CBD Infused Products Fill Store Shelves Around the Country Following Regulatory Overhaul
FinancialBuzz.com News Commentary
NEW YORK, Aug. 21, 2019 /PRNewswire/ -- Following the recent passage of the U.S. Farm Bill, CBD or cannabidiol, became the latest craze for consumers. CBD is derived from the hemp plant, which is classified under the cannabis family. Similarly, its counterpart, marijuana, also falls under the cannabis family. However, hemp and marijuana widely differ in their biological makeup. Specifically, marijuana is known as the psychoactive-inducing part of the cannabis plant, while hemp is its opposite. Marijuana is scientifically proven to cause mind-altering effects because of its abundance of the THC or tetrahydrocannabinol. Meanwhile, the active compound in hemp is CBD, which stimulates relaxation without the effects of being "high." Several years ago, CBD was viewed in the same criteria as THC because both are derived from the cannabis plant, leading to their listing as Schedule 1 drugs. However, extensive research has since proven otherwise. Medical researchers have concluded that CBD is the non-psychoactive property of cannabis that offers consumers therapeutic benefits, instead of a high. The passage of the U.S. Farm Bill ultimately legalized CBD and allowed its commercial sale. Moreover, the bill also allowed businesses to transport CBD between state lines, which was previously federally illegal. As a result, the emergence of CBD products began to spread throughout the nation. Now, consumers can easily find CBD products at local stores or smoke shops. Additionally, consumers can also order CBD products on e-commerce platforms from large international distributors. Furthermore, select distributors have established international operations to commercialize the sale of CBD products in legal countries such as Australia, Canada, and Germany. Overall, the CBD market is expected to have a significant impact within the greater cannabis industry because of its global penetration. And as more countries move to adopt CBD for medical as well as recreational purposes, the marketplace is primed to become a massive, global market. According to data compiled by Grand View Research, the global cannabidiol market is projected to reach USD 9.69 Billion by 2025 while registering a CAGR of 32.6% during the forecast period. BevCanna Enterprises Inc. (OTC: BVNNF) (CSE: BEV), Molson Coors Brewing Company (NYSE: TAP) (TSX: TPX), Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT), Charlotte's Web Holdings, Inc. (OTC: CWBHF) (TSX: CWEB), iAnthus Capital Holdings, Inc. (OTC: ITHUF) (CSE: IAN)
The growth of the CBD industry led to a proliferation of various products such as tinctures, topicals, and extracts. While extracts and dried flower remain popular, emerging products such as edibles and beverages are quickly gaining market shares. CBD-infused edibles and beverages are becoming widely popular because they offer a new method to consume CBD without the harmful effects associated with smoking or vaping. Typically, health conscious consumers that are interested in the CBD industry are more keen to try edibles or beverages, and in particular, beverages are more popular because it is easier for producers to create CBD-infused beverages than edibles. For instance, CBD edibles are made from CBD-based fats or oils. Generally, consumers avoid placing the oil onto direct heat, meaning that baking is much more common. On the other hand, beverages are much more simple and only require tinctures or solvents to be effective. For example, producers can add droplets of a tincture or add spoonfuls of soluble powder into the beverage then mix the concoction. The solvents can then essentially be added to any beverage such as water, coffee, tea, energy drinks, and even alcohol. Depending on the type of beverage, producers normally add a certain amount of CBD content. Typically, a standard 16oz beverage can contain up to 20mg of CBD content, but depending on the specific beverage, there can be more or even less traces of CBD. However, some consumers may find the CBD content too little or too much. Consequently, consumers can easily purchase a CBD-based tincture and add the desired amount into the beverage, making them completely customizable. The customizable aspect of the beverage industry is appealing to many consumers, particularly people who may want to try CBD but are unsure of the dosage. Furthermore, the infused beverage market has captured the interest of mainstream beverage corporations because of the market's widespread reach. In particular, some companies are interested in creating their own operations, while others may look to just invest into a cannabis-infused beverage operator. "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.
BevCanna Enterprises Inc. (OTC: BVNNF) (CSE: BEV) is also listed on the Canadian Securities Exchange under the ticker (CSE: BEV). Yesterday, the Company announced that, "Health Canada has granted the Company a Research License for the purpose of researching Stability and Homogeneity of Water Soluble Cannabinoid Infusions in Water Based Beverages.
The license will enable BevCanna to move ahead with research activities that involve direct handling of cannabis such as SOP development, stability testing, sensory evaluation and quality assurance for house brands and white label clients. Led by Emma Andrews, Chief Commercialization Officer at BevCanna in conjunction with BevCanna's Quality Assurance and Production Team, the research will be performed at BevCanna's world-class 40,000 square foot HACCP certified bottling facility near Bridesville, British Columbia. The site includes access to a pristine spring water aquifer that will be used as the infusion medium for the initial line of beverages to be produced at the site.
The newly-granted license allows BevCanna to test cannabinoid infusion equipment on their bottling line, as well as in a lab environment, optimizing their precise dosing technology as it scales-up towards full commercialization in 2020. Stability trials will also now commence on BevCanna's two recently announced brands intended for commercialization in Canada, Grüv Beverages™ and Anarchist Mountain Beverages™.
'We're excited about the opportunity to expand our product development and innovation efforts to now validate concepts using cannabinoids infused in our own premium spring water,' said Ms. Andrews. BevCanna recently conducted a North-American consumer research study that indicated current and future consumers are most interested in water-based cannabis infused beverages such as iced tea. 'Our pristine alkaline spring water aquifer is the ideal source to create these beverages. We have unmatched assets and expertise on our team that will allow us to achieve a speed to market advantage, and develop products that truly resonate with consumers'.
The Research License is the second license granted to BevCanna, following the award of a highly-coveted Industrial Hemp Cultivation License in June 2019. BevCanna has also applied for their Standard Processing License from Health Canada.
About BevCanna Enterprises Inc: BevCanna Enterprises Inc. (CSE:BEV) develops and manufactures 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 per shift/per annum."
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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."
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) specializes in the extraction, purification and formulation of health and wellness products. Neptune Wellness Solutions Inc. recently announced that its Solutions Business had begun offering turnkey product development solutions with hemp-derived ingredients to business customers in the United States. A U.S.-based supply chain of licenced hemp extract producers has been established, and initial purchase orders are now being processed. Neptune boasts long-standing experience in the management of custom and white label turnkey product development solutions comprising a diverse array of product forms including softgels, liquids, topicals, emulsions, and water-dispersible powders. Branded ingredients and products that have contributed to Neptune's success, such as MaxSimil® and ECSentialsTM formulations, could potentially be used in unique combinations with hemp ingredients, particularly as the U.S. regulatory framework around hemp extracts and cannabidiol (CBD) evolves. "The U.S. market for hemp is developing rapidly and represents a significant opportunity for the consumer products industry. Neptune is now offering products and services to American brands that want to create a unique hemp-based portfolio, with products made exclusively in the U.S. for the U.S.," said Jim Hamilton, President and Chief Executive Officer of Neptune.
Charlotte's Web Holdings, Inc. (OTCQX: CWBHF) (TSX: CWEB) is the market leader in the production and distribution of innovative hemp-derived cannabidiol ("CBD") wellness products. Charlotte's Web Holdings, Inc. recently unveiled its newest CBD product line - hemp extract-infused CBD Gummies – made with whole-plant extract from its prized hemp genetics and featuring synergistic functional ingredients to support specific health related functions including everyday stress, sleep, and recovery from exercise or active lifestyles. The gummies feature Charlotte's Web whole-plant hemp extract made from the Company's proprietary hemp genetics that people know and trust. Charlotte's Web extracts contain a full-spectrum of 80+ naturally occurring phytocannabinoids plus terpenes and flavonoids. In addition, the three varieties of gummies are uniquely formulated and enhanced with functional herbs and botanical supplements that work in synergy to further support a targeted wellness focus. "Gummies are a very popular edible format as a result of convenience and measurable consumption," stated Kelsey Morrison, Associate Director of Product Development at Charlotte's Web. "This new delivery format from Charlotte's Web provides an easy bite-sized way to ingest full-spectrum hemp-extract CBD."
iAnthus Capital Holdings, Inc. (OTCQX: ITHUF) (CSE: IAN) owns and operates best-in-class licensed cannabis cultivation, processing and dispensary facilities throughout the United States, providing investors diversified exposure to the U.S. regulated cannabis industry. CBD For Life, a subsidiary of iAnthus Capital Holdings, Inc., recently announced that it is continuing to expand its retail presence with a partnership with Dillard's, Inc. "We're excited for our products to be featured on the shelves of one of the largest and most well-regarded fashion retailers in the United States," said Beth Stavola, Co-Founder of CBD For Life and Chief Strategy Officer of iAnthus. "The ability to reach an even broader audience via the well-established customer base of a great partner like Dillard's brings us another step closer to achieving our end goal of establishing CBD For Life as a household name in beauty and wellness."
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