Market Overview

Drink Makers Seek to Include CBD and Cannabis Beverage Alternatives

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NEW YORK, Aug. 7, 2019 /PRNewswire/ -- As the cannabis industry continues to develop, savvy consumers and businesses are creating innovative new ways to ingest cannabis. Due to widespread stereotypes, many imagine cannabis users relying on hastily rolled joints. However, as the legal industry continues to accelerate, new products are constantly emerging. For instance, in legal markets such as Colorado or California, extracts and concentrates have become increasingly popular because of their potency and immediate effects. Specifically, Colorado has witnessed its extract and concentrate sales eclipse its flower sales in recent years. And while extracts and concentrates are widely popular, other vendors have incorporated cannabis into edibles and beverages. In particular, edibles are more abundant in regions where recreational cannabis is legal. On the other hand, the cannabis-infused beverage industry is experiencing significant strength because of large beverage corporations entering into the marketspace. Notably, big alcohol has set its sights on the cannabis market because of its declining primary revenue drivers. As a result, many companies are adding cannabis-infused beverages to their product lines in order to combat lower sales numbers that are a result of the declining alcohol consumption levels. However, to note, most companies are predominantly only adding CBD, or cannabidiol, to their beverages because of regulatory restrictions on THC. Moreover, companies are marketing CBD-infused beverages as health and wellness products rather than recreational or relaxation products. And while the infused beverage market is already experiencing a surge in momentum in legal regions, it's expansion into new territories is expected to spur its growth. According to data compiled by Fior Markets, the global cannabis beverages market is expected to reach USD 4.56 Billion by 2025 while exhibiting a CAGR of 16.8% during the forecast period from 2018 to 2025. BevCanna Enterprises Inc. (CSE:BEV), Anheuser-Busch InBev SA/NV (NYSE:BUD), Molson Coors Brewing Company (NYSE:TAP) (TSX:TPX), HEXO Corp. (NYSE:HEXO) (TSX:HEXO), Harvest Health & Recreation Inc. (OTC:HRVSF) (CSE:HARV)

The therapeutic benefits associated with CBD-infused beverages has already attracted many consumers. According to data by High Yield Insights, approximately 40% of U.S. consumers said they are willing to try CBD, based on unbiased research and physician recommendations. Recent studies have suggested that the properties of CBD can be effective in treating medical conditions associated with cancer, arthritis, migraines, multiple sclerosis, schizophrenia, and epilepsy. However, most consumers are primarily using CBD-infused products for its pain relief, promoting relaxation, or uplifting their mood. While CBD can come in various forms such as flower or extracts, beverages are more popular because they can appeal to more health-conscious consumers. According to Visual Capitalist, infused beverages are much easier to administer and are seen as a healthier way to consume CBD. Furthermore, beverages are more accessible and available and can be easily found in restaurants, supermarkets, convenience stores, and even online e-commerce platforms. While cannabis-infused beverages are most popularly associated with non-alcoholic products, consumers now have a wide-ranging selection to choose from and can find wines, spirits, coffee, tea, kombucha, and sports drinks infused with CBD. However, despite the popularity of the industry, consumers and researchers agree that more transparency is needed for CBD products. And as research progresses, government regulators are expected to establish regulations regarding the addition of CBD into foods and beverages. "The future of the cannabis industry is not just going to be adult and medical use cannabis but the inclusion of CBD in a large array of beverages and foods That trend has already started, and will quickly accelerate with the national legalization of cannabis and the creation of a regulatory structure for inclusion of CBD in edibles. That means that CBD and hemp will figure prominently in the future of both the beverage and the cannabis industry," according to Joseph V. Micallef, former Chief Executive Officer of Allegro Media Group and keynote speaker for the wine and spirits industry.

BevCanna Enterprises Inc. (OTC:BVNNF) (CSE:BEV) is also listed on the Canadian Securities Exchange under the ticker (CSE:BEV). Earlier last week, the Company announced,

"that its board of directors has appointed Michael Darby as the Chief Financial Officer and Corporate Secretary of the Company, effective July 29, 2019. Mr. Darby succeeds John Campbell, who will continue to hold the role of Chief Strategy Officer of the Company, and who will now focus primarily on merger, acquisition and joint venture opportunities in BevCanna's two principal markets, Canada and California.

"We're pleased that Michael has joined the BevCanna team," said Marcello Leone, CEO of BevCanna. "Michael's extensive financial management expertise will be an invaluable asset to our team, especially in this period of strategic expansion. His stewardship capabilities across a range of industries, and particularly in the capital markets arena, will be critical as we move forward with our long-term plans."

"It's an exciting opportunity that I couldn't pass up," noted Mr. Darby. "The cannabis-infused beverage market is on the brink of explosive growth, and BevCanna is at the forefront of the industry. To join a team with the branding, beverage and cannabis expertise that this team jointly holds is very appealing."

A finance professional with over 25 years of progressively senior financial management experience, Mr. Darby joins BevCanna from Naturo Group Investments Inc. Prior to joining Naturo Group, Mr. Darby served as Chief Financial Officer of Skidmore Group Holdings Inc., a family-owned private equity firm. Previous roles include CFO of TCG International Inc., an international manufacturer, retailer and franchisor of auto & window glass, and Canadian manufacturer & distributor of architectural millwork, and Corporate Controller & Director of Administration of Glentel Inc., a publicly-traded retail telecommunications company.

Mr. Darby is a member of the Chartered Professional Accountants of British Columbia and earned a Bachelor of Commercial Studies degree from the University of Western Ontario.

About BevCanna: BevCanna Enterprises Inc. (CSE:BEV) plans to develop and manufacture cannabinoid-infused beverages and consumer products for in-house brands and white label clients. With decades of experience creating, branding and distributing iconic brands that have resonated with consumers on a global scale, the team demonstrates an expertise unmatched in the emerging cannabis beverage category. Based in British Columbia, Canada, BevCanna has a 100-acre outdoor cultivation site in the fertile Okanagan Valley and the exclusive rights to a pristine spring water aquifer, as well as a world-class 40,000-square-foot, HACCP certified manufacturing facility, with a current bottling capacity of up to 72M bottles. BevCanna's vision is to be a global leader in infused innovations."

For our latest "Buzz on the Street" Show featuring BevCanna Enterprises Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=eadzJGFiwg4

Anheuser-Busch InBev SA/NV (NYSE:BUD) is a publicly-traded company (Euronext: ABI) based in Leuven, Belgium, with secondary listings on the Mexican and South African stock exchanges and with American Depositary Receipts on the New York Stock Exchange. Recently, AB InBev, the world's leading brewer, and Tilray, a global pioneer in cannabis production and distribution, announced a partnership to research non-alcohol beverages containing tetrahydrocannabinol (THC) and cannabidiol (CBD). The partnership is limited to Canada and decisions regarding the commercialization of the beverages will be made in the future. The research partnership combines AB InBev's deep experience in beverages with Tilray's expertise in cannabis products. AB InBev's participation will be through its subsidiary Labatt Breweries of Canada, one of the country's founding businesses and its leading brewery, and Tilray's participation will be through its Canadian adult-use cannabis subsidiary High Park Company, which develops, sells, and distributes a portfolio of socially responsible cannabis brands and products in Canada. Each company intends to invest up to USD 50 Million USD, for a total of up to USD 100 Million USD. "Labatt is committed to staying ahead of emerging consumer trends. As consumers in Canada explore THC and CBD-infused products, our innovative drive is matched only by our commitment to the highest standards of product quality and responsible marketing. We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities," said Kyle Norrington, President, Labatt Breweries of Canada. "We look forward to learning more about these beverages and this category in the months ahead." 

Molson Coors Brewing Company (NYSE:TAP) (TSX:TPX) has defined brewing greatness for more than two centuries. Molson Coors Canada (MCC), the Canadian business unit of Molson Coors Brewing Company, and HEXO Corp. recently announced that they had closed the transaction announced on August 1st, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer. Vye will report to the Truss board of directors consisting of three members appointed by MCC and two members appointed by HEXO. "With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running," said Brett Vye, Chief Executive Officer at Truss. "When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer. Why "Truss"? We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future."

HEXO Corp. (NYSE:HEXO) (TSX:HEXO) creates and distributes innovative, easy-to-use and easy-to-understand products to serve the Canadian cannabis market. HEXO Corp. and Molson Coors Canada (MCC), the Canadian business unit of Molson Coors Brewing Company (NYSE:TAP) (TSX:TPX) recently announced that they have closed the transaction announced on August 1st, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer. Vye will report to the Truss board of directors consisting of three members appointed by MCC and two members appointed by HEXO. "With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running," said Brett Vye, Chief Executive Officer at Truss. "When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer. Why "Truss"?  We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future."

Harvest Health & Recreation Inc. (OTCQX:HRVSF) (CSE:HARV), headquartered in Tempe, Arizona, is a multi-state cannabis operator (MSO) and vertically-integrated cannabis company. Harvest Health & Recreation, Inc. recently announced the signing of an agreement to bring their popular Colors, CBx Essentials and Harvest-branded CBD product lines to more than 10,000 retail stores, including convenience stores and gas stations across the country. The multi-million-dollar partnership, which will roll out to the Asian American Trade Associations Council ("AATAC") retailer network brings leading CBD products with significant demand to a system of every day strategic markets in small towns and major metropolitan regions. "This exclusive partnership enables a massive advance in distribution for Harvest-owned CBD brands and follows our strategic path of expanding the scale of our wholesale and retail distribution nationally," said Harvest Chairman Jason Vedadi. "Demand for CBD is unprecedented and by delivering leading products in 10,000 accessible locations gives us an unparalleled reach to consumers."

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