Upcoming Canadian Consumables Market Expected This Fall: Beer and Cannabis Combine (CSE: $SPR.C) (OTCQB: $SRUTF) (NYSE: $CGC) (TSXV: $BEER) (NYSE: $HEXO)
Point Roberts, WA and Delta, BC - May 1, 2019 (Investorideas.com Newswire) Investorideas.com, a leading investor news resource covering hemp and cannabis stocks releases a snapshot looking at cannabis-infused beer JV's and distribution partnerships as they ready themselves for the upcoming Canadian consumables market, as regulations are expected to permit this October.
Recently one of the largest cannabis beverage partnerships involving Canopy Growth Corp. (NYSE:CGC) (TSX: WEED) and Constellation Brands, Inc. announced that they have agreed to make some changes to various warrants and rights.
The new agreement to change some of the warrants and rights that influence their partnership is believed to have been influenced by Canopy's plans to acquire Acreage Holdings Inc. Another key factor that influenced the decision by Constellation Brands and Canopy Growth to review the warrants and rights is the chance of cannabis legalization by the federal government.
The attention surrounding cannabis-infused beers is bringing in new players such as Sproutly Canada, Inc. (CSE: SPR) (OTCQB: SRUTF), and Moosehead Breweries Limited, who just announced that they have entered into a definitive agreement to form an exclusive joint venture to develop, produce, and market cannabis-infused beverages in Canada using Sproutly's acquired proprietary, naturally produced water-soluble cannabinoids known as Infuz2O.
Moosehead, the oldest and largest Independent Beer Company in Canada, brings over 152 years of beverage experience in building and operating adult beverage businesses in Canada, an established national supply chain and distribution capabilities in all provinces with a large sales and marketing team and the Oland family's proven ability in building and marketing industry leading adult beverage brands such as Moosehead and licensed and supporting brands such as Alexander Keith's, Angry Orchard and Twisted Tea.
Sproutly's Infuz2O can deliver the cannabis effect within 5 minutes and last up to 90 minutes, providing a similar experience timeframe to beer, while also producing a clear cannabis beverage that is much easier and faster to formulate than many of its competitors who will be using emulsifiers, encapsulation or chemically modified techniques to strangely mirror solubility.
"With the anticipated legalization of edibles in Canada later this year, Moosehead has made the strategic decision to enter the cannabis beverage market. As one of the oldest brands in Canada and a leader in the beer category, we believe we are uniquely positioned to be a leader in the cannabis beverage category." said Andrew Oland, Chief Executive Officer of Moosehead. "As a 152 year old company spanning six generations, we are very selective about new business opportunities. After a significant amount of due diligence on Sproutly's APP technology and Infuz2O water soluble cannabinoids vs other competitive technologies, we are excited to announce this joint venture. With their advanced technology and our long-standing product development experience, we expect to bring to Canadian consumers cannabis beverages that address the major issues currently limiting appeal of this category in other markets; a beverage that: 1) actually tastes good; and 2) provides an immediate and controllable cannabis experience lasting up to 90 minutes."
"After careful analysis of the cannabis industry and the cannabis beverage opportunity in Canada, we believe that Moosehead and Sproutly together are well positioned to become a significant player in the category." said Matthew Oland, incoming Chief Executive Officer of the Joint Venture. "The JV's ability to leverage Moosehead's rich history of building adult-beverage brands, and its established R&D and operational infrastructure, will enable the JV to bring great tasting cannabis beverages to Canadian consumers. The Infuz20 technology delivers a natural cannabis beverage experience, with an onset and offset time similar to traditional flower cannabis, without the need for chemical modification. We believe this will be a game changer for the sector."
Lexaria Bioscience Corp., who develops and licenses DehydraTECH, a patented lipid nutrient infusion technology that improves taste, rapidity, and delivery of bioactive compounds that include cannabinoids, vitamins, NSAIDs, nicotine, and other molecules, has also been looking into the beverage sector for quite some time, having partnered with Hill Street Beverage Company Inc. (TSX-V:BEER) (OTC: HSEEF)
Hill Street CEO Terry Donnelly recently discussed the company's first quarter which showed the company's revenue was up 100 percent YOY and the company is tracking 35 percent annual revenue growth for 2019. Donnelly also discussed how Hill Street has used its line of non-alcoholic beer and wine to drive its brand recognition ahead of the legalization of infused beverages in the fall. Hill Street uses Lexaria's DehydraTECH to create infused beverages which allows for 5 to 10 percent greater availability of THC and ensures consumers feel the beverage's full effect in 15 minutes.
A sleeping giant in this same sector that is surrounded by market anticipation is Truss, the JV of Molson Coors Canada, the Canadian business unit of Molson Coors Brewing Company, and HEXO Corp. (NYSE: HEXO) (TSX: HEXO) who announced their partnership back in August 1, 2018, to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization.
"With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running," said Brett Vye, Chief Executive Officer at Truss. "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. Why "Truss"? We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future."
This combination of experienced beverage providers with cannabis technology companies allows for all of these companies to have the best of both worlds. As these JV's ready themselves for October the only big question is what the finalized regulations will permit and how these companies may have to alter their approach to match them.
For investors following cannabis stocks, Investor Ideas has created a stock directory of publicly traded CSE, TSX, TSXV, OTC, NASDAQ, NYSE, ASX Marijuana/Hemp Stocks
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