Huntington Coast Capital acted as the placement agent for a purchase order financing request for a client in the CBD industry. The purchase order financing facility will greatly assist the company in expanding its market. The new supply chain financing will allow the company to expand their sales from $20,000 per month to more than $500,000 per month!
The CBD market has been on the rise in recent years. According to Global News Wire – The global CBD oil and CBD consumer health market size is expected to reach USD 123.2 billion by 2027, expanding at a CAGR of 25.6% over the forecast period.
Growing buyer awareness regarding various health benefits offered by cannabidiol (CBD) and increasing legalization of cannabidiol oil and infused products is contributing towards the adoption of cannabidiol as a consumer health product, thereby positively impacting the market growth. Furthermore, changing buyer perception and attitude towards hemp-derived cannabidiol-based products is further bolstering revenue growth over the forecast period (full article).
Huntington Coast Capital’s partners in the space facilitate the growth of many CBD wholesalers and distributors. They do this by providing the much needed supply chain financing and factoring services necessary to facilitate orders and meet demand.
Our client currently has domestic partners formed with distribution in Texas and a lab in Colorado. All products are tested and approved according to industry guidelines. Operations to this date have been internally financed and limited due to available cash on hand. Companies starting out in any industry typically start with their own money. If the company is successful, they quickly run out of their own resources and need to find a capital partner to continue to expand. This is the best problem a company can have, but stressful none-the-less.
Supply chain financing and purchase order financing (there are slight differences) meet this need by paying suppliers directly. By financing the cost of goods, our clients are able focus on building customer relations and not worry about the capacity to fill orders.
If your CBD business could benefit from purchase order financing, we would like to hear from you. Call us direct at 714-719-8966.