eResearch | Since Canada approved the sale of cannabis derivatives late last year, the high-margin cannabis beverage market quickly grew with the introduction of new products and brands, and an increase in M&A, financings, and other deals.
According to a recent report by Grand View Research, the global cannabis beverage market, including non-alcoholic beverages infused with THC or CBD, is expected to reach US$2.8 billion by 2025, growing at a CAGR of 18%.
Traditional beverage companies such as Constellation Brands, Inc. (NYSE: STZ) and Molson Coors Beverage Co. (NYSE: TAP), quickly entered the cannabis-infused beverage market through partnerships with major Canadian cannabis producers Canopy Growth Corp. (TSX: WEED) and Hexo Corp. (TSX: HEXO), respectively.
However, Waterloo Brewing Ltd. (TSX: WBR), Ontario’s largest Canadian owned brewery, recently announced a suspension on its plans towards developing a cannabis-infused beverage line, deciding to focus on its current line of alcoholic beverages rather than risking expansion into markets in which it had less expertise.
Financings
Last month, Lexaria Bioscience Corp. (CSE: LXX), a developer of drug delivery technologies, announced a US$2 million private placement, to be used towards completing human pilot studies researching the effectiveness of its DehydraTECH delivery platform against COVID-19 and other infectious diseases.
BevCanna Enterprises Inc. (CSE: BEV) recently announced a C$300,000 non-brokered private placement, in addition to closing C$630,000 from the first tranche of a previously announced secured convertible debenture financing.
Hill Street Beverage Company Inc. (CSE: BEER), a producer of non-alcoholic beverages, recently announced a C$1.0 million non-brokered private placement, to be used towards preparation of the launch of its cannabis-infused product line, developed in partnership with Lexaria Bioscience.
M&A and Other Deals
Last week, BevCanna announced the acquisition of Exceler Holdings Ltd. in exchange for 2 million BevCanna shares, which will provide BevCanna access to distribution opportunities in Europe and Asia for cannabis-infused beverages.
BevCanna leveraged its recently created joint venture with European distributor Mota Ventures, who has an extensive distribution network in Europe, to facilitate the acquisition of Exceler Holdings.
Last month, BevCanna expanded its reach into eastern Canada as it announced a distribution agreement with Argentia Gold Corp., a licensed producer who will exclusively represent BevCanna’s product lines in Newfoundland, PEI, and New Brunswick.
Argentia Gold Corp. also recently announced a partnership with Jack N Jane Essential Inc., a wholly owned subsidiary of The Yield Growth Corp. (CSE: BOSS), to sell Jack N Jane Essential’s 35 products in Canada over a 2-year term.
Tinley Beverage Company Inc. (CSE: TNY), a Canada-based cannabis beverage producer, recently announced an exclusive distribution partnership with Shelf Life Distributing, who will sell Tinley’s full line of beverage products across licensed dispensaries and home delivery services across California.
New Products & Brands
This week, THC BioMed Intl Ltd. (CSE: THC), a cannabis producer and researcher, launched its new cannabis-infused beverage, THC Kiss, a product developed through its proprietary extraction technology, which sold out within a couple of hours on the B.C. Cannabis Store website.
BevCanna, a manufacturer of cannabis-infused beverages, recently announced the development of a new hemp derived CBD-infused beverage under its Lev brand, which is expected to provide immune-supporting functions.
Once BevCanna finalizes tests for its new Lev product, the beverage is expected to launch in the U.S. this year, followed by Canada upon regulatory approvals.
In addition to Lev, BevCanna also recently announced the launch of its new recreational brand Jase, a ready-to-mix-single-serve powder which allows consumers to make their own cannabis-infused beverages.
Jase is expected to launch sales this year in California dispensaries, which will be available in boxes with 10 servings of 10mg pomegranate lemonade flavored pouches.
Cannabis Beverage Market in 2020
As cannabis beverages are still only reaching the halfway point for its first year of sales in Canada, it will be interesting to see if cannabis companies maintain sales growth for beverage products in Q2/2020.
One of the key drivers for growth will be the social acceptance of cannabis infused beverages.
Once a full year of cannabis infused product sales is captured, there will be a much clearer picture of the impact made on the industry.
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