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Why Smart Decision, Inc. (OTCMKTS:SDEC) Shares are Going Parabolic

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If you have been following stocks in the CBD space, then you may have noticed the emergence of its apparent new star, Smart Decision, Inc. (OTCMKTS:SDEC).

The path to fame and fortune in the CBD marketplace was supposed to be so easy in 2019 after the passage of the US Farm Bill in December 2018. But fate had other plans, and most of the stocks in the space are in tatters after a bruising bear market marred by FDA warnings and a historic supply glut. But one stock at the center of a new emerging narrative is standing triumphantly astride the carnage and rubble with a fresh model. And it’s working.

Smart Decision, Inc. (OTCMKTS:SDEC) is taking advantage of the same problem that’s bedeviling most other plays in the CBD publicly traded equity sector. In short, there are too many producers, and they can’t find a way to connect with customers.

Smart Decision is at once their salvation and the better option for investors. The company is in late-stage development of an ecommerce portal driven by a unique AI-assisted cloud-based computational data engine designed in partnership with MIT-trained computer scientists to match new CBD consumers with the CBD product that best meets their needs.

No one doubts the big investment thesis here, by the way. Just because the vast majority of CBD stocks have been in meltdown mode over the past year doesn’t mean the CBD product market isn’t transitioning from niche to mainstream. Experts have it growing by a stunning 125% CAGR over the next half-decade. Demand is booming and will stay that way for at least the next 20 quarters. But the average producer of CBD-based products isn’t able to benefit from this because there are too many of them and it’s hard to connect with new adopters who don’t understand how to navigate the impossible range of choices implicit in the CBD shopping experience.

In other words, there’s a fundamental problem with selling CBD products. And SDEC is the only company out there that seems to have the answer. Hence, the blooming share price.

 

The Gold Rush

Back in the mid-1800s, prospectors from all over the US rushed out to California because “there’s gold in them thar hills!”

The news of gold in the California mountains had reached clear across to New York, Boston, and Washington DC. And tens of thousands of hopeful adventurers made their way out for the chance to get rich. But, as history tells us, the folks who really made the big money were the ones stationed in the foothills selling picks and shovels to the newly arrived, starry-eyed prospectors coming in by horse and carriage from the east.

Note that nothing in this story suggests that there wasn’t literally tons of gold in “them thar hills!”. Over 750K pounds of gold was mined in the region during this period. But the vast majority of the miners didn’t really make out.

The CBD boom is a similar reality right now, from a boots-on-the-ground point of view. For new gold miners, the problem was how to get at the potential gold locked deep under the ground. For CBD producers and infused product suppliers, the problem is how to connect with new customers ready to try CBD for the first time.

At this point, it seems SDEC has the magic recipe, and the market is starting to discount the topline growth set to come online when it launches the platform next month.

In short, CBD is a complex proposition from a shopping standpoint. You have to choose between bioavailability formats, delivery mechanisms, potencies, brands, and other complicated variables. This is a daunting task if you don’t know what you’re doing at the start. That complexity is a turnoff and it keeps some folks away altogether.

For a CBD producer, this complexity presents almost as troubling an obstacle as the rampant competition. SDEC has predicated its model on solving this dilemma from both ends of the equation.

 

The Right Tool for the Job

The Smart Decision solution is “a consumer-facing resource designed in partnership with MIT-trained software engineers, leveraging computational data science, machine learning, and AI to connect CBD product suppliers with new-adopter customers in search of CBD-based product solutions, overcoming the overly complicated CBD product landscape to allow CBD shoppers to quickly find the right product to suit their needs.”

The platform is on-schedule in the development timeline and the company plans to launch a beta version by the end of March. An advanced preview of the platform will reportedly be granted in person to attendees at the USA CBD Expo 2020 in Las Vegas, NV, which takes place from February 13-15.

The company is also finding a lot of success in gaining traction with producers and suppliers. Remember, this approach only works if the company is able to lure suppliers into participation. As it turns out, this has been very encouraging, and probably represents one of the factors driving the stock higher: everyone wants to be on this platform – probably because they are having so much trouble connecting with consumers.

In a recent release, Adam Green, Smart Decision CEO, stated, “The ideal scenario, from our perspective, is enough interest and enthusiasm on the part of CBD brands to create competition among brands for access to our platform as participating member affiliates. That will allow us to negotiate the most favorable terms once the technology development process is complete and we launch the fully-enabled iteration of the Smart Decision platform. At this point, we are already solidly heading for that ideal scenario, which is well ahead of even our most optimistic assumptions as of 60 days ago.”

The company apparently is worried about the opposite problem already: too many CBD producers champing at the bit to be involved. That likely means it will get great terms on negotiated relationships, which will spell big profits flowing back to shareholders over time.

Hence the action in the stock.

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American Green Inc (OTCMKTS:ERBB) Achieves Breakeven In 2020, The First After Entering Cannabis Sector

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American Green Inc (OTCMKTS:ERBB) has reported operational breakeven in 2020. It is the first after entering the cannabis space. David Gwyther, president of American Green, said the company is putting in significant efforts to achieve self-sufficiency for several years while availing the funds from outside to meet the requirements. With this breakeven, the company needs to borrow less for operational needs and improve the bottom line.

Begins the sale of One HD Seltzer Water

American Green commenced the sale of One HD Seltzer Water through its one CBD store. The company expects to add additional retail stores in California, Nevada, and Arizona. Vice President (Sales – Worldwide) of American Green, Kevin Davis, said the company spent almost year in search of a 12 oz Can of CBD Seltzer/ Sparkling Water that comprises 25 mg of pharmaceutical grade CBD and zero THC for sale through its AGM Smart Vending Machines. The company also plans to sell CBD Seltzer/ Sparkling Water via its online stores to the customers directly.

Maintains highest standards for all CBD products

American Green shall always strive to maintain the highest standard for all the CBD products. The company will maintain a crisp and clean taste and consistency of pharmaceutical grade CBD in every CBD can. Davis said One HD Water meets all the requirements. It has even exceeded expectations.

One HD’s founder – Mike Falcione said he is thrilled that American Green has One HD Sparkling Seltzer Water for the distribution. He further said the company is aware that American Green is becoming one of the reputed brands in the nation to offer high-quality CBD products. One HD will extend all the necessary support to American Green to achieve the sales targets. Davis said the company is in discussions with Mike for the distribution of One HD CBD Seltzer Water. He looks forward to working with Mike and his team.

CBD as a viable solution to manage pain

The demand for CBD is very high because Americans consider it as a viable solution to manage and relieve pain. According to Nielsen, the leading data measurement authority, the market for CBD will reach $2.75 billion this year.

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Why ISWH May Be a Prime Turnaround Opportunity in the Making

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For those in search of speculative turnaround potential in the small and micro-cap market space, you could do a whole lot worse than International Spirits & Wellness Holdings, Inc. (OTCMKTS:ISWH). The big picture here is a diversified branding play with commercial-stage operations already in place in the CBD, Wellness, Home Healthcare, and Spirits industries, and development stage operations in the Renewable Energy and Supply Chain & Logistics markets.

Based on recent financial performance, the company may have recently gotten past the point where its operational cash flows can start to fully support its future growth investments. For any micro-cap, this is the golden point in the investment cycle: when growth becomes non-dilutive. ISWH is either at or very near this point, posting EBITDA profitability and triple-digit topline growth in Q3 and Q4 of 2019.

ISWH recently completed a shareholder-friendly restructuring and reverse stock split to better align its price-per-share quote with common standards for investor perception.

Pro-tip: In our experience, when a company has this much going for it, and then does this type of restructuring and realignment, it’s typically in front of a lot of major positive news. The shift in structure and share price is to set the stage so that the company’s existing long-term shareholders can get the most bang for the buck on new strong announcements set to roll out over coming weeks and months.

In other words, the stage is set for some big happy news for ISWH. Take note.

In the words of the company’s President and Chairman, Alonzo Pierce: “A shareholder-friendly restructuring was necessary to strengthen our relationship with capital markets, pursue a near-term uplist to a higher exchange tier, and set in motion our operational strategy for 2020. We have a number of very compelling catalysts set to roll out, but we needed to provide a viable context – to lay a foundation for that success – as an initial step. We have achieved that with our restructuring and reverse split last week.”

That just about says it all.

The Foundation

The foundation for ISWH right now is its two main commercial-stage growth drivers: CBD-based products and the company’s rapidly growing home healthcare business.

The CBD products segment is positioned for rapidly accelerating growth this year following the signing of its defining partnership agreement with BioPulse Labs, a nationally-recognized brand development and manufacturing leader in the nano-infusion of CBD products. The BioPulse agreement provides for effectively a starter package in product development and marketing for the fresh launch of five new CBD-based wellness products. That will effectively push a restart button for the company’s P19 brand of CBD-based products.

The company also has an edge through this partnership due to the fact that it will be that rare CBD products brand able to boast that all of its products are formulated and produced in FDA compliant and registered facilities. This is becoming a huge issue in the current world of garage-band CBD producers. Consumers don’t know what they’re getting when they purchase CBD products. And they’re starting to figure that out.

The Home Healthcare segment is rapidly expanding as well. This division saw quadruple-digit percentage growth during the back half of 2019, and the company has implied that this trend is set to continue in Q1 2020.

Home healthcare spending is expected to reach more than $186 billion in 2027, according to a recent analysis from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary. This vastly surpasses any other category of health care service spending, even including hospital inpatient care, physician and professional services, nursing facilities, prescription drugs, retail sales of medical products and anything else you can think of.

ISWH has put in place a strong operational footprint in this rapidly expanding market, and we would look for continued strong performance throughout 2020.

Conclusion

With this foundation in place, a possible inflection toward non-dilutive growth in the quarters ahead, and now standing on the other side of the company’s recent shareholder-friendly restructuring, ISWH is an extremely interesting speculative opportunity, especially given our assumption that the company is getting ready to add some very strong new catalysts into the mix in coming weeks.

ISWH management drove this same sense home in its latest release: “This is truly all about embracing a very aggressive growth-oriented future path at ISWH,” continued Pierce. “We have put in place a winning framework as a genuine disruptor in the health and wellness space, and we continue to see dramatic growth in that endeavor, including strong financial performance over recent quarters. We are also entering several new markets, with a true edge already in place, and will be providing details on those strategic moves over the very near term. Long story short: we have some very exciting announcements ahead and we wanted to provide a solid structural foundation in the stock ahead of those catalysts for the benefit of our committed shareholders.”

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ANVISA Authorizes Khiron Life Sciences Corp (OTCMKTS:KHRNF) To Import Medical Cannabis Products Into Brazil From Colombia

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Brazilian Health Regulatory Agency (ANVISA) has authorized Khiron Life Sciences Corp (OTCMKTS:KHRNF) to import medical cannabis products on an individual patient basis. Khiron can now apply for a license to export medical cannabis products to Brazil with this authorization. The company also needs the nod of TSX for the commercialization of cannabis in Brazil.

Khiron achieves a milestone

Director and Chief Executive Officer of Khiron, Alvaro Torres, said the company achieved another milestone on receiving the regulatory nod from ANVISA to introduce its medical cannabis products in the largest Latin American market. It allows the company to serve the patient population in that region. He further said Khiron work towards achieving authorizations in Peru and Colombia and improves its network in Brazil.

A regulatory framework to import medical cannabis

ANVISA has established a regulatory framework that involves a comprehensive procedure for the production and importing the medical cannabis products into Brazil. The medical cannabis products are prescribed by the physicians and marketed through pharmacies. Therefore, patients get safe access to legal medical cannabis products.  Cannabis is beneficial for regulating oily skin and helps to fight aging.

The market for medical cannabis

The demand for medical cannabis in Brazil expects to reach 1.4 billion in the next three years. Also, the patient base that comprises patients with chronic conditions in Brazil will increase to 3.4 million. The request for medical cannabis products in the nation almost tripled since 2015. Around 1,100 physicians are prescribing medical cannabis products to the patients.

Chairman of Khiron resigns

Sidney Himmel, chairman of Khiron, has resigned to pursue other interests. Following his resignation, Alvaro will act as interim chairman of the company. Deborah Rosati will head the audit committee.

Khiron formed a JV with Dixie Brands to focus on the development of cannabis products. As per the terms of the pact, Dixie will also engage in the manufacture and distribution of kuida brand CBD cosmeceuticals targeting Hispanic population in the US. The joint venture with Dixie Brands gives Khiron exposure to the US market.

Chris Naprawa is a president at Khiron. Before joining Khiron, he worked as MD at Primary Capital and as a partner at Sprott Capital Partners.

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