Cannabis and Beverages: #CBD Beverages to Become $260 million market by 2022: Sproutly (CSE: $SPR.C) (OTCQB: $SRUTF), Hexo (TSX: $HEXO.TO, OTC: $HYYDF), The Green Organic Dutchman (TSX: $TGOD.TO), (OTC: $TGODF)
Point Roberts, WA - November 9, 2018 (Investorideas.com Newswire) Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks releases a sector snapshot with a focus on the growing interest in cannabis infused beverages and water soluble cannabis solutions.
Cannabis may have been federally legalized for recreational use in Canada this fall but many cannabis companies are looking a year into the future at the next big step in the market; October 17th of 2019 when edibles, oils and infused beverage products can join the Canadian recreational market.
How big is the opportunity? A recent Business Insider news article reported, "The marijuana-infused beverages could become a $600 million market in the US in the next four years. Canaccord estimates CBD beverages will become a $260 million market by 2022, and THC-infused beverages a $340 million market."
Sproutly Canada, Inc. (CSE: SPR), (OTC: SRUTF) is looking to capitalize on this opportunity, announcing today that it has completed the development and formulation of an initial portfolio of functional beverages with its proprietary naturally water soluble cannabinoids ("Infuz2O").
From the news: "The beverages combine recently licensed rights for the proprietary water soluble mineral platform ("MiST Platform") with Infuz20. The initial portfolio consists of three separate cannabis / hemp infused beverages that provide the following functions: a) Focused Energy; b) Stress relief and Relaxation; and, c) Restful sleep support."
"The Company is currently in the midst of medicinal and adult-use brand development, including its functional beverage line. The initial beverages will be ready for consumers if and when Health Canada allows consumer beverage products to be legal for sale."
From the news: "The focus of the Company has been to develop beverages that will distinguish our functional beverages from cannabis/ hemp beverages developed by our competitors. Our competitive advantage is to leverage the suite of proprietary water soluble technologies we have acquired, and create a line of consumer products that taste great and have a functional purpose", said Keith Dolo, Chief Executive Officer. "Our beverages not only cater to the emerging cannabis market but also to the large, functional beverage market that exists today", he added.
Sproutly went on to say, "The functional beverage category is increasingly becoming the popular choice among consumers who are seeking low-calorie, nutrient-dense options as a healthy alternative to traditional beverages. The global functional beverage market is expected to grow at a CAGR of 6.1% to US$93.68 billion by 2019, according to a new study by Grand View Research, Inc. Cannabis in its own right has a long history of being used as a way for users to address wellness and lifestyle needs. Sproutly's functional beverage formulations address major and growing consumer health and wellness needs for the modern lifestyle."
Looking at competitors, big players are following the money in this sector. On October 1st another cannabis beverage announcement came from Molson Coors Canada, the Canadian business unit of Molson Coors Brewing Company, and HEXO Corp. (TSX: HEXO, OTC:HYYDF) regarding the closing of the transaction announced on August 1, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer.
Vye said, "When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer."
A Business Insider article last week reported that CEO of Molson Coors, Mark Hunter said "The cannabis market could total $7 billion to $10 billion in Canada alone, of which nonalcoholic cannabis-infused beverages could account for as much as $3 billion, or 30% of the total market."
Sproutly Canada, Inc. has been setting up to enter the beverage space previous to today's news with the company announcing in August that it had completed the acquisition of all of the issued and outstanding shares of Infusion Biosciences Canada Inc. and SSM Partners Inc.
From the news: "We are extremely excited to finalize this Acquisition, enabling Sproutly to commercialize the APP Technology in major regulated markets around the world with innovative cannabis products that target the $50+ billion bottled water and functional beverage market with naturally water soluble molecules from cannabis and hemp", commented Keith Dolo, Chief Executive Officer of Sproutly."
What separates Sproutly and Infusion Biosciences from other cannabis beverage technologies? In a phrase; water oluble, as referenced in today's news by Keith Dolo, CEO.
This may put Sproutly in a league of their own with regards to their technology but other cannabis companies have been eyeing the beverage sector of the market. But as Dole noted, he is confident he can separate his company from the pack.
Not to be left out, The Green Organic Dutchman Holdings Ltd. (TSX: TGOD), (OTC: TGODF) also entered the space announcing, back in June of this year, the launch of a global division focused on the beverage industry.
From the news: "The Green Organic Dutchman Beverage Division will utilize its experience to provide a strategic pathway into the cannabis market for large-scale beverage companies by way of direct investment, joint venture or other suitable opportunities."
Continued: "The focus will be to create industry-leading branded products, and to supply organic base ingredients for use in global beverage brands. Similarities between the cannabis sector, beverage, beverage alcohol and consumer packaged goods industries are apparent. "
As the cannabis market continues its growth curve and legalization allows for more cannabis alternatives, cannabis infused beverages will dramatically change and increase the size of the beverage market of the future.
Technology is key to who gets market share, making it an interesting race for investors to watch.
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