Within the first quarter of legalization, 5.3 million or 18% of Canadian ages 15 years and older reported using cannabis, according to Statistics Canada. Following legalization, Canada reported a large spike in active users, as a year prior to legalization, just 14% of Canadian of Canadian reported using the plant. During the recent first quarter, approximately 646,000 of the users reported trying cannabis for the first time compared to 327,000 the same period a year ago. Predominantly, the rise is largely due to male users between the ages of 45 and 64, who primarily use cannabis for its therapeutic benefits to treat ailments such as chronic pain, cancer, Alzheimer’s, Parkinson’s, and epilepsy. Based on gender, a significantly larger amount of males used cannabis compared to females. It was estimated that 22.3% of Canadian males used cannabis, while only 12.7% females turned to the plant. Statistics Canada also reported that 29.5% of Canadians ages 15 to 24 years old used cannabis in the first quarter. Similarly, approximately 28.7% of Canadians ages 25 to 34-year-olds also used cannabis during the quarter. Overall, the number of active users has drastically increased over the past year, but it is important to note that the market is still continuing to mature. And despite having legalized cannabis entirely, the Canadian federal government still heavily monitors the market. As a result, many businesses have faced legal barriers, which have in turn negatively impacted their operations. Nonetheless, as the Canadian cannabis market continues to develop and expand, the industry is positioned to become a global driving force. Furthermore, with the second wave of legalization coming later in 2019, the market is expected to flourish even more going forward. According to data compiled by Verified Market Research, the global marijuana market was valued at USD 42.20 Billion in 2016. By 2025, the market is expected to reach USD 466.81 Billion while registering a CAGR of 35.3% from 2018 to 2025. BevCanna Enterprises Inc. (CNSX:BEV.CN), HEXO Corp. (NYSE:HEXO) (TSX:HEXO.TO), New Age Beverages Corporation (NASDAQ:NBEV), The Alkaline Water Company Inc. (NASDAQ:WTER) (TSXV:WTER.VN), Emerald Health Therapeutics, Inc. (OTC:EMHTF) (TSXV:EMH.VN)
Canada’s second wave of legalization is expected to legalize a variety of cannabis products, ranging from edibles to extracts to topicals. Health Canada has not released any comments on the matter, but the Canadian federal government mentioned that the legalization of alternative cannabis-based products is expected to occur no later than October 17th, 2019. Following the legislation later this year, Deloitte expects a large influx of new consumers and projects that edibles are expected to be the primary growth driver for the overall Canadian market, as edible and alternative cannabis-based products are expected to account for CAD 1.6 Billion of the total CAD 2.5 Billion marketplace. In particular, infused beverages are expected to deliver sales of CAD 529 Million. Meanwhile, topicals (CAD 174 Million), concentrates (CAD 140 Million), tinctures (CAD 116 Million), and capsules (114 Million) are also projected to greatly contribute to the broad market. In combination, the global market for alternative products is expected to double over the next five years, reaching USD 194 Billion. And specifically, cannabis infused beverages are becoming increasingly popular among consumers primarily because of the health benefits associated with the compound. Most cannabis beverage producers are using CBD or cannabidiol in their products, mainly because it does not cause psychoactive effects. However, there are certain beverages that are packed with THC or tetrahydrocannabinol, and are more catered to recreational users. Similar to other functional drinks like kombucha, CBD-infused beverages can alleviate a variety of medical conditions. For instance, studies have suggested that kombucha and CBD drinks can both prevent high blood pressure, heart disease, and cancer. Additionally, alcohol and soda producers are expected to be a major growth driver for the infused beverage marketplace. “We’re going to see this shift away from a culture which has had one legal psychoactive for social and leisure activities, being alcohol, to a culture where there’s now a second psychoactive that’s acceptable in those same situations,” says Dooma Wendschuh, Co-Founder and Chief Executive Officer of Toronto-based Province Brands. “For a lot of people it was a surprise when big alcohol became the first of any of those categories of companies (tobacco and pharmaceuticals) to jump into the cannabis industry. I don’t know why it was a surprise because when you think about it, there are three legal psychoactives in our world. You’ve got coffee, tobacco and alcohol, and two of those three are consumed as beverages.”
BevCanna Enterprises Inc. (CNSX:BEV.CN) announced yesterday that, “it has signed an exclusive agreement for marketing services with award-winning branding agency, Dossier Creative.
As disclosed in the Company’s prospectus dated June 20, 2019, available under BevCanna’s SEDAR profile at www.sedar.com, Dossier has agreed to provide branding and marketing services related to the development of beverage concepts and intellectual property, leadership consulting services, and studio services for creation of visual designs, marketing and sales materials, digital properties design and content messaging.
As part of the agreement with Dossier, world-renowned branding expert Don Chisholm has also joined the BevCanna team as Chief Brand and Innovation Manager. Mr. Chisholm co-founded the Vancouver-based design and innovation company and currently holds the role of Creative Director.
A leader in creating innovative brands and fostering growth, Mr. Chisholm leads BevCanna’s branding strategy as it launches a range of innovative, market-leading CBD and THC-infused beverages for both in-house brands and white-label clients.
‘Dossier’s expertise in creating beverage brands that resonate with consumers on a global scale will be invaluable as we build BevCanna into a global leader in infused innovations,’ said Marcello Leone, CEO of BevCanna. ‘Under Don’s leadership, Dossier has become an invaluable part of the BevCanna team, and we’re pleased to be expanding our relationship.’
A frequent speaker on brand strategy, innovation and creation, brand identity and packaging design, Mr. Chisholm also sits on the advisory boards of Yervana, Trace Beverages, TrueLeaf Medical, The Trading Post Brewing Company, and BevCanna. Recent high-profile brand successes include Vega, The Little Potato Company and Mike’s Hard Lemonade.
For more information on the Company’s agreement with Dossier, including all material terms of the agreement, see the Company’s prospectus dated June 20, 2019, available under BevCanna’s SEDAR profile at www.sedar.com.
The Company also announces its intention that on July 17, 2019, it will enter into a warrant amendment agreement with a third party warrant holder, whereby the parties will agree to amend the vesting date of 1,000,000 common share purchase warrants (the “Warrants”) to June 28, 2019 (the “Amendment”).
As disclosed in the Company’s prospectus, prior to the Amendment, the Warrants vest on the date on which the Company enters into a: (a) letter of intent, (b) memorandum of understanding or (c) definitive agreement with an unrelated third party company or person at arm’s length to both the Company and the third party warrant holder with respect to the construction or purchase of a cannabis extraction facility or similar major infrastructure or capital development project directly identified by or directly introduced to the Company by the third party warrant holder.
About BevCanna: BevCanna Enterprises Inc. (CNSX:BEV.CN) 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 per shift/per annum. BevCanna’s vision is to be a global leader in infused innovations.”
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HEXO Corp. (NYSE:HEXO) (TSX:HEXO.TO) is an award-winning consumer packaged goods cannabis company that creates and distributes prize-winning products to serve the global cannabis market. HEXO Corp. and Newstrike Brands Ltd. recently announced that they had entered into a definitive arrangement agreement under which HEXO will acquire, by way of a plan of arrangement under the Business Corporations Act (Ontario), all of Newstrike’s issued and outstanding common shares in an all-share transaction valued at approximately USD 263 Million. The Transaction gives HEXO the capacity to produce approximately 150,000 kg of high-quality cannabis annually. The Transaction also provides HEXO access to four cutting-edge production campuses totalling close to 1.8 million sq. ft. of near-term cultivation space and diversified growing and production techniques. This is in addition to HEXO’s 579,000 sq. ft. facility for a manufacturing and product development centre of excellence in Belleville, Ontario. Combined, HEXO and Newstrike have established distribution agreements in 8 provinces including Ontario, Quebec, British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, and Prince Edward Island, allowing broad consumer access to HEXO’s products across Canada. Newstrike’s licensed indoor facility provide HEXO with access to diversified growing techniques and positions HEXO for flexibility for international exports as global cannabis markets continue to open. “We’re thrilled to welcome the Newstrike team into the HEXO family. Jay Wilgar (Chief Executive Officer of Newstrike) and his team have built incredible relationships, including teaming up with The Tragically Hip, and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere,” said Sebastien St-Louis, Chief Executive Officer and Co-Founder of HEXO Corp. “With Newstrike, we’re adding talented employees and infrastructure to take HEXO to the next level on our journey to become one of the largest cannabis companies in the world. We’re extremely proud of our record of execution, and today are committing to achieving over USD 400 Million in net revenue in 2020.”
New Age Beverages Corporation (NASDAQ:NBEV) is a Colorado and Utah-based healthy products company dedicated to inspiring and educating consumers to “live healthy.” New Age Beverages Corporation recently expanded its Marley brand licensing agreements with companies owned by the family of Bob Marley and Docklight Brands, Inc., to include expansion to new global markets and the addition of new product types, including cannabidiol (CBD) infused shots. New Age and the Marley companies recently extended the licensing agreement on the Marley brand for an additional 10 years, and emplaced a new advisory agreement with the family to help promote and build awareness of the entire Marley portfolio. In light of rapidly opening global opportunities with CBD, New Age has now also expanded their previous agreement with Docklight Brands. The expanded Docklight agreement extends to four additional countries, the current geographies in which New Age is working with major distributors and retailers to effectuate launch of Marley+CBD ready to drink beverages. The newly expanded agreement also covers all of the United States with products to be launched concurrent with the easing of the regulatory landscape, while also opening up expanded market access in the initial international markets. Damian Marano, Chief Executive Officer for Docklight Brands, commented, “Since forming the partnership with New Age in January, we have been all systems go for launch of the Marley Mellow Mood + CBD brand. We believe we have an outstanding product that retailers and consumers will love. We are thrilled to expand our relationship with New Age to take on the world.”
The Alkaline Water Company Inc. (NASDAQ:WTER) (TSXV:WTER.VN) has developed an innovative, state-of-the-art, proprietary electrolysis process that produces healthy alkaline water for a balanced lifestyle. The Alkaline Water Company Inc., with products bottled under the trademark Alkaline88®, recently announced that its wholly-owned subsidiary, A88 Infused Beverage Division, Inc., had entered into an exclusive formulation, development, and supply agreement with American Nutritional Products Inc. (“ANP”), headquartered in Carson City, Nevada. This Agreement solidifies the Company’s ongoing relationship with ANP to finalize the formulations for the Company’s Cannabinol (CBD) and infused products. ANP has agreed to initially develop 5 to 7 functional waters including 3 to 4 in the CBD area and 2 to 3 in the vitamin and antioxidant segment. Each will be uniquely formulated to match both consumer demands and taste profiles. Under the terms of the Agreement, A88 Infused will be granted the exclusive right to products developed by ANP, which will be used in the development of the Company’s new line of infused beverages. “For over 25 years, Maria Watson, President and Chief Executive Officer of ANP, has been an industry leader in the nutraceutical world. Her formulation team has over 40 years of experience in the development and marketing of infused beverages containing CBD, nutraceuticals, and organic flavoring, making them an ideal partner to work with in the development of our new line of products. We both recognized the synergies of our companies and this agreement was a logical extension of our recently signed co-packing agreement. The depth of knowledge and expertise provided by ANP will ensure that A88 Infused is able to introduce some of its infused beverages to market by the end of this calendar year,” stated Richard A. Wright, President and Chief Executive Officer of The Alkaline Water Company.
Emerald Health Therapeutics, Inc. (OTCQX:EMHTF) (TSXV:EMH.VN) is a Canadian licensed producer of cannabis. Emerald Health Therapeutics, Inc. recently reported that it has expanded its agreement to purchase harvested hemp flower and leaf, or hemp chaff, from Emerald Health Hemp Inc. (“EHH”) from 1,000 to 1,200 acres for 2019. EHH is a wholly owned subsidiary of Emerald Health Sciences Inc. and a related party of Emerald. Based on last year’s harvest, Emerald expects production from the 1,200 acres to be at least 270,000 kg of hemp chaff in 2019 with, conservatively, approximately 2% cannabidiol (“CBD”) content. Emerald estimates that this hemp may yield 3,500 kg of extracted CBD, which it plans to use to manufacture premium oils, softgels and associated value-added products for Canadian adult-use and medical consumers. Emerald has also formed Emerald Health Therapeutics Hemp USA Inc., a wholly owned subsidiary of Emerald Health Therapeutics, which will seek to establish strategic supply agreements with US-based hemp farmers as well as explore opportunities to export its Canadian hemp-derived CBD products to the US. “CBD, despite being non-psychoactive, currently cannot legally be added to food, beverage or dietary supplement products under US Food & Drug Administration (“FDA”) rules. However, with the FDA’s recent initiation of its CBD policy review, we believe there is potential that in time federal US rules will permit CBD-infused products,” said Allan Rewak, VP Communications and Stakeholder Relations. “Emerald intends to maximize every opportunity that becomes allowable.”
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