Macquarie Research recently hosted an event featuring beer guru Harry Schuhmacher, founder of Beer Business Daily; Emily Pennington, editor of Wine & Spirits Daily; and Harrison Phillips, cannabis industry financial advisor.
Among the topics the panel discussed: the potential for cannabis disruption in the beverage industry and elsewhere.
Investors concerned about the potential market impact of legalized cannabis can simply look at which companies are campaigning hardest against legalization, Phillips said. The three biggest potential losers are pharmaceutical industry, the prison industry and the tobacco industry, he said.
Cannabis And Beverages
For the beverage industry, Harrison sees cannabis as eventually becoming “just another ingredient” and said product differentiation and branding are the keys to value creation.
The main potential obstacle for cannabis-infused beverages may be the price, which currently runs at about $10 per can of Two Roots cannabis-infused beer.
Harrison said cannabis enthusiasts and investors shouldn’t expect any progress on legalization to happen at the U.S. federal level until at least 2020, and the rollout of new laws and regulations might not be complete until five years from now.
The enthusiasm among beverage companies for cannabis investments will likely continue to inspire consolidation and additional partnerships, according to Macquarie.
Constellation Brands, Inc. STZ overpaid for its 38-percent stake in Canopy Growth Corp CGC, which reached a peak market valuation of about $20 billion in a Canadian cannabis market that's valued at only about $8 billion to $10 billion, Harrison said.
After Canadian cannabis legalization in mid-October, the ETF MANAGERS TR/TIERRA XP LATIN AME MJ is down 9.5 percent in the past month.
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