Month: May 2020

Not long ago, previously acquisition-happy cannabis companies put the brakes on costs. Jointly, they lost cash a lot more often than they made it– so grabbing brand-new possessions to build scale ended up being a less hot concept than it had actually been a few years back.

That was then, and this is now.

Image source: Getty Images.

Aurora buys Reliva

Canada-based Aurora is reaching throughout the border for that acquisition. It announced it has accepted buy U.S. hemp-derived cannabidiol (CBD) products maker Reliva in a deal for roughly $40 million in Aurora typical stock, plus up to $45 million over the next two years in cash, stock, or a combination of the 2 if Reliva satisfies specific financial goals.

Aurora said it expects Reliva to be “immediately accretive” in regards to every marijuana business’s preferred functional metric– adjusted EBITDA. This would help Aurora, as it’s needed by financial obligation covenants to be adjusted EBITDA-profitable total in Q1 of next year.

Aurora didn’t state whether Reliva is profitable on the bottom line; I’m assuming it’s not if adjusted EBITDA is pointed out in location of net profit/loss. Its annual earnings is $13 million to $14 million, according to a report in MarketWatch; for scale, Aurora’s leading line in 2019 struck practically $248 million Canadian ($177 million).

This buy is rather unexpected, considered that Aurora has actually remained in retreat mode considering that late in 2015. It suspended construction and expansion activities at 2 of its facilities, hung a “for sale” sign on one of its greenhouses, and in the wake of the SARS-CoV-2 coronavirus furloughed around 500 of its workers.

While investors can be guardedly favorable about some current news with Aurora, such as its most current set of quarterly outcomes, I don’t believe they must jump for joy here.

Yes, CBD products are fashionable amongst specific customers recently. However they aren’t the big and fast-growing money spinner that would make an acquisition like this have a considerable impact.

The business’s balance sheet isn’t particularly strong, and it tends to release and invest its own stock a bit excessive for comfort, in my view. The Reliva acquisition does not move the needle on my typically bearish stance on Aurora– in spite of some motivating numbers in its Q3, it was well in the red for the quarter. It continues to struggle with numerous of the exact same troubles afflicting its Canadian cannabis peers

Curaleaf’s mixed Q1

Mentioning U.S. cannabis business, recently saw the release of Curaleaf‘s ( OTC: CURLF) Q1 financial 2020 numbers They weren’t half bad as far as recent weed stock profits go.

The cannabis producer and merchant didn’t hit the average expert estimate for profits, but it wasn’t too far away from it. Plus that line product increased by nearly 30%quarter over quarter to almost $965 million. Net loss, meanwhile, was narrower than anticipated and a considerable improvement over the preceding quarter’s result.

Curaleaf’s retail focus seems to be serving it well; dispensary openings and acquisitions were the moves that assisted raise that top-line figure. And in most states– although not always the business’s home of Massachusetts, a minimum of at first– marijuana shops have actually been classified as “essential” organisations permitted to operate through the coronavirus pandemic. This must assist keep the company afloat in the coming months.

It’s sounding a bullish note about the rest of 2020, forecasting that both earnings and the bottom line will continue to improve. The company appears to have sufficient money for now, so perhaps it won’t be tapping the financial obligation or equity markets for brand-new funding soon, as it has in the current past.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.”> Eric Volkman has no position in any of the stocks pointed out. The Motley Fool has no position in any of the stocks pointed out. The Motley Fool has a disclosure policy .”>

In recent weeks, Aurora Marijuana ( NYSE: ACB) stock has actually seen new life.

Then, on May 20, the marijuana manufacturer likewise revealed it was getting Reliva, a cannabidiol (CBD) brand name that would allow it to penetrate the U.S. market. As amazing a chance as that may seem at first glance, here’s why financiers should not put excessive stock in it.

It’s getting in an already crowded hemp market

Lots of headings market Aurora’s current acquisition as the company getting into the U.S. CBD market. All forms of CBD aren’t legal in the U.S. (federally), and Aurora can’t use non-hemp products that consist of more than 0.3%of tetrahydrocannabinol (THC).

Image source: Getty Images.

The excellent news is that according to research business BDS Analytics and Arcview Market Research, the overall CBD market in the U.S. is still anticipated to reach $20 billion by 2024, up from simply $1.9 billion in2018 And the bad news is that the rosy outlook for CBD doesn’t mean the opportunity is going to translate into considerable development for Aurora.

That’s due to the fact that Aurora will not just be taking on other U.S. companies for market share, but with Canadian pot stocks that are likewise seeking to benefit from the chances in the hemp market. The company’s key competitor, Canopy Growth ( NYSE: CGC) is currently in the CBD hemp market in the U.S., and one of the relocations it’s making to cut costs is to really stop farming for hemp at its Springfield, New york city location. The pot giant stated it had “an abundance of hemp produced in the 2019 growing season” that it was going to sell first prior to making more. It’s not simply Canopy Growth that has an excess of supply, either; it’s a problem for the whole market.

Julie Lerner, who is CEO of the PanXchange where hemp is traded, confirmed in January that there was a lot more supply than demand for hemp. She expects list prices to come down as an outcome of all the competitors. That’s not going to bode well for a business like Aurora, which is attempting to improve on its margins and get closer to success.

Having access to countless places does not guarantee development

In the news release announcing the acquisition of Reliva, there wasn’t a lot of details on how big of a player the company remains in the hemp market. Aurora referred to Reliva as “a leader in the sale of hemp-derived CBD products in the United States,” there wasn’t anything to quantify or justify that other than to state that its products were sold in more than 20,000 U.S. locations. According to analysts, Reliva’s sales over a 12- month period ending in February totaled $14 million in earnings.

Hemp-derived CBD company Charlotte’s Web ( OTC: CWBHF), sells its items in fewer areas, and it has far more powerful sales.

A year ago, the company tape-recorded sales of $217 million when its items remained in more than 6,000 places. The increase in places over the previous year hasn’t resulted in a rise in sales for Charlotte’s Web, and Aurora financiers shouldn’t make the error of presuming more areas imply greater income. If there are only limited items offered, or the stock isn’t moving, the variety of merchants bring the items may not suggest much for the company’s top line.

The move does not make Aurora a much better buy

Aurora anticipates Reliva to help the Alberta-based pot producer inch closer to accomplishing a positive adjusted incomes prior to earnings, taxes, depreciation, and amortization (EBITDA) figure. However, with Aurora sustaining an adjusted EBITDA loss of 50.9 million Canadian dollars in Q3, it has a long method to go to reach breakeven, with or without Reliva. The acquisition may help play a little part in enhancing Aurora’s bottom line, however the company still has a great deal of work to do in improving its financials.

The only certainty, it appears, is that the deal will result in more dilution for shareholders. The business prepare for the offer will close in June, and it will cost Aurora as much as $45 million in shares.

The acquisition is a modest one for Aurora that will help contribute to its leading line, however that’s about it; Aurora stays a dangerous buy, and one quarter and one acquisition isn’t going to change that. The pot stock is still down more than 80%over the past 12 months, significantly worse than the Horizons Marijuana Life Sciences ETF ( OTC: HMLSF), which has actually fallen by 60%.

David Jagielski has no position in any of the stocks pointed out.”>

A group led by scientists at Baylor College of Medication in partnership with Medterra CBD carried out the first clinical research studies to assess the prospective restorative impacts of cannabidiol (CBD) for arthritic pain in canines, and the outcomes might lead the way to studying its effect in humans. Scientist focused initially on these animals due to the fact that their condition closely mimics the characteristics of human arthritis, the leading reason for discomfort and disability in the U.S. for which there is no efficient treatment.

Published in the journal Pain, the research study initially showed both in laboratory tests and mouse models that CBD, a non-addictive item derived from hemp (cannabis), can considerably reduce the production of inflammatory molecules and immune cells associated with arthritis Subsequently, the research study revealed that in canines detected with the condition, CBD treatment considerably enhanced quality of life as documented by both owner and vet evaluations.

” CBD is quickly increasing in appeal due to its anecdotal health advantages for a variety of conditions, from minimizing anxiety to aiding with movement conditions,” said matching author Dr. Matthew Halpert, research study professors in the Department of Pathology and Immunology at Baylor. “In 2019, Medterra CBD approached Baylor to conduct independent clinical research studies to identify the biological capabilities of several of its items.”

In the current research study, Halpert and his colleagues initially measured the impact of CBD on immune actions related to arthritis, both in human and murine cells grown in the lab and in mouse models. Using Medterra tinctures, they discovered that CBD treatment led to reduced production of both inflammatory molecules and immune cells linked to arthritis.

The researchers likewise identified that the impact was quicker and more efficient when CBD was delivered encapsulated in liposomes than when it was administered ‘naked.’ Liposomes are artificially formed small spherical sacs that are used to provide drugs and other substances into tissues at higher rates of absorption.

Halpert and coworkers next evaluated the effect of naked and liposome-encapsulated CBD on the lifestyle of canines identified with arthritis.

” We studied pet dogs since experimental evidence shows that spontaneous designs of arthritis, especially in domesticated canine models, are more appropriate for evaluating human arthritis pain treatments than other animal models. The biological attributes of arthritis in canines closely look like those of the human condition,” Halpert stated.

Arthritis is a common condition in pets. According to the American Kennel Club, it affects one out of 5 pet dogs in the United States.

The 20 client-owned dogs registered in the research study were seen at Sundown Animal Hospital in Houston. The pet owners were arbitrarily offered with similar unknown medication bottles that included CBD, liposomal CBD, or a placebo.

After four weeks of daily treatment, owners and vets reported on the condition of the pets, whether they observed changes in the animals’ level of pain, such as changes associated with running or gait. The pets’ cell blood count and blood signs of liver and kidney function also were evaluated prior to and after the 4 weeks of treatment.

” We found encouraging results,” Halpert said. “9 of the 10 canines on CBD showed advantages, which stayed for 2 weeks after the treatment stopped. We did not identify alterations in the blood markers we measured, recommending that, under the conditions of our research study, the treatment seems to be safe.”.

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Austin Soldner and Michael Schaecher, the co-founders of the new sunglasses brand name Futuremood, met at the freshly formed San Francisco research study and advancement laboratory developed by the high-end audio tech developer Bose.

The 2 were tasked with working on Bose’s sunglasses wearable and bonded over a shared interest in tennis shoes and style. Over many conversations the 2 guys recognized there was a chance to utilize innovation to rewrite the sunglasses playbook and launch the very first new brand name to the market since Oakley came on the scene.

There was also a chance to bring the materials science and tech-forward methods that sneaker business have actually established to an industry that hadn’t seen any real technical transformations in decades.

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

Using technology established by the lens manufacturer Zeiss, Futuremood’s first glasses been available in four colors– a relaxing green, a revitalizing blue, a stimulating red and a focusing yellow. The company is introducing its eyeglasses in two styles, a blocky, chunky frame and a more conventional rounded frame.

Any mood-altering results are thanks to Zeiss’ halochrome lens technology, which the lens producer has actually been dealing with– and releasing papers on– to suss out the science behind its claims that the use of filtered light can alter the method folks feel.

There’s some initial research that the company has done, but the science is still mostly unverified (Zeiss carried out two research studies at European universities).

Schaecher and Soldner are followers, and the 2 long time tech officers see these lenses as a window into a larger world of material science experimentation and item advancement that they’re wishing to give market with Futuremood.

” If you think of sneakers and where Nike and Adidas got to where they are today, it was through innovation in product style and products and branding and marketing and all of that had actually been missing out on from the sunglasses area,” Schaecher said.

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

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

One thing sunglasses are is a very huge business. Customers spent $145 billion on sunglasses in 2018, according to the market research firm, Grand View Research

If Futuremood can catch even a portion of that market with its distinct spin on sunglasses, it’ll be in good shape.

As with any great direct to consumer product, Futuremood’s distinction begins with its product packaging. Tapping in to the mood-altering “wearable drugs” visual, the business’s product is packaged in boxes with the very same bright colors as the sunglasses. Inside there’s a cloth to clean the glasses, a velvet pouch to hold them and a fragrant pack of incense matches and a vaguely tarot-esque card with information about the glasses and the sensation they’re implied to stimulate (there’s even a Spotify playlist to listen to).

In an e-mail, Schaecher described the feeling as “not as subtle as CBD, however not as strong as a shot of tequila or glass of Rosé.

” Austin and I are truly into various methods of self care and taking moments and … we thought there was a chance to bring pleasure and pleasure,” with the packaging, Schaecher said. “ We do not expect people to be firing up Spotify playlists and incense matches whenever they wear things.”

Futuremood has actually been mostly bootstrapped to date, and like whatever 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 beyond Shenzhen,” stated Schaecher. “We quarantined the very first order for 2 weeks. Zeiss was right in that region of Italy that was getting hit hard. We have actually been postponing since then. It’s difficult to take into words what it’s like to grind on something for eighteen months … and then have to delay introducing.”

Even with the pandemic, though, the company continued with the design for its second item, which gives a tip for where Schaecher and Soldner wish to go with their service. “We have our second product line which is not mood-altering glasses,” stated Schaecher. “That’s a conventional sunglasses line that uses titanium alloy metals that are more typically seen in aerospace than in eyewear.”

The style visual is also more in the luxury vein, which Schaecher teased was akin to something that would be more in the house in a Cartier display room instead of a direct to customer brand name’s digital store.

Today, the business is going direct to consumers through its website, however it’s taking a look at the potential for some retail partnerships and field marketing when the nation opens back up for business.

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

Boing invites Real Checked CBD as a sponsor!

Real Evaluated CBD is known for efforts in bringing info about the CBD products for not only established brands, but the budding brands in the niche. We fuel our passion through the passion of our clients, asking us for updates on what is occurring in the CBD universe. Thanks to the laws in the United States that allow legal production of CBD items for health and research, there are some premier items on the market, but it is essential to know what you are buying to guarantee the very best purchase.

We at Genuine Tested CBD run all the items through laboratory tests and present whatever in black and white for our readers. Today, we examine Charlotte’s Web and its CBD products that include balms, creams, tincture, edibles, and pills.
Here is an evaluation of all the nine products of Charlotte’s Web that we tested.

This hemp-infused balm by Charlotte’s web includes 150 mg of botanical blend hemp extract. It has a calming scent, and we discovered no traces of pesticides and solvents in the mix. It consists of all the goodness of CBD at 107.2 mg per pack. It likewise contains THC at 4.69 mg and CBC at 4.48 mg per bundle. Our test results indicate that the overall CBD levels were lower than those declared on the label.

Our test results show the CBD levels are half the amount of what the label claims. It does contain a good CBD quantity still along with other beneficial cannabinoids.53 mg per bundle; whereas, CBD levels are at224

This hemp-infused skin cream features 750 mg of hemp extract. It does contain some CBD goodness, however our test results show 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 extremely helpful to unwind. Plus, there is 328.74 of CBD packed in this product.

Wow, this CBD isolate cast by Charlotte’s web is one of our favorites. It provides 20 mg of CBD per drop, and our test results suggest that this tincture consists of more CBD than the label claims, which is an advantage as it increases the efficiency of this product. The CBD levels are a whopping 782.81 mg per bundle. Nevertheless, there are no traces of any other cannabinoids in the tincture, and there are no solvents or pesticides.

This Web Hemp extract cast is an exceptional CBD item that is true to its label claims. We would say an excellent job! It uses 12 mg of pure CBD extract that provides other helpful cannabinoids present in all-natural hemp extract utilized in this item. It includes THC, CBC, and CBG at 17.87 mg, 17.65 mg, and 3.11 mg per package, respectively. The overall quantity of CBD per plan is 533.8 mg, with no trace of pesticides or solvents.

Our laboratory tests discovered an appropriate range of CBD per container at below 25%. It appears to be full-spectrum CBD and includes CBC and THC in the mix, which makes it area on with its whole hemp extract claim. The CBD, THC, and CBC amounts are at449

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.