Molson Coors Beverage Co (TAP)

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Breaking News: The Multi-Billion Dollar US and Canadian CBD-Infused Beverage Race is On: Tilray, Coca Cola, Molson Coors Brew...

Source: GlobeNewswire Inc.

OTCMarketsinsider.com News Commentary
2019 is poised to be a pivotal year for the cannabis-infused-beverage market. Investors seeking to profit from the early growth of this new opportunity have plenty of options to choose from.

Canaccord’s Bobby Burleson and Jonathan DeCourcey claimed that infused beverages could be poised to outpace general demand for marijuana products by two fold, taking 20% of the existing market for cannabis edibles by 2022.

Canadian cannabis company Tilray entered a $100 million joint venture with beer brewer AB InBev to study cannabis-based beverages. The joint venture, in which both companies will invest $50 million, will study non-alcoholic beverages containing THC, the psychoactive chemical compound in marijuana, as well as CBD, the non-active chemical.

Heineken also launched a JV in California's, the world's biggest marijuana market. In June 2018, Heineken subsidiary Lagunitas announced a partnership with cannabis company AbsoluteXtracts to market cannabis-infused sparkling water products under the brand name Hi-Fi Hops. The products became available to consumers in July 2018. One version of Hi-Fi Hops contains 10 mg of THC, while the other contains 5 mg of THC and 5 mg of CBD.

Coca-Cola Co. said it’s eyeing to enter the CBD market, becoming the latest beverage company to tap into surging demand for marijuana products as traditional sales slow. Coca-Cola says it’s monitoring the nascent industry and is interested in drinks infused with CBD.

Last August, Molson Coors entered into a joint venture with HEXO, a Quebec-based marijuana cultivator, to produce cannabis-infused beverages for the Canadian market. Canada legalized marijuana for all adults on October 17, though products like beverages, edibles, and vaporizers won't be available until the fall of 2019.

The CEO of Molson Coors is bullish on cannabis-infused beverages. During the company's third-quarter earnings call, CEO Mark Hunter said the cannabis market could total $7 billion to $10 billion in Canada alone. Nonalcoholic cannabis-infused beverages could account for as much as $3 billion, or 30% of the total market.

Mark Hunter said Molson Coors, through the joint venture, was "well-placed" to take a meaningful share of that market when it opens up. "We decided as a business that we did not want to be a spectator as this new market opened up," Hunter said. "And we clearly wanted to be a participant."

American Premium Water Corporation, a company with one foot already in the growing CBD beverage market with its LALPINA Hydro CBD water, announced in October that it developed a formulation using its proprietary Hydro-Nano technology for THC. In December it announced they had entered into an agreement with Growpacker, a California based company that does infusion and fulfilment in the CBD and cannabis sector. Growpacker has a number of relationships with dispensaries in the state, and provides the distribution network for the Company to sell into the US’s largest marijuana market.

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