Pet CBD is a huge market and one small cap is riding that wave
Health & Biotech
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Special Report: Cannabis products for pets is big business but just two ASX-listed companies are paying it much attention – and only one is making money in the sector.
For some pet owners their beloved kitty or canine is their baby, and they will pay considerable sums to ensure their fur-children are comfortable and healthy.
As a result, the global pet health market is one of the most resilient growth areas in the medical space today, and within this lies the booming cannabis pet health industry.
As the CBD hemp market becomes hyper-competitive, animals are a way into the cannabis sector that few companies on the ASX are testing.
The only options right now are CannPal (ASX:CP1), which has adopted the lengthy clinical trial model and making medication for pets, and Creso Pharma (ASX:CPH) which has developed and is already selling a range of CBD animal food supplements.
These companies are relying on a series of market drivers that are underpinning the overall growth in pet care spending.
Global Market Insights says increasing veterinary costs are being met by a corresponding demand for pet insurance, and as more is spent on pet care the lifespan of animals is extending and fuelling further growth.
Furthermore, those pet owners are more willing to spend significant sums on their pets’ health and cut back on personal spending than pet expenses, according to data from UK market researcher Mintel.
Finally, developing an animal health product is less expensive and simpler to get to market than a human treatment or drug.
For example, PharmAust (ASX:PAA) has a human cancer treatment, but is developing the doggie version first as it will be quicker to get to market — and therefore faster to make money from — and it will be able to use some of that data to back up the human clinical trial process.
While CannPal is still working through its clinical trials, Creso is already making money from its anibidiol® range of complementary hemp-based feed for cats and dogs, that contains full spectrum CBD as well as Omega 3, 6, 9 and vitamins B3 and B6.
Creso recently surpassed its own milestone of treating 100,000 dogs, or sales of 3 million sachet doses of anibidiol® granules since launch in 2017.
The company is playing into the theme of the humanisation of pets, which has made owners more conscious of their fur babies’ health.
This thematic has increased the demand for natural and organic pet care products, and pet food products with additional features such as health condition-specific ingredients, which Global Market Insights says is driving the global pet market.
The numbers to back those market drivers are convincing: the global pet care market is estimated to hit $US184bn ($273.9bn) by 2023.
Cannabidiol (CBD — a compound of the cannabis plant that’s legal in more places than THC) pet products could reach $US1.7bn in the US alone by 2025, according to Brightfield Group.
Their data shows sales of CBD pet products grew to over 10 times its 2018 size in 2019, producing $US321m in sales, and is projected to reach $US563m by the end of 2020.
In 2017, a study by Animal Medicines Australia (AMA) found Australians spent $12.2bn on their pets, up 42 per cent since 2013.
In Europe the pet care market is estimated by Statista to be €27bn ($44.5bn) in 2020.
The US may be where the most is being spent on pet health, but the rest of the world won’t be left behind.
The Creso examples shows how wide the global opportunity for pet CBD products is.
Creso developed and produces anibidiol® Regular and anibidiol® Plus for small, medium-sized and large pets to support the reduction of stress and help the nervous system of these animals function well.
It has commercialised these products in collaboration with animal health major Virbac S.A. in more than 10 countries in Europe.
Global sales of anibidiol® grew approximately 700 per cent in 2019.
Creso is preparing to launch the range in North America and Latin America, and recently launched a new product, anibidiol® Oil 500, for lifecycle management for pets.
Furthermore, Creso plans to launch two newly developed hemp-derived pet health products in 2020.