Despite all the buzz surrounding legalized marijuana, the real success story is the less talked about hemp derivative cannabidiol (CBD). The market is set to grow by 50% a year over the next few years. This impressive growth is largely down to the medical applications of CBD.
CBD has a variety of uses in medicine. These range from treating the symptoms of substance dependency to pain relief and anti-inflammatory treatment. The main advantage of CBD is that it allows patients to take advantage of the pain relief that cannabis provides without experiencing the accompanying high. This allows it to be legal on a federal rather than state level.
One company in particular has leveraged an effective marketing campaign to dominate the CBD market. PotNetwork Holdings Inc (OTC:POTN) saw unprecedented growth in 2017 and they look set to continue beating expectations into 2018.
SeeThruEquity believes that PotNetwork Holding will perform well in 2018
The improved forecast comes on the back of higher than expected profits for the final quarter of 2017. The report also notes that that POTN has been able to maintain healthy operating profit margins of around 7% this equates to an operating profit of $0.66 million in the first nine months of 2017.
How has PotNetwork Holding achieved this growth?
Despite increased operating costs, POTN has been able to generate significant returns after their acquisition of Diamond CBT in January 2017. The company used a formidable combination of high quality products and an aggressive advertising campaign to improve their profits quarter on quarter.
The combination proved so successful that their sales for 2017 were approximately 70% higher than their initial estimates at the beginning of the year. These stronger than expected sales are what have allowed PotNetwork Holding to sustain their impressive profit margins.
By far the most significant factor in POTN’s growth was the acquisition of Diamond CBT. This has allowed POTN to easily distrubte a variety of high quality CBT products and become a recognized brand among consumers.
The independent equity research firm SeeThruEquity upgraded their forecast for PotNetwork Holding in their January update. SeeThruEquity believes that after an incredibly successful year PotNetwork Holding looks set to do even better in 2018.
What is the outlook for POTN shares in 2018?
PotNetwork Holding has been able to successfully leverage their acquisition of Diamond CBT in January 2017 to push the company towards record profits. A formidable combination of varied high quality products and an aggressive advertising campaign allowed the company to improve their profits quarter on quarter.
This increased profit has garnered investor interest and POTN shares have skyrocketed as a result. It is likely that POTN shares will hit the target price of $1.25 and if the growth rate of the CBT industry continues to be impressive then it could be possible that it even exceeds it.
One of the biggest potential factors could be whether POTN shares become uplisted to the QTCQX or a national exchange. CEO Dr Richard Goulding has stated that his ultimate goal is to get the company listed on a national exchange. This would have a huge effect on the share price and would lead to a large increase in liquidity for the shares.
As PotNetwork Holding continues to grow they will also be able to leverage the size of their operation to realize better profits. Given the potential for growth in the CBT market it is possible that we will POTN beat expectations once again in 2018.
With the solid 2017 performance and the potential for future growth it is likely that the price of POTN shares will continue to grow. This makes them an attractive choice for investors who are interested in taking advantage of the growth potential of low value shares.
Whether PotNetwork Holding is able to make good on their potential remains to be seen however the odds, and the numbers, seem to be very much in their favor.
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