CannTrust Holdings Inc. (NYSE:CTST) Exploits Rising Demand For Oil-Based Cannabis Products By Launching New Formulations

As the cannabis market continues to entrench itself, the consumers are beginning to develop new tastes. One of the preference that is gaining popularity is for oil-based cannabis products and

CannTrust Holdings Inc. (NYSE:CTST) is already taking steps to tap into the market.

The company launched high dosage CBD products

In a recent news release, the company revealed the launch of new extract formulations. The three formulations exploit the increasing need by medical cannabis patients for products with high cannabis concentration. As per the company, there is an unmet need in the medical cannabis oil niche as demand expands.

The new formulations include CBD capsules which contain a very high dose of the substance yet. Notably, each capsule contains 25mg of CBD. The other product is CBD drops which also contain a high dose of CBD. A single milligram of the CBD drops contains 50mg of CBD. However, the third product formulation contains low CBD where one capsule carries 2.5mg of CBD and 2.5mg of THC on a ratio of one to one.

According to the company statement, the products are already on the shelves and users can order them from the company website. Further, the addition of the three product formulation takes the total count of CannTrust’s products to nine.

Revenue growth is not enough to counter the slow start this year

So far, the company is doing well in terms of sales. During Q4 FY2018, the company sold 3,707 liters of medical cannabis oil to its customers. Notably, the sale amount makes up 27% of the medical cannabis market share in Canada, according to data from Health Canada. As per the company’s CEO, Mr. Peter Aceto, the launch of the new products is a testimony of their strategy of prioritizing of the market.

While the company is experiencing revenue growth, CannTrust is experiencing a slow start in 2019. As per the Q4 FY2018 earnings results, the firm made sales worth $16.2 million where recreational sales made up $10 million and medical sales took the remaining $6 million share. However, increased inefficiencies and ramp-up expenses saw gross margin falling from 69% in Q3 FY2018 to 35% in Q4.

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