Canopy/Constellation will dominate CBD beverage market soon. With their plans to spend 500 million dollars in the U.S. to grow and manage one of the largest hemp productions, plus their announcement today to hire hundreds of U.S. people for their operations, the smaller companies should be afraid.
Not only do they just plan to enter the market here, they are working with senators and the state of New York to build a hemp industrial park. People are already saying it will become the silicon valley of the hemp world.
So let's talk about the CBD beverage market in general. One of the main reasons Constellation brands(makers of Corona, Modelo and many others) got involved and invested over 4 billion dollars into Canopy, was because they are mainly interested in developing CDB infused beverages. As a beer, wine and hard liquor manufacturer, they have the facilities already in place to crank out massive volumes of any type of beverage they want to bottle or can.
Canopy meanwhile has already stated that they would be willing to invest even more into hemp if the U.S. market demand keeps rising over the next few years. There is no reason to think it won't now that the farm bill passed. In my opinion the U.S. has barely dipped their toe into the CBD and hemp markets and the room for growth is MASSIVE! Wall street already agrees that CBD infused beverages are looking to be the next big thing in the health market.
We already know other beer and spirit makers are investigating the CBD market and watching closely. As are other beverage makers like Coca-cola. It's a matter of time before more large players jump on board and what better place to look to than a newly developed Hemp Business Park in New York.(silicon valley of hemp?)
Constellation brands also has the distribution already in place worldwide for beverages. In the U.S., shelf space is very hard to attain in big chain retailers and this advantage alone is why Canopy and Constellation together will dominate the market if it takes off.
Canopy Advantages:
Grow licenses for hemp in the U.S.
State of the art grow facilities around the world if needed
Research and development teams consisting of some of the top hemp and marijuana scientists to maximize CBD oil in any way possible
Deep pockets and cash reserves if more investment is needed
Constellation Brands Advantages:
Experts in beverage design and manufacturing
Huge beverage production warehouses already set up and running
Distribution trucks and shipping worldwide network already in place
Shelf space deals at major retailers already in place
Deep pockets if more investment is needed
These 2 companies with their partnership will dominate and put many smaller individuals out of business. At the same time, they might use some of that big money to acquire smaller brands to gain footholds in other areas of the U.S.
I think they could buyout a company like Puration very easily if they so desired. I don't think that would happen soon as they are just getting their U.S. operations off the ground and that will take some time. They will want to get their facilities up and running and employees hired before they begin their trek to domination.
I'm also not saying they would try to acquire Pura, just that they could if they desired. I have no idea if it would be a good strategy for them or not. I'm assuming they are interested in non alcoholic beverages as well as alcoholic but we will see.
This is all just my opinions, take what I say with a grain of salt. My Pura stock is what I consider near worthless but with so many shares for such little investment, I'll hold on. If they go bankrupt then I'll use the loss to offset gains for tax purposes on other stocks. If they take off or make some other big deal, then I'll take my profits and laugh all the way to the bank. Either way I'm good!
