The global CBD-infused beverage market is expected to jump from about $89 million to more than $1.4 billion just over the next three years, says Zenith Capital. By 2024, that number could soar to about $4.4 billion. Also, according to Grand View Research, infused drinks are already registering fast growth, with demand expected to surge between 2019 and 2025.
In addition, according to Benzinga, “In the North American market, where the legislative stance on CBD/hemp-infused drinks products is more clear and there is already an established user base in some regions, almost one in four adults expressed an interest in purchasing such cannabis-based drinks in the next 12 months.”
Better, according to Grand View Research, “The demand for THC infused cannabis beverages is majorly driven by rising product demand from adult consumers for recreational purposes. Rising demand for the therapeutic effects of the component along with the euphoria it provides is expected to bode well for the growth of the segment in the forthcoming years. CBD infused cannabis drinks registered the fastest growth in 2018.”
Demand Has Been Beneficial for CBD Beverage Companies
BevCanna Enterprises Inc. (CSE:BEV) (OTCQB:BVNNF) announced that its wholly owned direct to consumer e-commerce company, Pure Therapy, has achieved record sales since its acquisition by BevCanna in September 2020.
The direct-to-consumer e-commerce platform has continued its strong 2020 revenue growth into the first quarter of 2021, with extremely positive month-to-date revenues. The Company has continued to invest in strategic new product integration and customer acquisition, with a resulting projected run rate of approximately C$7.68M in revenue and positive EBITDA of C$.37M to date in 2021. The company has also acquired 3,270 new active customers since its acquisition by BevCanna.
“Our goal with the Pure Therapy acquisition was to quickly build a strong recurring revenue stream,” said John Campbell, Chief Strategic Officer for BevCanna. “We’ve stimulated revenue growth by adding new products, investing in customer acquisition and retention programs and leveraging the platform's current mix of subscription-based and traditional sales revenue models. We're very pleased with the progress that we've made towards a very strong 2021.”
“We also expect to both receive our Canadian Standard Processing Licence and close our landmark acquisition of Naturo Group, including $37M+ in assets, within the next few weeks,” continued Mr. Campbell. “We’re very excited to realize the diverse revenue streams and significant growth potential that the combination of these milestones represents.”
With respect to the previously announced transaction with Naturo Group, BevCanna announced that both parties are continuing to work together to complete all diligence investigations, have exchanged information and are working to complete all outstanding conditions to closing, certain of which have been satisfied. The transaction is expected to be completed by mid-February, 2021.
The Company intends to provide further updates as additional closing conditions are satisfied.
The coming together of these two emerging industry leaders is expected to create a comprehensive health and wellness beverage and natural products company, with proforma C$55M+ in assets on the balance sheet, and a multi-channel sales and distribution network positioned for robust growth.
“BevCanna and Naturo each bring a number of unique strengths to the combination, that together form an even stronger company.,” said Marcello Leone, Founder of Naturo and CEO of BevCanna. “BevCanna’s leadership in the cannabis-infused beverage sector and direct to consumer e-commerce business , together with Naturo’s innovative TRACE plant-based mineral beverages and supplements, significant manufacturing assets and extensive distribution network, will form the foundation of a unique, market-leading health and wellness company well positioned for long-term growth.”
The new BevCanna is expected to offer one of the most unique and diverse portfolios of beverage and wellness products within both the cannabis and the plant-based categories, and will expand BevCanna’s leadership position, becoming the only fully licensed, in-house and white-label beverage manufacturing company that distributes both conventional CPG and cannabis-based beverage and wellness products. The acquisition will provide access to global, multi-channel distribution networks of traditional and cannabis specific sales channels.
BevCanna will realize a number of key benefits from the acquisition, including:
- Creation of a “development to distribution” beverage manufacturing vertical for both traditional and cannabis-infused beverages and natural products.
- Direct ownership of a proprietary on-site natural alkaline spring water aquifer valued at C$18M. As water resources become increasingly scarce, the proprietary resource will contribute to a strengthened balance sheet and to BevCanna’s unique positioning within the exploding plant-based and cannabis sectors.
- An established and growing mass market distribution network of over 3,000 retail points, via Naturo’s market-leading TRACE plant-based mineral beverages and supplements. TRACE is sold across the country through Canadian retailers, with select international agreements and partnerships under review. Along with their nationally distributed alkaline and sparkling waters, and plant-based mineral beverages and supplements, TRACE is expanding its product selection and is incorporating additional nutraceuticals, including cannabinoids, adaptogens, and nootropics, into its products to be sold in domestic and international markets.
- TRACE’S proprietary Health Canada-approved plant-based fulvic and humic formulations – a category which is expanding exponentially across North America and globally.
- Naturo’s 315-acres of outdoor cultivatable land and 40,000 sq. ft. high-capacity beverage facility valued at C$10.4M, optimized for both traditional and cannabis-infused beverage manufacture, and beverage manufacturing equipment valued at C$3.4M (as of 2020 year-end).
- As per Naturo’s latest independent estimate pricing report as of January 2021, Naturo’s enterprise value is between C$37M-C$38M.
Other related developments from around the markets include:
Neptune Wellness Solutions Inc. (NASDAQ:NEPT)(TSX:NEPT), a diversified and fully integrated health and wellness company focused on natural, plant-based, sustainable and purpose-driven lifestyle brands, has announced Mood RingTM recreational cannabis products will be available for purchase — for the first time — this week in British Columbia. The Company marked Mood Ring's official entrance into the Canadian market with a virtual conference involving journalists from various media outlets, and key Neptune executives. “This is a landmark moment for Neptune as we embark on widespread distribution through-out the Canadian market,” said Michael Cammarata, Neptune's Chief Executive Office and President. “The Company's mission is to become the brand leader in cannabis and we have established a KPI program that we believe will deliver new and innovative SKUs for the next five successive quarters.
The Valens Company Inc. (TSX:VLNS)(OTC:VLNCF), a leading manufacturer of cannabis derivative products, announced that it has become an Associate Corporate Member of Food, Health & Consumer Products of Canada (FHCP), the largest voice of the Canadian food, beverage and consumer products industry representing small independently and privately-owned companies as well as large, global multinationals, all of whom manufacture and distribute safe and high-quality consumer packaged goods (CPG) in Canada. As the leading voice uniting companies, large and small, that provide access to the food, health, and consumer products that Canadians rely on every day, FHCP works to create a favourable business environment that allows its members to bring innovative products to market, promotes environmental stewardship, and standardizes product labelling so that Canadians have choices and ready access to world-leading safe and high-quality products.
HEXO Corp. (TSX:HEXO)(NYSE:HEXO) is pleased to announce the appointment of Rose Marie Gage to its Board of Directors. Following the appointment of Ms. Gage, the Board will comprise of seven directors. "We are pleased to welcome Rose Marie Gage to the HEXO Board," said Dr. Michael Munzar, Chair of the Board of Directors of HEXO. “Rose’s extensive experience with large multi-national companies, strategic execution and operational effectiveness will be invaluable as we continue to aggressively push to become EPS positive, increase market share across Canada and expand operations in the United States."
Canopy Growth Corporation (NASDAQ:CGC)(TSX:WEED) announced that it has entered into an arrangement agreement with its wholly-owned subsidiary The Tweed Tree Lot Inc., Canopy Rivers Inc. and its wholly-owned subsidiary Canopy Rivers Corporation pursuant to which Canopy Growth will acquire certain assets from CRC, as set out below, in exchange for cash, common shares in the capital of Canopy Growth and the surrender of all shares in the capital of Canopy Rivers held by Canopy Growth by way of a plan of arrangement under the Business Corporations Act (Ontario).
Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for BevCanna Enterprises Inc. by a third party. We own ZERO shares of BevCanna Enterprises Inc. Please click here for full disclaimer.
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