Globally, consumers spend billions of dollars on their pets every year.
According to a study conducted by the German market research institute GfK, almost two-thirds of pet product sales worldwide take place in the United States and Europe. Figures released by the American Pet Products Association also show that in 2018 US consumers spent over $72 billion on their animal companions.
In recent years, Cannabidiol (CBD) products have become increasingly popular with pet owners as a replacement for both over-the-counter medicine and traditional prescription medication. Although much of the extract market is focused on products aimed at humans, there is a growing body of research to suggest that CBD can also promote well-being and help mitigate the effects of aging animals as well.
Reports from veterinarians and pet owners alike claim that CBD reduces tiredness and fatigue, balances behaviour, and keeps pets well-adjusted as they move into old age. Additionally, it's estimated that approximately 33 percent of dog owners—and 20 percent of cat owners—already use medicinal supplements for their pets.
It's no wonder that research conducted by the industry analytics firm, MJ Freeway, found that the American animal supplements market alone is already worth an estimated $690 million. And, this number is expected to increase by more than $150 million by 2023.
Many CBD producers have attempted to gain a first-mover advantage in cracking the highly lucrative pet product market, however thus far few have had success. In the US a number of companies have already been hit with warnings from the FDA, after discrepancies in product labelling and promised effects were discovered.
Creso Pharma Doggedly Pursues the European Market
Creso Pharma (ASX: CPH) is one of the first big competitors on the market to make a successful pot play in the pet supplement sector.
The company already has three Swiss complementary feed products for companion animals—known as anibidiol(R), anibidiol(R) 2.5 and anibidiol(R) 8—in distribution across the European Union.
The feed contains a full spectrum of hemp extract, including CBD, along with hemp seed oil, which is said to compliment the product's active herbal ingredients and Omega sources.
While the anibidiol supplement was first launched in Switzerland and then Liechtenstein, in November last year Creso signed off on an agreement with pharmaceutical giant Virbac, that will see the supplement commercialised in 15 additional European markets, including France, Germany, Italy, Norway, and Sweden. The company is hopeful that it's growing reputation in the European Union will eventually translate into further sales in new markets as its' expansion plans continue.
The co-founder and CEO of Creso Pharma, Dr Miri Halperin Wernli said that the deal will be highly beneficial for both companies, as it will allow them to lock down a larger portion of the growing animal healthcare market.
"Our experience in the market shows our veterinary products respond to a real need and have a positive effect on behavior in pets. In particular, senior dogs and cats benefit enormously as they are more likely to develop behavioral issues due to a combination of health issues and natural ageing issues including muscle and organ degeneration," Wernli said.
"This new agreement with Virbac sets a sound foundation for Creso Pharma to progress further into the international market."
Therabis has High Expectations for Australia
While Creso Pharma's pet supplement line is already in distribution across Europe, it is not yet available for purchase in Australia. However, one brand that already has a local early mover advantage is Therabis Australia, a subsidiary of the Denver-based cannabis juggernaut, Dixie Brands Inc (CNSX:DIXI.U).
Dixie Brands have ties to the Australian large-scale cannabis producer, Cann Group Limited (ASX:CAN), and following a successful American launch, it has begun expanding its' pet supplement range overseas. As part of this move, Dixie has appointed a new president of Therabis, the specialty pet food industry veteran, Bob Rubin.
"I am incredibly excited to join the Therabis team," Rubin said.
"As an executive in the pet food industry, I have followed the hemp-infused category with great interest. I believe that Therabis' formulas, developed by veterinarian Dr. Steven Katz, are the best and most effective in the market today."
The CEO of Dixie Brands, Chuck Smith, was equally enthusiastic about Therabis Australia's prospects for 2019, saying that the company's supplement has "tremendous potential as a product that can improve the quality of life for the pets which so many of us consider to be part of our families."
"We are very pleased to continue the national roll-out of the brand under Bob Rubin's leadership."
"Therabis is positioned for accelerated growth in 2019 as we broaden its distribution and continue to innovate with the introduction of feline and equine products, as well as ongoing additions to our existing canine line," Smith said.
At the same time, the company also managed to secure deals with several independent pet store chains located in Australian and New Zealand, such as Just For Pets and IndePet. The new arrangement will see the entire range of Therabis pet supplements distributed to approximately 75 stores across both countries.
The general manager of Therabis Australia, Lauchlan Grout, also claims that the company's range of hemp-based pet supplements are the first to be clinically trialed in Australia.
"The big thing with Therabis is that we are Australia's first hemp-based pet food supplement product that has had clinical trials conducted on it in a qualified veterinary University," Grout said.
"The other big thing is that we are 100 percent ethical. We get asked a lot "is our dog going to get high? Is he going to get the munchies?"
"The answer to that is no, your dog doesn't get high, there are no munchies. All we're doing is creating and designing a formula that activates the endocannabinoid system within the dog's body," he said.
Weed Be Good Together
Although there is still little in the way of official clinical testing when it comes to cannabis supplements, veterinarians and pet owners have already reported seeing significant results. And, while the jury is still out on the precise effects of CBD pet products, investors are becoming increasingly bullish about its' growing popularity.
As the movement to legalise cannabis continues to build momentum worldwide, the conversation around marijuana's medicinal properties will continue to gain legitimacy with doctors and legislators alike.
Luckily for investors, companies like Creso Pharma and Therabis are already well-positioned to capitalise on consumer's growing appetite for CBD-laced pet treats.
However, it's still uncertain who will emerge as the eventual leader of the pack.