lay the groundwork to meet demand for hemp-based CBD products. By the end of 2016, the company was implementing its plan for online distribution of hemp-based CBD nutritional and cosmetic products.
While it maintains its legacy products and services, the company is leveraging its user base of more than 100,000 and brand it has built over nearly two decades in its quest to become a leading Chinese CBD public company.
CBD has been heralded as a treatment for a bevy of maladies and conditions ranging from inflammation to skincare to anxiety to epilepsy and back again. Unlike fellow cannabis constituent THC (tetrahydrocannabinol), CBD is non-intoxicating without the psychotropic high associated with marijuana caused by THC. Industrial hemp, often referred to as a cousin of cannabis, does contain CBD. However, it doesn’t contain THC, which has had proponents arguing that it shouldn’t have been lumped in with illicit drugs subject to prohibition for the last 80 years at the federal level.
To that point, the 2018 Farm Bill has opened doors to new lines of commerce and hemp-based CBD products in the world’s biggest economy. In China, the world’s second biggest economy with 1.4 billion people, cannabis remains illegal, although it is legal to add hemp-based CBD products to cosmetics.
ChineseInvestors.com is making inroads on several fronts, last month unveiling the first CBD skincare line of subsidiary CBD Biotechnology on Tmall, the largest online retail platform of e-commerce giant Alibaba. According to CIIX CEO Warren Wang, the launch makes CBD Biotechnology “the first CBD skincare company to enter Tmall.” Accompanying the launch, the
company said it was budgeting 2.5 million RMB for marketing and advertising of its CBD skincare product lines.
CBD Biotechnology is also planning to launch CBD Hemp Wine, a private brand of hemp-infused rice wine to capitalize on a trend in recent years towards infused wine and liquor.
Most recently, ChineseInvestors.com executed a letter of intent to acquire from BCDBG, Inc. exclusive rights to all sales channels for the VitaMist product line (retail, online, MLM) in Asian markets domestically and internationally. Per the deal, BCDBG will also develop an exclusive product line for ChineseInvestors.com, including vitamin-only sprays and vitamins/CBD combinations. VitaMist is a long-standing name in the business, awarded the first patent ever for a spray vitamin in 1985 and consisting of over 40 proprietary vitamin formulas today.
The proposed agreement dovetails with the CBD-based growth plans of ChineseInvestors.com, which includes a plan to spin-out of CBD Biotechnology. By dividing into two companies, ChineseInvestors.com leadership can refocus on the core financial services/media operations. On this front, the company this month tapped Alex Hamilton, a financial executive and Wall Street veteran, as Chief Financial Officer of the unit, tasking him to focus on the spin-out while overseeing other corporate functions.
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