Beverage Giants Backing a Cannabis Boom

Loading...
Loading...

Beverage Giants Backing a Cannabis Boom

FN Media Group Presents Safehaven.com Market Commentary

PR Newswire

LONDON, October 4, 2018 /PRNewswire/ --

The billion-dollar beverage giants have set their eyes on an entirely new industry, an industry that they fear will soon swallow them up if they don't get ahead of it. In a matter of days, Canada will legalize recreational marijuana-and it will be the staging ground for other parts of the world. Mentioned in today's commentary includes: Canopy Growth Corporation CGC, Constellation Brands, Inc. STZ, Zynerba Pharmaceuticals, Inc. ZYNE, Molson Coors Brewing Company TAP, Namaste Technologies Inc. NXTTF.

The highest estimates have global legal cannabis sales reaching nearly $146 billion by 2025. With recreational pot in Canada, the legal recreational sales bonanza is beginning.

As the hype around this up and coming sector grows, the beverage industry is now scrambling to get on board with a string of mega-deals. Cannabis has finally won over the grizzliest of bears and the most skeptical short-sellers, and it is all looking up from here.

Three deals in particular are creating the perfect environment for investors.

And with that in mind, here are 5 stocks that cover pretty much anyone's investment strategy, whether investors want to try to make big bucks on this rampage, or play it safe with a fundamentally strong beverage company that's getting in on this game …

#1 Coca-Cola 

Coke just validated cannabis. If even Coca-Cola thinks the cannabis market has "incredible potential"-then it does. While Coke's September 18th announcement that it was "closely watching" the cannabis market and considering marijuana-infused wellness drinks doesn't compare to the $4 billion another beverage-maker pumped into a grower, it is still a very big deal.

If Coke moves forward with this, it would likely consider CBD-a non-psychoactive component in marijuana for an infused drink that could ease symptoms of inflammation, pain and nausea.

For Canada's Aurora Cannabis, it was yet another nice boost, because rumor has it that Coca-Cola is in talks with this company. And it's lost on no-one that if Coke starts dabbling in pot, it will be an easier ride-plus, they've got the entire Canadian market to experiment on, with recreational legalization just days away. Canada would be the staging ground for the rest of North America.

#2 Scythian Biosciences (SCYB, SCCYF)

Scythian Biosciences, a little-known cannabis incubator, just closed a deal with Aphria, one of the few cannabis majors in the world.

Aphria gave Scythian 15.7 million shares of stock to incubate cannabis assets, right before the first pot rampage exploded. That's a 6.3 percent share in arguably the strongest cannabis producer in the world-and it also makes Scythian the largest single Aphria shareholder.

When the deal was agreed upon, those shares were trading at CAD $12, worth $193 million.  At the time the deal was closed, Aphria shares were trading at CAD $17.78, making Scythian's position worth over CAD $278 million.

Right now, the market is paying attention to Aphria because the deal gave it "access to world-class assets" in the "most advanced regulatory jurisdictions across LATAM and Caribbean markets", according to Forbes. And while the market is busy looking at Aphria, Scythian -a very smart and sophisticated incubator of cannabis assets-is stuffing its war chest full of Aphria shares soon convertible to cash.

The market is starting to find out that the incubator is where it's at. And when they do, more good things could happen.  

This deal should put little-known Scythian Biosciences on the cannabis map-in a very dramatic way. It may be the best kept secret in the cannabis sector. But there's another big potential catalyst coming, too-in a matter of days or weeks, Scythian is looking to acquire an exclusive medical cannabis license in Florida. Ahead of that licensing, Scythian took a controlling interest in 3 Boys Farms LLC-an established Florida medical cannabis company and primary care medical organization.

The U.S. legal cannabis market size was estimated at over $7 billion in 2016. And it's expected to grow at a CAGR of 24.9 percent from 2017 to 2025.

What most people don't understand about this market is that incubator funding isn't coming from Silicon Valley …or Wall Street... It's coming from publicly traded companies acting as incubators, like Scythian Biosciences.

Scythian is a credible international incubator. It's also the world's first global cannabis incubator, and they've already made some game-changing deals.

#3 Diageo Plc  

Diageo was the third major alcoholic beverage company to focus on pot. It's the maker of Guinness beer, Smirnoff vodka and Johnny Walker, and it's already been in talks with at least three Canadian marijuana growers. It wants a piece of the action quite desperately.

The speculation so far centers on Aphria (again), Tilray and Aurora Cannabis. Aphria seems to have the advantage because it's market cap is lower than that other two-considerably.

The Trefis price estimate for Diageo in the last week of August was $157-that's about a $20 upside from the current price of $138.50. And Trefis' price estimate is based on this positive outlook:

1) $17.2 Bil revenue in FY 2019
2) $4.2 Bil net income in FY 2019
3) P/E Multiple of 23.3
4) Average share count of 621 Mil

#4 Canopy Growth CGC

Canopy Growth has been the biggest cannabis stock on the market for some time, though in terms of market cap, it was just overtaken by Tilray, which has seen an 800 percent gain since its July IPO.


General market rampage aside, the biggest new catalyst here is the approval Canopy just won for its remaining greenhouse space at Tweed Farms, which expands its licensed footprint to around 3.2 million square feet.

For growers right now, it's all about expanding capacity. Canopy's Canadian platform is now 57 percent licenses "with the balance under aggressive development towards the previously announced 5.6l million sq. ft. target production footprint", the company said in a statement on September 17th. All this activity has even earned Canopy the moniker, "the Google of pot".

#5 Constellation Brands, Inc. STZ

Constellation Brands, the maker of Corona beer, upped the ante in the cannabis sector by betting big on Canopy. Stock is up over 9.4 percent for the past month since the announcement of the deal.

Some analysts will argue that if investors want to make money on Canopy, they should buy into Constellation as the less risky play in an emerging industry. After all, this gives them an in when pot is legalized, and if anything goes wrong, well, they've still got stock in a really solid beverage company.

Other companies making waves in the cannabis sector:

Zynerba Pharmaceuticals ZYNE is a company that is diving deep into cannabinoid therapies. Currently, the company has only two drugs in development; ZYN001 and ZYN002. ZYN001, a THC pro-drug patch, aims to treat a number of conditions through a revolutionary transdermal delivery system while ZYN002, another transdermal delivery system, this time through a gel, is the first and only synthetic non-psychoactive CBD drug of its kind.

Though Zynerba reported a loss of $12 million in its recent second quarter earnings report, the company has doubled down on its ZYN002 medicine, and its studies for use in specialized cases of Focal Epilepsy and Epileptic Encephalopathies.

Molson Coors TAP is an iconic beverage company, owning some of the largest and most identifiable beers on the planet. The company's history can be traced back to the 1700's and it has a presence all across the world.

In the past year, the rumor mill has been churring up ideas that Molson Coors might also be delving into the cannabis industry. Finally, the rumors have been confirmed and it has announced its intention to develop a new cannabis-infused non-alcohol beverage.

Namaste Technologies NXTTF is an international e-commerce cannabis company operating in 20 countries. Currently, the company's primary market is in Canada, though as laws evolve around the world, Namaste is well positioned for expansion.

Recently, Namaste received Canada's first-ever "sales-only" license for medical cannabis distribution. The license represents a huge milestone for the company.

Sean Dollinger, President and CEO noted: "Today marks a monumental achievement for the entire Namaste team and our shareholders."

By. Ian Jenkins

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**

Notice for Forward-Looking Information 

Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such forward-looking information includes that investor interest in the cannabis sector will continue to grow to October 17, 2018 and beyond; that cannabis use and sales will grow as currently predicted; Scythian's intended acquisition of various foreign companies and expansion into the US market; that the Aphria stock owned by Scythian will retain its current value and that Scythian can realize a profit on its sale; Scythian's plans to incubate projects in various locations throughout the world; that it could be granted licensable patents; that Scythian will get an exclusive cannabis distribution license in Florida; that Scythian will create a range of cannabis consumer brands, to be distributed through their own digital platforms, retail units and via partners, that Scythian can develop a proprietary cannabinoid-based combination drug therapy for the treatment of concussions and traumatic brain injury; and that it will be able to carry out its business plans.

Readers are cautioned to not place undue reliance on forward-looking information. Forward looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from those contemplated in the forward-looking information, and even if such actual results or events are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Scythian. Such risks and uncertainties include, among other things: that a regulatory approval that may be required for the intended acquisitions and subsequent sales are not obtained or are obtained subject to conditions that are not anticipated; growing competition for intended acquisitions in the cannabis industry; potential future competition in the markets Scythian operates for sales; competitors may quickly enter the industry; general economic conditions in the US, Canada and globally; the inability to secure financing necessary to carry out its business plans; competition for, among other things, capital and skilled personnel; the possibility that government policies or laws may not permit legal cannabis sales or growth or that favorable laws in place may change; Scythian not adequately protecting its intellectual property; interruption or failure of information technology systems; the cannabis market may not grow as expected; Scythian's technology may not achieve the expected results and its accomplishments may be limited; Florida may not grant to Scythian an exclusive cannabis medical license; even if it is granted the Florida license, Scythian may not be able to profitably use it; Scythian may not successfully develop a cannabis consumer brand; and it may not be successful in developing a cannabis based treatment for concussions and brain therapy; even if it develops a successful treatment, it may not be able to protect its intellectual property; its patent applications may be rejected or successfully challenged; Scythian's business plan also carries risk, including its ability to comply with all applicable governmental regulations in a highly regulated business; incubator risk investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal laws; and regulatory risks relating to Scythian's business, financings and strategic acquisitions.

DISCLAIMERS

PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Safehaven.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively "the Company") has been paid by the profiled company or a third party to disseminate this communication. In this case the Company has been paid by Scythian seventy thousand US dollars for this article and certain banner ads. This compensation is a major conflict with our ability to be unbiased, more specifically:

This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. We have been compensated by Scythian to conduct investor awareness advertising and marketing for Scythian. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur.

We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications and on our website is believed to be accurate and correct, but has not been independently verified and is not guaranteed to be correct. The information is collected from public and non-public sources but is not researched or verified in any way whatsoever to ensure the information is correct.

SHARE OWNERSHIP. The owner of Safehaven.com owns shares and/or stock options of this featured company and therefore has an additional incentive to see the featured company's stock perform well. The owner of Safehaven.com will not notify the market when it decides to buy or sell shares of this issuer in the market. The owner of Safehaven.com will be buying and selling shares of the featured company for its own profit. This is why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor or a registered broker-dealer before investing in any securities.


NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.

RISK OF INVESTING. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities.

DISCLAIMER:  Safehaven.com is Source of all content listed above.  FN Media Group, LLC (FNM), is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated in any manner with Safehaven.com or any company mentioned herein.  The commentary, views and opinions expressed in this release by Safehaven.com are solely those of Safehaven.com and are not shared by and do not reflect in any manner the views or opinions of FNM.  FNM is not liable for any investment decisions by its readers or subscribers.  FNM and its affiliated companies are a news dissemination and financial marketing solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security.  FNM was not compensated by any public company mentioned herein to disseminate this press release.

FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.


Contact Information:
FN Media Group LLC
e-mail:  editor@financialnewsmedia.com
U.S. Phone: +1(954)345-0611

SOURCE Safehaven.com

Loading...
Loading...
Market News and Data brought to you by Benzinga APIs
Posted In: Small CapOpinionPress Releases
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...