A new and interesting model is emerging in the CBD space that holds tremendous potential primarily because it is the first company we have come across in the space that is a true “ancillary model” – what the old timers call a “pick and shovel”. But, in this case, it’s a customer-facing model designed to capitalize on the combination of huge waves of new CBD adopters and the mass confusion that characterizes the CBD marketplace for ‘shoppers’ given the infinite permutations of choice that currently define that market.
Smart Decision, Inc. (OTCMKTS:SDEC) is a next-generation consumer-based LED & CBD algorithm innovator that has designed a proprietary, patent-pending “Smart Decision” algorithmic CBD product platform (CBDSmartDecision.com) geared toward aiding consumers in selecting the right CBD-based products to suit their specific needs.
Momentum Already Established
The company has already lined up a series of participating CBD products manufacturers who have expressed strong interest in joining the platform and have already signed LOI’s to that effect. The company also says it has a whole bunch of new partners ready to parade out and join the platform next. So, this appears to be a popular possibility for a new channel of distribution for producers.
The algorithm behind it all is about tailoring solutions to common problems. CBD has been identified as a potential solution – either preventative or curative – for many different common ailments. But consumers get stuck when trying to navigate the complexity of the CBD marketplace as it currently exists. There are just too many choices.
SDEC’s algorithmic solution is meant to solve that problem. And it’s already in process at the USPTO for a patent.
The Game Changer
The company’s most recent announcement is also very important.
The investment thesis with this stock really hinges on the credibility of its underlying processes. That’s why its latest announcement should play such a strong role in helping to drive the action because it just release news that it has formed a strategic engagement with RedBand Systems, a leading computational data engineering and software-as-a-service platform based in Cambridge, MA, founded by graduates of MIT.
If you are wired into the 21st century technology space to any extent, then you know that MIT is the hands-down gold standard institution when it comes to turning out the most talented software engineers on the planet. It’s a bit like finding out your lawyer went to Harvard or your doctor went to Johns Hopkins.
So, given that the SDEC story hinges on the credibility of its underlying back-end software architecture, the company’s partnership with the guys from MIT should represent a critical factor in shaping this story.
The Big Game
This is obviously even more important when one considers the stunning growth rate on display in the overall CBD market. According to Statista, estimated annual CBD usage rates in the USA are expected to rise from 6% of the adult population in 2018 to an explosive 25% within 3 years. CBD-based foods revenues are expected to hit $1.12 billion by 2025, or $3.72 billion if CBD-based beverages are included.
This growth is clearly being drive by mainstream consumer adoption of CBD products, which will continue to represent a tailwind set to push overall CBD sector growth in the quarters ahead.
According to research from MRFR, the global CBD market is estimated to register a CAGR of 125% from 2019 to 2026. The Brightfield Group joins in this appraisal, noting that 2019 alone is expected to show growth of over 700% as mainstream big-brand retailers – such as Kroger’s, Walgreens, Walmart, Rite-Aid, and others – begin to carry CBD products in plain sight of browsing consumers.
In other words, the steady theme is this: we are seeing mainstream adoption of CBD products, but there are also a million CBD producers out there. The only way to invest in this market is to find a stock that stands to benefit from that growth without being lost in the white noise of the crowd.
That’s precisely why SDEC could be so interesting: they stand to benefit from the growth, but they aren’t in competition with any of that crowd. They partner with it.
That sentiment was captured quite nicely by management in the company’s most recent release:
“The CBD market has expanded at such a rapid pace, with so many new adopters and first-time consumers, that consumer choice complexity has become a major opportunity,” noted Adam Green, CEO of Smart Decision, Inc. “After you weed out the low-grade products produced outside of FDA compliant facilities, you’re still left with enough permutations – potency, volume, grade, delivery mechanism, bioavailability – to make the average consumer’s head spin. There’s currently nothing out there to help people find the right product in a simple, easy-to-use interface. We have created a patent-pending system to do just that. Now, we have teamed up with the brilliant folks over at RedBand to bring it to life.”
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