Increasing Acceptance Leads to Massive Opportunity for Smart Companies in CBD Space

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Dec 10, 2020, 08:30 ET

NEW YORK, Dec. 10, 2020 /PRNewswire/ -- CBD is now legal in all 50 states, and on election day this year, four states voted to legalize the recreational use of cannabis, bringing the total of states allowing recreational cannabis use to 15. This growing acceptance has fueled an influx of new CBD-infused products and brands, leading a Lido Consulting report to note that the total addressable cannabis market (TAM) could potentially hit $1 trillion in global economic impact by 2027. Savvy companies recognize the bright promise of this burgeoning industry and are focused on taking advantage of the massive opportunity. Leading the pack is The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) (Profile), which entered the CBD space with the launch of its A88CBD(TM) brand. Alkaline Water, which already had a nationally recognized line of premium bottled water and flavor-infused water, now offers a full line of CBD-infused and topical products. Others strengthening their positions in the space include Tilray Inc. (NASDAQ: TLRY), which through its wholly owned subsidiary High Park, has a portfolio of "Cannabis 2.0" brands and products. In addition, in a joint venture with Tilray, Anheuser-Busch InBev SA (NYSE: BUD) has announced plans to commercialize non-alcohol, CBD-infused beverages in Canada. And just last month, Aphria Inc. (NASDAQ: APHA) (TSX: APHA) announced the expansion of its 510 Vape offering across its award-winning adult-use brand portfolio. Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) recently launched its Select Nano Gummies in California and its line of Select Elite Live cartridges in Nevada.

Projected trillion-dollar market presents compelling opportunity for companies prepared in the space.
With already-established high standards in place, WTER guarantees that its A88CBD products are unmatched.
The company just added five category-leading items to its A88CBD line, the perfect complement to its existing product lineup.

Click here to view the custom infographic of The Alkaline Water Company Inc. editorial.

A Compelling Opportunity

In its report, Lido Consulting noted the following: "Pause to consider . . . a $1 trillion market in eight years while currently there is not a single company in the space that generates anywhere close to $500 million in revenue. That fragmentation, and the wholly unique phenomenon that a black market with an existing — and massive — consumer and patient base is transitioning to a regulated market, is what makes cannabis such a compelling opportunity."

The already-high demand has only increased in the past year, with the COVID-19 epidemic sparling stronger online sales. In fact, a recent ASD Market Week article reported that every dollar spent on email marketing in the CBD industry brought in in almost $40 in revenue. That aligns with Brightfield Group research indicating that roughly one-third of CBD consumers surveyed plan to buy from online retailers rather than in-store during the pandemic, while nearly 50% plan to stock up on supplies if it looks like there will be a shortage.

Clearly, the sector offers opportunity for smart companies to offer a comprehensive line of CBD-infused and topical products — and emerge as a trusted brand. Who better to rise to the challenge than an already recognized beverage leader that has clearly established its ability to deliver on consumer needs and market opportunities?

Meeting Rigorous Requirements

The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) has worked hard to build a national reputation as a well-respected beverage brand, and the transition to becoming a similar presence in the CBD space has been seamless. With already-established high standards in place, WTER guarantees that its A88CBD products are formulated in GFM facilities; use the highest-quality, lab-tested CBD from a trusted source; and follow rigorous quality control measures to establish consistency.

These rigorous requirements will become even more essential as CBD becomes more mainstream, attracting a new products and brands to the space. Major players are eager to to add quality CBD products to their offerings, but these distributors have strict requirements. Smaller cannabis producers and brands with limited resources may be unable to produce products that meet those demands, but The Alkaline Water Company is already doing so.

As a trusted brand, WTER and its leading A88CBD brand provide exactly what retailers are demanding: superior quality topicals, oils, capsules, tinctures and gummies.

Capturing Share in $20-Billion Market

The Alkaline Water Company is clearly committed to its best-in-class A88CBD line; the company just launched five category-leading items. "These products, which include our delicious lemon-lime CBD water, vegan gummies, zero-calorie powder packs, all-natural bath bombs and cruelty-free deep relief cream, complement our existing product lineup," said WTER president and CEO Richard A. Wright. "Our robust product lineup effectively positions us to capture share in the estimated $20 billion-plus, hemp-derived consumer products market."

Focused on capturing as much of the growing market as possible, WTER is committed to grow both its online and in-store presence. A88CBD products are currently available in approximately 400 retail locations, including Elevated Wellness CBD, CBD Emporium, Alchemist Kitchen, Pure CBD, and select Vitamin Plus locations. Online, A88CBD products can be found on WTER's direct-to-consumer e-commerce site at www.A88CBD.com; the products are also available at Amazon, CBD.co, healwithnature.com and DirectCBDOnline.com.

Developing both a vibrant online presence and robust retail locations is a priority for WTER as it works to increasing sales in the CBD space. With that in mind, Wright explained that the company is planning to continue to grow its online presence through unique digital marketing strategies and leverage its existing brick-and-mortar footprint for its A88CBD portfolio of products.

"We are in active discussions with over 9,000 retail locations to take on our products over the coming 90 days," he said during the Q2 financial webcast. "With an in-demand portfolio of offerings, a strong partner network, and an established retail base, we are taking aggressive actions to capture share in the large and growing retail trades we currently serve and greenfield opportunities in the CBD and hospitality and foodservice arena. Additionally, our e-commerce sites continue to exceed our expectations and provide another growth area driven by shifting consumer behaviors. We also expect the multi-year health and wellness trend to accelerate coming out of the COVID pandemic and anticipate our lifestyle brands to benefit due to our sales and marketing efforts made this year."

A Strong Candidate Fills Unique Niche

WTER's impressive A88CBD product line is only one piece of The Alkaline Water Company's strategic business puzzle. The company's flagship product, Alkaline88(R), is one of the strongest performers in the beverage world, and the company continues to report record sales. "Our family of brands — Alkaline88, A88 Infused and A88CBD Infused — include a growing portfolio of products that are in demand and resonate with consumers," Wright said.

A recent "Proactive Investor" article observed that "well-financed suitors may well be interested in the Alkaline Water Company given its unique niche. After all, a Neilson report ranked Alkaline88 as 'one of the fastest growing' value-added waters in 2019. It also noted that the company has built a 'national retail footprint' and extended its lifestyle brands into other consumer packaged goods categories."

WTER's stability and commitment to quality, along with its distinctive variable-cost business model and strong portfolio, make the company a strong prospect for major players in the beverage or cannabis space that are may be looking to strengthen their position in these key sectors.

Evaluating the Opportunities

With a trillion-dollar industry projection as a backdrop, it's no wonder that other companies besides WTER are also evaluating the opportunities.

Tilray Inc.'s (NASDAQ: TLRY) new High Park portfolio additions for Canada in 2020 include edibles, confectionery goods, CBD beverages and more, expanding High Park's existing broad-based portfolio of brands and products. The additions feature new confectionery brand Chowie Wowie(TM), new wellness brand Rmdy(TM), and new beverage brand Everie, developed by Fluent. In addition, the line brings U.S. brands Marley Natural(TM) and Goodship(TM) to the Canadian market. High Park's team of brand leaders and R&D experts have worked rigorously to deliver to consumers best-in-class cannabis products that meet the highest standards of safety and quality as required by Health Canada.

Anheuser-Busch InBev SA (NYSE: BUD) has announced a joint venture with Tilray to commercialize non-alcohol, CBD-infused beverages in Canada once regulations allow. The joint venture will operate under the Fluent Beverage Company. AB InBev is participating in the partnership through its subsidiary Labatt Breweries of Canada, one of the country's founding businesses and its leading brewer. Tilray is participating through its Canadian adult-use cannabis subsidiary High Park Company.

Aphria Inc.'s (NASDAQ: APHA) (TSX: APHA) expansion of its 510 Vape offering strengthens the company's commitment to inspire and empower the worldwide community to live its best life. Each Aphria vape is designed with a unique offering to meet the demands of a diverse consumer segment. "Since day one we have been committed to strategically developing an award-winning brand portfolio that resonates with Canadians, provides exceptional patient and consumer experiences, and competes against the illicit market," said Aphria CEO Irwin D. Simon. "We believe the strength of our brands remain unmatched in the industry and are excited to expand 510 vapes across our brand portfolio, including Broken Coast's first cannabis 2.0 product."

Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) is continuing its Western expansion of Select brand products. With the launch of its gummies in California and cartridges in Nevada, Curaleaf now offers products in 12 states. "The latest product expansion of Select in California and Nevada speaks to Cureleaf's commitment to providing both medical patients and adult-use customers with accessibility to innovative, high-quality cannabis products," said Curaleaf president Joe Bayern. "We are thrilled to bring Select's scientifically formulated Nano Gummies and Elite Live to both states as we expand our portfolio and provide entry points for new consumers."

The wave of acceptance for cannabis, and specifically CBD, isn't likely to ebb, as a growing number of consumers look for superior products that provide life-changing benefits. Companies leading the way in the space will only benefit as the trillion-dollar mark grows closer.

For more information about The Alkaline Water Company, please visit The Alkaline Water Company.

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