The CBD marketplace has been the recipient of some of the most gawdy growth estimates of any area of the market over the past year, and one stock that may start to look increasingly interesting in the current environment on that basis is One Step Vending Corp (OTCMKTS:KOSK). It’s a unique opportunity, and we are going to talk about why.
KOSK has moved into a market space where it appears to have basically no competition: CBD vending machines. There’s a basic pie chart you can construct in your mind, and it is being heavily impacted by the COVID-19 outbreak: some people want to buy CBD products in stores at checkout counters, some people want to order it online and have it shipped. But we believe a new and important niche is primed for massive expansion in the current environment: the ability to get CBD right away without having to navigate through a crowded store and deal with a checkout counter. That’s the vending machine niche. And KOSK may be the only publicly traded company positioned to benefit.
One Step Vending Corp (OTCMKTS:KOSK) develops, manufactures, and services micro market kiosks for corporations and businesses to provide packaged snacks and beverages along with customer loyalty solutions in the United States. The company moved this business in the direction of the CBD marketplace last year, but has only recently hinted through website imagery at a full launch with fully labeled products, which was a hang-up.
We also know that company recently added a new board member with a history of advising on acquisitions and other core parts of the operational path ahead, which could include regulatory advances.
All of that suggests the stock could be a major sleeper pick right now for speculative interest.
The Mainstreaming Factor
The most important dimension for this process is the fact that the CBD market overall is undergoing what is best termed “mainstreaming”. The data on this dynamic has been very clear. Experts now project the industry is somewhere in the process of expanding from a small, niche, $50 million dollar global business to something very different: a huge, “everyday” household product market worth $20-40 billion globally.
Right now, we are likely somewhere about $3 billion in size, with 120-plus percent CAGR defining the glide path for years and years out into the future. This is according to folks like Brightfield Group, MRFR, and other core industry analysts with domain-specific expertise.
Mainstreaming is the result of new adopters entering the marketplace. This type of growth holds the potential to be more dramatic than growth based on marginal fluctuations in numbers of consumers and increases in use per consumer. This is effectively the process of the birth of a major new household product market for millions of new people.
And it’s seeded by several factors, most important of which is visibility – which has been jumping fast for CBD, given that it can now be seen on the shelves of pharmacies, convenience stores, and grocery stores, as well as in malls across the country. That process is like free marketing of the best kind and helps to push the rapid growth we are seeing across this space.
As we see it, normalizing around the vending machine model in the CBD market is not remotely far-fetched, especially during the next 4-6 quarters, when we will likely be faced with some behavioral impact from COVID-19. That would put KOSK in the drivers’ seat as a leadership player in the space throughout that coming growth curve.
The market may already be sniffing that out, with the stock up as much as 200% in the past few weeks. But that’s nothing compared to what’s possible here if the company delivers on the conceptual potential that appears to be in place.