Great news for the CBD industry this week is even better news for penny stock investors. The FDA is making progress on CBD research.
And we know one of the best CBD penny stocks to buy as it happens.
Because they trade for under $5, penny stocks can make huge leaps on small changes. It could be a new drug getting approved by the FDA. Or it could simply be a broader market bounce.
Today, it's both. Our top CBD penny stock is going to thrive on FDA approval. But it's also going to profit from a spike in the CBD industry over the next few years.
The CBD market is still projected to hit $2 billion by the end of 2020... and $20 billion by 2024. And the U.S. Food and Drug Administration is going to help that.
Meanwhile, we'll show you the best CBD stock to watch today. But first, here's how the FDA will eventually drive CBD penny stocks through the roof.
What's Moving CBD Penny Stocks Today?
The FDA has been working to approve CBD products for more widespread use. But it's taken its sweet time.
In fact, the FDA hit two CBD companies with class action lawsuits in December 2019. Charlotte's Web Holdings Inc. (OTCMKTS: CWBHF) and CV Sciences Inc. (OTCMKTS: CVSI) were both accused of marketing their product as a "dietary supplement" without FDA approval.
This may have stirred controversy about the CBD industry as a whole. But the progress we've seen since then tells another story about CBD stocks.
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A company called ValidCare is conducting a study to answer specific CBD questions from the FDA.
Though Charlotte's Web Holdings came under fire by the FDA last year, it is now one of seven companies funding research. The others are private companies CBD American Shaman, Boulder Botanicals, CBDistillery, HempFusion, Kannaway, and Columbia Care.
Each company has sponsored the study with over $100,000. And more CBD firms may join between now and kickoff.
The latest development from the study is that they are set to begin examining liver safety next month. It's going to take data from 1,000 participants on daily use.
The support from companies like Charlotte's Web is huge for the study. Efforts like these can cost millions of dollars. But having big CBD names throw their hats in the ring ensures the FDA can get more precise, actionable data.
It's great branding for Charlottes Web. Even more so, it accelerates CBD products toward FDA approval. The FDA stamp will be a critical step in normalizing and popularizing CBD.
So progress in this study means the CBD industry is getting closer to the value we're all anticipating - $20 billion in sales.
Now, here is the CBD penny stock to buy before we get there. The best news is, this company is already FDA-registered...
The Best CBD Penny Stock Now
Cannabis Sativa Inc. (OTCMKTS: CBDS) is a California company that operates in both Telehealth and Hemp & CBD Consumer Goods sectors.
With these diverse products, it is well-aligned to meet a future where cannabis and CBD products are less taboo.
Its subsidiary, PrestoDoctor, is the first marijuana company to be accepted into the American Telemedicine Association. The company offers online physician cannabis recommendation services.
That's a key part of a digital future as well. Many businesses have been forced to work from home due to the pandemic. And there will likely be a huge shift to telehealth as well over the next few years.
Cannabis Sativa also manufactures hemp CBD products, of course. It offers "over 400 lap-tested CBD products." Its facilities in Anaheim are registered and compliant with FDA regulations.
In its May financial report, the company announced doubling its revenue in 2019. In 2018, it brought in over $505,000. In 2019, the number was $1.1 million.
It also reported success during the COVID-19 pandemic, from an increased interest in telehealth.
The company doubled its cash, from $151,000 to $336,000 in 2019. That raised its free cash flow from -$690,000 up to $92,000 for the year. That's either going to help it invest in growth down the line or protect it against any potential COVID-19 setbacks.
You can buy shares of CBDS for just $0.60 today. Don't be surprised if it doubles or triples as the public takes further notice and CBD products go mainstream.
Action to Take: Keep your eye out for progress on the FDA's CBD study. FDA approval of cannabis and CBD products only encourages further interest from the public. Cannabis Sativa Inc. (OTCMKTS: CBDS) is the cannabis penny stock to watch as that happens.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.