Canada's Edibles, Beverages, and Concentrates Market is an Untapped Goldmine
Ever since "Legalization 2.0" was first announced, investors have been looking to it as a fulfillment of the long-promised pot gold rush. As of December 17, consumable pot products can be bought and sold on shelves across Canada and, as such, the industry is undergoing a significant disruption. According to Deloitte, the Canadian market for pot edibles and beverages will be worth $2.7 billion annually, and many of the biggest companies have been scrambling to gain access to that value. Because consumables are an entirely new market, they represent an exciting opportunity for retailers to distinguish themselves, and for investors to separate the minor league pot players from the major league ones. Companies that can take advantage of this exciting sector--such as BevCanna Enterprises Inc. (CNSX:BEV.CN) (OTCPK:BVNNF) (FRA:7BC), Canopy Growth Corporation (TSX:WEED.TO) (NYSE:CGC), Cronos Group (TSX:CRON.TO) (NASDAQ:CRON), Aurora Cannabis Inc. (TSX:ACB.TO) (NYSE:ACB), and HEXO Corp. (TSX:HEXO.TO) (NYSE:HEXO) - deserve to have investors' attention, as they stand atop an untapped goldmine in the still burgeoning pot industry.
BevCanna's Market-Leading Portfolio
Perhaps no company has prepared itself for Canada's consumables market better than BevCanna Enterprises Inc. (CNSX:BEV.CN) (OTCPK:BVNNF) (FRA:7BC), a developer and manufacturer of pot-infused drinks and premium consumer goods. The company's goal is to become the global leader in pot beverages, and it has already made significant progress towards that result.
The BC-based BevCanna is currently readying for the launch its two announced product lines, Anarchist Mountain Beverages and Grüv Beverage. Anarchist Mountain is a THC-dominant, sparkling spring water beverage line with botanical flavor, while the Grüv line encompasses a wide range of easy-to-drink iced tea beverages with a balanced CBD and THC profile.
The company is also in "the final development stage for a third product line that will be the catalyst for the launch of the company's water-soluble powder beverage line in California," according to its most recent corporate update. This is likely THC-dominant Jase beverage mix, which, according to the company, will embody the "endless summer" sun of California combined with a vibrant hedonism for a bold and confident profile.
In addition to its own premium beverage brands, BevCanna Enterprises Inc. (BEV.CN - BVNNF.PK) (FRA:7BC) has been diversifying its operations through strategic partnerships. On October 3, the company entered into a definitive agreement with Higharchy Ventures to offer a portfolio of green beverage brands that will be distributed throughout Canada via Higharchy's retail cannabis network. As part of this brand launch, the company will create a retail training program that will educate store staff on the infused beverage category and responsible consumption.
That same month, BevCanna entered into a letter of intent (LOI) to partner with Capna Intellectual Inc., a high-profile pot company based in Los Angeles. BevCanna will manufacture the company's vape brand, Bloom, as well as the brands concentrates and extracts, for sale in Canada. The popular Bloom brand is currently on shelves in four states--California, Nevada, New Mexico, and Washington--and is available in more than 210 dispensaries in California alone.
BevCanna is also acquiring the exclusive licensing and manufacturing rights to select product formats, technology, and branding assets belonging to Bloom. The company plans to leverage Bloom's extensive distribution network for its own, in-house brands.
Other Leaders of the New Consumables Market
Standing beside BevCanna Enterprises Inc. (BEV.CN - BVNNF.PK) on the goldmine of newly legal consumable products are a handful of the biggest operators in the pot industry.
Canopy Growth Corporation (TSX:WEED.TO) (NYSE:CGC), for example, recently unveiled its edibles line-up, which includes both pot-infused chocolates and beverages. Through a partnership with Hummingbird Chocolate, Canopy Growth will be offering Bean & Bud, a premium 70% dark chocolate that contains two medallions per package with 5 mg of THC each. Then, through a partnership with Seth Rogen and Evan Goldberg, Canopy Growth will be launching the brands Houseplant Grapefruit and Houseplant Lemon, both containing 2.5 mg of THC per 355mL can.
Like Canopy, Cronos Group (TSX:CRON.TO) (NASDAQ:CRON) is also entering into a number of joint ventures with different partners to improve its manufacturing and supply chain capabilities for Legalization 2.0. The most promising of these JVs was born in May, when the company entered into a $30 million multi-year private label concentrate supply agreement with MediPharm Labs. Labs will manufacture pot-filled vaporizer devices for Cronos Group's COVE brand over the next 18 months.
Another one of Canada's biggest pot companies, Aurora Cannabis Inc. (TSX:ACB.TO) (NYSE:ACB) announced its plans to expand into the edibles market back in June. It has entered into a partnership with PAX Labs to advance its vape products business. It has also opened up a 20,000 square foot manufacturing facility called "Aurora Air" that--along with another facility called "Polaris"-- will be responsible for edible products such as mints, gummies, and chocolates.
Finally, at the end of October, Quebec-based pot producer HEXO Corp. (TSX:HEXO.TO) (NYSE:HEXO) received a license from Health Canada for retail of pot-infused topicals, extracts, edibles and beverages from its cultivation, harvesting, and production facility in Gatineau. It is also opting to conduct additional research on the safety of vape pens before it retails them, in order to ensure it provides only the most reliable products to Canadian consumers.
Legalization 2.0 and the Future of the Industry
By offering premium consumer products for both in-house brands and white label clients, BevCanna Enterprises Inc. (BEV.CN - BVNNF.PK) is ensuring it can maximize its share of the newly legal market. Additionally, the JV with Bloom ensures that BevCanna won't miss out on Canada's highly lucrative vape space while maintaining its core competency in infused beverage manufacturing and branding.
But more than that, there's plenty of reason to believe that the Canadian market is just the beginning. According to Zion Research, the global market value of pot-infused drinks is going to explode from $1.6 billion last year to $4.5 billion in 2025. The entire market, including edibles and concentrates, could be worth as much as $11.5 billion.
More than any other company in the industry, BevCanna Enterprises Inc. (BEV.CN - BVNNF.PK) is poised to tap into this new market. The company, along with its peers, will be hard at work over the next year to realize their full potential, meaning investors should be watching these stocks very closely.
For a free research report on BevCanna Enterprises Inc. (CNSX:BEV.CN) (OTC:BVNNF) (FRA:7BC) visit microsmallcap.com.
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