FinancialBuzz.com’s latest Behind the Buzz Show: Featuring Our Corporate Overview on BevCanna Enterprises Inc.
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.
Customers around the world consume sugary drinks on a daily basis. While the statistics on the daily average consumer sugar intake are astonishing, the number has steadily fallen over the past several years. For instance, in Canada, adults over the age of 19 have drastically decreased the amount of sugar they ingest as, according to a study by Statistics Canada, Canadians aged 19 or older consumed 85 grams of sugar daily in 2015, cutting down from 93 grams in 2004. While the daily intake can be comprised of other factors such as foods, the study suggested sugary drinks were the top sugar source for all Canadians. Nowadays, consumers are becoming more aware and cautious about what they put in their bodies. And in turn, consumers are beginning to transition towards health-beneficial and functional beverages instead of ones packed with sugars. For instance, cannabis-infused beverages are gaining momentum particularly quickly within the beverage industry. Specifically, the CBD or cannabidiol compound found within the cannabis plant is being infused into beverages to create a therapeutic and functional drink, as studies have linked CBD to treating a range of health benefits such as insomnia, anxiety, seizures, inflammation, and chronic pain. CBD is more commonly being used as opposed to THC or tetrahydrocannabinol because it does not provide consumers with psychoactive effects. Instead, two compounds offer similar health benefits, despite having different biological makeups. While the legality of CBD-based products was unclear prior to last year, the market has swiftly gained traction following the passage of several historic bills. Notably, the passage of the U.S. Farm Bill paved the way for the hemp-derived CBD industry’s growth, while Canada’s legalization of adult-use cannabis also greatly contributed to the industry. Lastly, Canada’s upcoming legalization of cannabis-infused edibles in October of this year is expected to propel the industry even further. According to data compiled by Mordor Intelligence, the global cannabis market was valued at USD 14.5 Billion in 2018. By 2024, the market is projected to reach USD 89.1 Billion while registering a robust CAGR of 37% during the forecast period from 2019 to 2024.
The CBD industry has become an explosive marketplace over the past year. Following the passage of the U.S. Farm Bill, consumers gained the right to freely purchase CBD-based products at their local convenience stores and pharmacies. Overall, CBD is becoming more and more prevalent in the daily lives of consumers because of the substantial investments that many large corporations are pouring into the industry. RBC Capital Markets analyst Nik Modi suggests that corporations are entering into the cannabis industry to find a new source of revenue as their main businesses continue to slow down. For example, alcohol sales have steadily declined over the past several years and according to data by the Wall Street Journal’s industry tracker IWSR, U.S. alcohol volumes dropped by 0.8% in 2018, slightly steeper than 0.7% in 2017. Specifically, beer volume was hit the hardest, with volumes down 1.5% in 2018 compared to a decline of 1.1% in 2017. The dwindling sales have prompted beverage corporations to find new streams of revenues and with the emerging cannabis market, along came an attractive opportunity. However, the U.S. Food and Drug Administration has clearly stated that the use of CBD in foods and beverages is prohibited. Nonetheless, certain states such as Californiahave implemented their own legislation to allow the use of CBD in consumable products. Moving forward, analysts believe that the cannabis-infused beverage industry could potentially capture about 20% of the U.S. market for edible cannabis products by 2022. “Interest has spiked from the beer industry on mounting evidence of a substitution relationship between cannabis and alcohol, while large soda companies increasingly view CBD as a natural fit within their strategically important wellness offerings,” Bobby Burleson, Canaccord Genuity Managing Director wrote.
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