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Coors Enters CBD Market With New Distribution Deals

• As CBD continues to hit fever pitch with consumers, Molson Coors Brewing Company is entering the business
• Company recently inked distribution deals with Colorado’s Best Drinks and DRAM Apothecary.

Emily Cappiello Contributor 

As CBD continues to hit fever pitch with consumers, Molson Coors Brewing Company is entering the business. The company recently inked distribution deals with Colorado’s Best Drinks and DRAM Apothecary.

“We are very excited to add Colorado’s Best Drinks and DRAM to our portfolio, giving us the ability to offer amazing CBD hemp products to retailers and consumers in the Denver Metro area. We see a big demand for high quality and unique products in the non-alcoholic space and we think Colorado’s Best Drinks and DRAM are the perfect solution to fill that consumer demand,” says Jennifer DeGraff, director of marketing, Coors Distributing Company.

Moose Koons, co-owner of Colorado’s Best Drinks, explains that the process started about eight months ago when one of the company’s beverages ended up in the hands of someone at the company.

“We started the process from there and Coors really saw an opportunity,” he says. “Working with Coors is going to open up our distribution into restaurants, grocery, bars, convenience stores — they have a fantastic network. But it’s also about the validation and legitimacy of our organization. We’ve been selling CBD drinks for more than a year now.”

Koons explains that Colorado’s Best Drinks has worked closely with the Colorado Department of Health in order to figure out healthy CBD boundaries in consumables, which he feels is one of the reasons that Coors was drawn to the company.

Additionally, Koons adds that what makes Colorado’s Best Drinks different from other CBD-infused beverages out there is the fact that the company is hands-on in the manufacturing process.

“We understand how ingredients go together and how they bond. Sometimes, CBD can be tricky and may not want to blend, but we found solutions to make sure we are putting out a quality product,” he says.

As for teaming up with Coors as far as distribution, Koons says the company is poised for growth already, modeling its processes after the booming craft beer industry in Colorado.

“We watched the craft beer industry and we’ve been working on scalability for two or three years. We should be able to increase distribution without having to change the facility and we put a lot of processes and procedures in place already,” he says.

Currently, distribution will be limited to Colorado while the Food and Drug Administration irons out regulations regarding hemp-based food and beverages. However, Koons notes that continuing the education of the consumer will help to eliminate stigma, questions and concerns surrounding the growing food and beverage category.

“One of our goals is to continue to educate the consumer that hemp is fantastic. It’s sustainable and there are even receptors in your body that allow you to be able to process it. We are going to continue to try to really bring hemp into the spotlight,” he says.

Colorado’s Best Drinks offers a full line of sparkling beverages infused with broad spectrum hemp extract. Each flavor – Black Cherry, Cola, Ginger Ale, Lemonade and Root Beer – is crafted with just five ingredients: sparkling water, organic agave nectar, natural flavors, non-GMO citric acid, and broad spectrum hemp extract. Each 12oz BPA-free can contains 100 calories and are all vegan, gluten-free, non-GMO, and free of sodium and preservatives.

Source: https://www.forbes.com/sites/emilycappiello/2019/09/24/coors-enters-cbd-market-with-new-distribution-deals/#19e7012f4bc5

SPONSOR: NORTHBUD (NBUD:CSE) Sustainable low cost, high quality cannabinoid production and procurement focusing on both bio-pharmaceutical development and Cannabinoid Infused Products. Learn More.

Global Cannabis Infused Drinks Market Anticipated to Accelerate At 438% CAGR at the end of 2029

• Global sales of cannabis infused drinks will surpass US$ 200 Mn in 2019, propelled by growing efficiencies in the delivery methods of drinkables, along with increasing discretion and social acceptance of the consumption method, in contrast to smoking cannabis.
• Cannabis infused beer continues to account for leading shares of the market, approximately 80%, which can be attributed to the strong perception of leading beer brewers that intersection between cannabis-infused functional beverages and beer makes a good business sense.

Global sales of cannabis infused drinks will surpass US$ 200 Mn in 2019, propelled by growing efficiencies in the delivery methods of drinkables, along with increasing discretion and social acceptance of the consumption method, in contrast to smoking cannabis. Broader legalization of marijuana has led big alcohol producers to pivot to pot in the recent past. Cannabis infused beer continues to account for leading shares of the market, approximately 80%, which can be attributed to the strong perception of leading beer brewers that intersection between cannabis-infused functional beverages and beer makes a good business sense. The US will remain the leading market for cannabis infused drinks, as leading manufacturers focus on creating safer ways of ingesting cannabis for consumers, while the start-ups continue to scramble for capitalizing on demand through new range of cannabis-infused beverages. Canada is expected to be the high-growth market for cannabis infused drinks, with gains primarily driven by the recent federal legalization of marijuana.

What are the Key Growth Drivers of Cannabis Infused Drinks Market?

• Manufacturers of cannabis infused drinks are putting more efforts for creating proper emulsification of THC, in a bid to achieve proper suspension within liquids and quicker uptake time – under 30 minutes. This falls in line with the consumer demand for faster feedback on their dosage, which in turn will favor sales of cannabis infused drinks. Leading beverage companies have taken notice of the ravenous appetite of consumers that exists inside the cannabis culture, thereby transitioning into cannabis infused drinks industry.
• As recreational marijuana legalization continues to become a reality across more U.S. states, individuals have started showing more interest in cannabis-infused drinks. Established beverage companies as well as entrepreneurs are taking a close peek into formulas and methods for infusing CBD or THC or both into beverages.
• Cannabis infused non-alcoholic beer is an emerging trend which is expected to gain significant traction, as companies focus on appealing the health-conscious pool of consumers. For instance, Grain wave is a THC-infused non-alcoholic beer that hit the dispensary shelves in December 2018.
• The novelty of being able to drink THC-infused beverages has gained marked preference in the current adult-use recreational marijuana industry, especially for beverages that mimic beer or wine. While this trend gains pace, manufacturers are exploring the in-demand flavors to reinforce their product sales.

Cannabis Infused Drinks Market- Competitive Landscape

The competitive landscape of the cannabis infused drinks market continues to face the turmoil of regulations on the sales and consumption of cannabis. Cannabis infused drinks market in Canada is expected to grow at an impressive pace, in line with the existing favorable federal regulations that back the sales of cannabis in the region. Alcohol industry giants are buying into the ‘potent potable pot’ concept, however key issues prevail, such as the maze of laws that deal with beer and pot. Following the legalization of marijuana in Canada, beverage companies have increased the production of cannabis infused drinks in different flavors to tap growing demand from enthusiasts.

Source: https://webchronicletoday.com/2019/09/23/global-cannabis-infused-drinks-market-anticipated-to-accelerate-at-438-cagr-at-the-end-of-2029/

SPONSOR: NORTHBUD (NBUD:CSE) Sustainable low cost, high quality cannabinoid production and procurement focusing on both bio-pharmaceutical development and Cannabinoid Infused Products. Learn More.

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Marijuana’s Biggest Day of the Year Is 4 Weeks Away

• Last year, the marijuana industry made history… many times over.
• But nothing took precedence over Canada becoming the first industrialized country in the world to legalize recreational cannabis, with sales commencing on Oct. 17, 2018.

Sean Williams Sep 19, 2019 at 6:06AM

Last year, the marijuana industry made history… many times over. But nothing took precedence over Canada becoming the first industrialized country in the world to legalize recreational cannabis, with sales commencing on Oct. 17, 2018. Even though Canada substantially trails the U.S. in terms of aggregate annual legal weed sales, it’s setting an example among industrialized countries that the legalization of marijuana is possible.

Now, the biggest date of 2019 is rapidly approaching. And wouldn’t you know it, it’s Oct. 17, once again.

Image source: Getty Images.

Why Oct. 17 is a big date for the pot industry (again)

Four weeks from today, laws governing the rollout of derivatives will officially go into effect in Canada. A derivative is an alternative cannabis consumption product that’s not already been approved.

Over the past 11 months and change, Canada has allowed for the sale of dried cannabis flower, cannabis oil, and sublingual sprays. Meanwhile, edibles, nonalcoholic cannabis-infused beverages, vapes, concentrates, and topicals, weren’t legal. This sort of two-step legalization process was done to allow the industry to find its footing, as well as give regulators time to adjust to cannabis becoming legal for adult purchase. But on Oct. 17, regulations now governing dried cannabis will apply to derivative products as well.

However, investors and Canadian consumers should understand that derivative pot products aren’t going to be showing up in dispensaries on Oct. 17. Much in the same way that it took dried cannabis flower brands weeks to begin populating dispensary store shelves, it’ll probably be the same story for derivative products. Regulatory agency Health Canada has cautioned that derivative supply won’t hit the market until mid-December, with it taking weeks or months thereafter for supply to be adequate to meet demand.

This, of course, is really big news for marijuana stocks, because derivative cannabis products are a considerably higher margin product for the industry, relative to dried flower. In select U.S. states (ahem, Oregon), we’ve witnessed the oversupply and commoditization of dried flower, leading to weaker margins for pot businesses. We’re highly unlikely to see oversupply and pricing concerns from derivatives anytime soon.

A point that is sometimes lost on this derivative launch is that these are products which speak to a younger generation of cannabis users. Not only are derivatives more attractive in the respect that they may not need to be smoked, but they’re going to attract potentially long-term customers to the industry.

Image source: Getty Images.

Growers go all-out for derivative production

Considering the importance of derivatives to cannabis stock margins, it’s not surprising to find that growers have been laser-focused on derivative production for a good portion of 2019.

Some growers, such as OrganiGram Holdings (NASDAQ:OGI), have chosen to set up a variety of in-house derivative options. During the company’s fiscal third quarter, OrganiGram announced that it’d be investing 15 million Canadian dollars into a line of fully automated equipment necessary to produce up to 4 million kilos of chocolate edibles per year. This coincides with OrganiGram’s 56,000-square-foot phase 5 expansion which, among other things, is targeted at extra space for derivative production and processing.

The company has also developed a nano-emulsification technology that can speed up the onset of the effects of cannabinoids. This product will first be introduced as a powder that can be added to beverages, but OrganiGram is also actively looking for a partner to help it develop an infused beverage product containing this proprietary technology.

Cronos Group (NASDAQ:CRON), and its investment partner Altria, are also eager to see the green flag wave on derivatives. Cronos Group’s peak annual output of nearly 120,000 kilos per year may not even be enough to place this brand-name pot stock among the top-10 growers. But that’s OK with Cronos, as it’s placed its attention almost entirely on derivative cannabis products.

For instance, Cronos and Altria will be working together to roll out an assortment of vape products. Altria is well-versed in the adult smoking market and should prove helpful in assisting Cronos Group’s marketing efforts and product launches (regarding vapes). Beyond vaping, Cronos Group will be leaning on its partnership with Ginkgo Bioworks to produce targeted cannabinoids at commercial scale, as well as other third-party extraction service providers.

Image source: Getty Images.

Speaking of extraction services, there may not be a smarter way of playing the derivatives craze than with third-party extraction providers. As an example, MediPharm Labs (OTC:MEDIF) only commenced its extraction operations during the fourth quarter. Despite this, MediPharm managed to turn a nominal operating profit of $0.01 per share in the second quarter. The company’s sales and profitability are set to soar as growers scramble for derivative exposure. Yet, MediPharm’s sales and profits should remain highly predictable with the company locking in contracts for an extended period of time. Soon enough, the company’s annual extraction capacity will hit 500,000 kilos.

The one thing to remember about the upcoming marijuana derivatives launch

While, on one hand, the launch of derivative products should be lauded by investors, there’s another side to this launch that everyone should be aware of.

As I alluded to earlier, Health Canada has cautioned that alternative consumption products aren’t going to immediately hit dispensary shelves once the green flag waves on Oct. 17. Rather, it’s going to take time before any sort of supply is built up in the marketplace, with a presumptive two-month gap between when derivative regulations going into effect and when derivative products will begin showing up in licensed stores.

But here’s the thing: Product showing up in stores doesn’t mean that the supply will be sufficient to meet demand. Similar to what we’ve been witnessing in the dried flower market, supply issues exist that are likely going to make it difficult for derivative products to find their way into dispensaries, at least in the early going.

Don’t get me wrong, I expect derivatives to push sales and margins higher for cannabis stocks across the board. However, I think it’s going to be multiple quarters before Health Canada resolves a number of supply issues, resulting in what could be weaker-than-expected sales in the months to come.

Make no mistake: Derivatives are the future of the cannabis industry. Just understand that the future isn’t going to happen overnight. Give this industry, and the rollout of derivatives, proper time to mature, and you won’t be disappointed.

Here’s The Marijuana Stock You’ve Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming.

Cannabis legalization is sweeping over North America – 10 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.

And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.

Because a game-changing deal just went down between the Ontario government and this powerhouse company…and you need to hear this story today if you have even considered investing in pot stocks.

Source: https://www.fool.com/investing/2019/09/19/marijuanas-biggest-day-of-the-year-is-4-weeks-away.aspx

SPONSOR: NORTHBUD (NBUD:CSE) Sustainable low cost, high quality cannabinoid production and procurement focusing on both bio-pharmaceutical development and Cannabinoid Infused Products. Learn More.

As Canada gears up for pot 2.0, more shortages are on the menu

• Canada will add edibles, extracts and topicals to the list of legal cannabis products no later than Oct. 17.
• Many analysts agree these products will generate better demand and margins than dried flower.
• But the federal government has not yet issued regulations for the new formats, making it difficult for producers to prepare lest they unknowingly violate some rule.

By: Kristine Owram, Bloomberg News

Canada’s legalization of pot edibles later this year is facing an even more shambolic start than the dried flower market, which is still struggling to meet demand, according to industry players.

“At least that time we knew what the permissible product types were going to be and were already making them in the medical context,” said cannabis lawyer Trina Fraser, a partner at Brazeau Seller Law in Ottawa.

Canada will add edibles, extracts and topicals to the list of legal cannabis products no later than Oct. 17. Many analysts agree these products will generate better demand and margins than dried flower. But the federal government has not yet issued regulations for the new formats, making it difficult for producers to prepare lest they unknowingly violate some rule.

A spokeswoman for Health Canada declined to comment on when the regulations will be released.

In addition, a huge licensing backlog has built up at Health Canada, the government agency that oversees cannabis regulations. About 614 applications were waiting in the queue as of March 31.

“A full rollout amongst a nice wide array of producers and a wide array of these new product types is going to take time, literally years, because we have such a licensing backlog,” Fraser said.

Company Stockpiling

Canada’s market for edibles and other alternative pot produces will eventually be worth C$2.7 billion ($2 billion) annually, but consumers should expect “missteps, delays and frustration” in the early days, Deloitte said in a report published Monday. Jennifer Lee, Deloitte Canada’s cannabis national leader, estimated it will be a minimum of 24 months before the industry normalizes.

In the meantime, many pot companies are stockpiling, choosing to forgo revenue today to ensure they have enough supply for the new high-value products. This is exacerbating the shortage of dried flower, but executives say it’s worth it.

“We’ve made a very conscious effort to delay revenue,” said Chuck Rifici, chief executive officer of Auxly Cannabis Group Inc. Selling into the market today doesn’t build brand recognition because shelves are empty and consumers are buying whatever’s available, he added. “I would much rather save that product, get a multiple of margin on that brand and make sure that I have enough inventory.”

Lab Delays

This is proving to be a boon for extraction companies like Valens GroWorks Corp. Valens has contracts with many of the biggest pot companies, including Canopy Growth Corp., Hexo Corp. and Tilray Inc., to extract cannabis oil from their plants, which is then used for products like edibles and vape cartridges. It’s also investing heavily in its testing labs in the belief that Health Canada will have stringent regulations to ensure pesticides and other contaminants don’t make it into the new consumer products.

“Even in labs today there’s delays where people are waiting three weeks to a month to get lab results back and I think that will only get worse,” said Everett Knight, Valens’ executive vice president of strategy and investments.

Companies are also making big bets on what products will be in demand, with Canopy and Hexo leaning toward cannabis beverages and others toward vaping.

Be Prepared

“Why do I want an edible or a drink when I can have a vape?” Irwin Simon, interim CEO of Aphria Inc., said in an interview on the sidelines of a cannabis conference last month. “I see the margins and the opportunities there.”

Rifici at Auxly also believes vape pens will be “the most important category by far.” But there are many unanswered questions. For example, will the government require companies to engrave its mandatory THC warning symbol into the pen itself, or will a sticker suffice?

This is why Valens is offering its customers 196 different options for its white-label vape pens. “You’ve got to make sure you cover your bases and prepare for all the possibilities,” Knight said.

Despite the uncertainty, it’s better to be prepared even if plans and production lines have to be tweaked once the regulations come out, said Bruce Linton, CEO of Canopy, which is building a 197,000 square foot bottling plant for cannabis beverages in Smiths Falls, Ontario.

“We’re in a situation where it’s better to spend money to be ready than to save money and be late,” he said.

 Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.

Source: https://www.bnnbloomberg.ca/as-canada-gears-up-for-pot-2-0-more-shortages-are-on-the-menu-1.1268844