The one OTC stock that needs to be on every investor’s radar right now is CBDD stock. We initially reported on CBD of Denver Inc (OTCPK: CBDD) in mid-November before the stock surged 1166.67% to its mid-February peak. We tipped our subscribers off on it again twice in May here and here.
In a nutshell, we’ve been all over this company and its blue sky possibilities. Especially as we consider the macro-level catalysts for CBD and cannabis and how CBD of Denver is doing things differently. While the industry’s potential in the U.S. is immense with a green-friendly administration in power, the U.S., and North America, for that matter, may not have the most upside potential for cannabis any longer. The industry has become increasingly saturated in the U.S., and North America. Quietly, Europe, specifically Switzerland, might be the source of the next big green rush.
Guess who’s at the forefront of it all? CBD of Denver (OTCPK:CBDD).
While the name might tell you it’s another Colorado weed penny stock, don’t be fooled. Through its one-of-a-kind operations in Switzerland, CBD of Denver has legitimate disruptor potential as the possible new face of cannabis and CBD in Switzerland and the entire European Union. After all, did the company not just see its revenue skyrocket a stunning 467% Year-Over-Year?
The key to trading OTC stocks is finding momentum BEFORE it happens and then be patient. Now, when we say that we find momentum BEFORE it happens, we are investors looking to position our subscribers BEFORE the move happens.
After all, CBDD isn’t the first groundbreaking CBD/cannabis disruptor we’ve tipped our subscribers off on before it saw a massive rally. We also reported on CBD Life Sciences Inc (OTCPK: CBDL) before it broke out in February. We subsequently tipped our readers off on Demand Brands (OTCMKTS: DMAN) and the broader sector’s recovery after its May 18th, 2021 acquisition of the Lucky Chief brand. This is what we do here.
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CBD of Denver (OTCPK:CBDD) is a well-rounded cannabis, CBD, and hemp oil company. While it also produces and distributes cannabis and CBD products in the U.S., its core focus is the European and Swiss markets.
However, it’s so much more than just your run-of-the-mill cannabis company. In fact, the best way to describe CBD of Denver is a diversified firm with a triangular growth strategy.
CBDD stock is a company focused on using its equity to acquire profitable Swiss assets at attractive valuations. Why? To create value for its shareholders and build on its passion of unleashing cannabis’ full potential to improve lives and strengthen communities.
Buying Swiss competitors is the company’s bread and butter. The company’s overall goal is to acquire, grow and support Swiss Cannabis Companies showing trailing 12-month revenue between 5.0 – 15.0 Million Dollars. The company has already closed 5 acquisitions. But in the pipeline, it’s approached and identified 8-10 potential targets, has 2-4 potential targets under review, and has 3 potential targets in the negotiation phase.
That’s cool and everything, but as an investor, you’re probably asking yourself, “why should I care about the Swiss cannabis industry”?
Glad you asked.
CBD of Denver’s focus on Switzerland is what makes them stand out in an increasingly crowded cannabis space. Quietly, Switzerland could be the very best cannabis-related opportunity in all of Europe. If not, the world.
First and foremost, the legal framework for cannabis is comparatively progressive, liberal, and developed than the rest of Europe. It is fully legal to grow, produce, and sell CBD products in Switzerland, for example. But what indeed puts the icing on the cake is that Switzerland is also the only country where growers can legally grow cannabis up to a 1% THC-Level.
But outside of the lack of legal red tape that you’d need to go through as a cannabis provider or operator in Switzerland, do you realize that the Swiss market has a population of about 8,654,622 people smack in the middle of Europe?
You very well could have a market en route to becoming the jewel of Europe’s snowballing CBD and cannabis space.
The primary objective of CBD of Denver’s acquisition-driven business strategy is to increase the volume of flower imports and sales on the wholesale side. This is done by developing imports from other countries worldwide, acquiring new suppliers across the globe and expanding both its client and partner network.
On the wholeside side, CBDD stock also aims to add new products to an expanding portfolio while building its footprint in new markets through growing its distribution network in the EU.
The company recently announced that it started building out of its own extraction and washdown facility in Switzerland just last month. This will give the company the potential to process two tons of flower in-house a month while drastically lowering outsourcing costs without added expenses. After all, why would the company need to spend the extra money if services can be covered through its existing workforce?
At the end of May, CBDD also announced that it signed a contract with one of the largest Swiss producers of premium CBD flowers. All with the intention of its retail subsidiary Rockflowr (which we will go more into detail about) to take over all of the producer’s wholesale clients.
CBDD CEO Marcel Gamma said, “This contract will help us meet increasing demand while setting the stage for accelerated revenue growth.”
Retail & B2B
In CBD of Denver’s Retail & B2B operations, the company’s built Rockflowr GmbH into Switzerland’s Number 1 CBD Exchange. While the company also boasts subsidiaries like CBD Welt 24, BlackPearlCBD, and GmbH, Rockflowr has been its most successful and primary moneymaker up to this point.
Rockflowr boasts roughly 50 CB Strains, which in itself is impressive. However, with the ability to source hemp flower directly from the U.S. in large quantities, this simple-to-order, securely delivered, and simple to pay platform has also grown its distribution to more than 7 countries in Europe, too.
CBDD stock has several plans to help accelerate Rockflow’r growth, such as its plans to build a new call center, expand Rockflowr’s product portfolio, strengthen its market presence through focused marketing and social activities, and develop a new webshop and product landing pages.
CBD of Denver also has its eye on finding more direct acquisitions of new clients throughout Europe and strengthening the sales support for account teams.
The best part? The CBDD Stock May Be Grossly Undervalued…Despite Blowout Earnings Growth
So at face value, the CBDD stock has been trading sideways. But let’s do a little bit of digging.
First, let’s talk about the technicals and returns. We discussed earlier the stock’s surge of 1166.67% to its mid-February peak after we first reported on CBD of Denver Inc (OTCPK: CBDD) back in mid-November. Although since then it’s pulled back, we could be amid a significant breakout and trend reversal while still being at a beautiful entry point.
Based on its MACD and its 47.38 14-day RSI, CBDD stock still might be closer to oversold than overbought and at a mouth-watering entry point.
Plus, according to BarChart, many of its technical indicators show BUY signals too, such as its 20 Day Moving Average, 20 – 200 Day MACD Oscillator, 50 Day Moving Average, 50 – 200 Day MACD Oscillator, 200 Day Moving Average, and 100 – 200 Day MACD Oscillator.
So while the technicals may have some bullish indicators, it’s the fundamentals that are the real story behind the stock. We can talk about what this chart says or what that indicator signals. But what it all comes down to is that numbers don’t lie, and CBDD’s numbers show jaw-dropping growth.
On May 10, 2021, CBD of Denver announced that it generated $2.44 million in revenue in April 2021. This is up a staggering 467% from $0.43 million in April 2020.
“We are extremely pleased with the efforts of our sales team led by Pascal Siegenthaler,” said Marcel Gamma, CEO of CBD of Denver. “We continue to focus on accelerating sales growth, opening new distribution channels for Rockflowr, and pushing to achieve our most important priority milestone – becoming a fully reporting company under US GAAP in the near future.”
This is especially impressive when you consider how far the company’s come from a debt-ridden, poorly managed cesspool.
In a recent letter to shareholders, CEO Marcel Gamma said that CBDD had no toxic debt or convertible debt. He emphasized: “Prior to current management coming in, the Company was debt ridden and poorly managed. As you can see in our financial statements, past debt has been eliminated. The Company is cash flow positive.”
He further said that CBDD stock wouldn’t permit any share dilution.
With All The Being Said: How Big Could The European Market Opportunity Really Be?
Look, the catalysts in North America cannot be ignored. We have arguably the most green-friendly administration in office in history. State after state appears to be legalizing cannabis and CBD in some way, shape, or form, too. Already in 2021, Virginia and New York legalized cannabis. Is federal legalization next?
Having said that, the North American market has become increasingly saturated. If you didn’t get into the North American green rush 5-10 years ago, there’s a chance you potentially missed the boat.
Europe, however, may have more ground floor potential. Especially when you consider that Europe’s addressable cannabis/CBD market has a population of approximately 746.4 million- double the U.S. Market.
Additionally, as of 2020, the market was worth about €450 million, or 31% of the global market share. By 2023, this market could skyrocket to at least €1.5 billion and grow by an astronomical 400%.
Plus, according to Technical420:
“When compared to Canada and the U.S., the cannabis industry in markets like the EU or South America is much less saturated and we find this to be significant.
Another reason we are favorable on the lack of saturation in these markets is related to the pricing of cannabis. When compared to Canada and the U.S., the cost of cannabis is significantly higher at the consumer level in markets in the EU and we are favorable on the profitability metrics that are associated with these regions.”
The tailwinds blowing in CBDD’s favor are undeniable. It’s a growing company, in a vital part of the world, and in a skyrocketing industry.
The best part? Despite everything from macro-level catalysts to micro-level operations with solid growth potential for the company, CBDD stock may still be grossly undervalued.
The company reported a 467% increase in revenues from April 2020 to April 2021, which are eye-popping numbers for a company trading under a penny a share.
When you look at these numbers for CBDD, coupled with its business model, it’s hard to believe that its stock price will remain this cheap for much longer. It could quickly go on a similar type of 1166.67% rally that it went on after we first reported on the company in mid-November to its mid-February peak.
We believe that CBDD stock is one of the best bets for investors on the OTC Markets and is the type of stock you own, not trade.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.