2020 was staged to be the breakout year for cannabis infused beverages. Venture capital investment was flowing in, industry pros were lining up to get into the cannabis beverage space, and several well-known cannabis and beverage manufactures were teasing product launches.
But then Covid happened.
Companies that had been in various stages of cannabis beverage development hit the brakes to focus their efforts on existing product lines rather than venturing into uncharted territory.
The anticipated easing of federal regulations failed to manifest as lawmakers had more pressing issues to address, and with that, research and development onto many cannabis infused products stalled.
But as the world shakes off the Covid cobwebs, 2021 looks like it’s shaping up to be the breakout year for cannabis infused beverages that 2020 was supposed to be.
Investors ready to say yes to a round should be keeping an eye on cannabis beverage stocks. One company to watch right now is BevCanna Enterprises Inc. (CSE: BEV, OTCQB: BVNNF, FSE: 7BC), a Canadian cannabinoid infused beverage and supplement manufacturer that is primed for growth as the cannabis beverage sector takes off.
Pre pandemic, cannabis infused beverages represented only a fraction of total cannabis sales in Canada. However, since 2020, that share has rapidly been increasing. According to the latest numbers from analytics firm Headset, the cannabis infused beverage market has grown to 4.5% of cannabis sales in Canada and climbing.
So, how hot is the Canadian cannabis infused beverage market expected to get post-Covid? Data from Statista predicts that demand for beverages infused with THC will grow from 242.3 million USD in 2018 to 579.2 million USD by 2025.
In the US, the legalization of both medicinal and recreational cannabis use has gained significant momentum, thanks in part to support from the Biden administration and narrow democratic majority in both the house and senate. With easing federal restrictions and state backing, the market for cannabis infused beverages in the US could reach 14,600 million USD by 2026.
Globally, the US is expected to be the single largest consumer of cannabis infused products, including beverages. Canadian companies are wasting no time preparing for US market penetration, with a recent string of strategic acquisitions and mergers.
In the latest collaboration to hit the cannabis infused beverage market, leading US cannabis beverage company Keef Brands has taken an equity position in Canada’s BevCanna Enterprises Inc. (CSE: BEV, OTCQB: BVNNF, FSE: 7BC).
Keef Brands is currently the highest-grossing company in the US cannabis beverage space. With eight of the top ten-selling cannabis beverages in Colorado and two top bestsellers in California under its label, Keef ranks first among US cannabis beverage companies both in terms of sales and volume.
This mutually beneficial deal will see BevCanna acting as the exclusive licensee, manufacturing, and distribution partner for Keef Beverages in Canada. At the same time, BevCanna looks to gain a competitive advantage in the US cannabis beverage market with its own ready-to-launch house beverage brands, leveraging Keef’s extensive network of over 1,000 distributors and retailers.
As the regulatory environment in the US continues to become more favourable towards recreational cannabis use, cannabis beverage stocks are poised for takeoff. A recent report found that one in four cannabis users would be willing to try cannabis infused beverages, and 28% of those who had already tried them said they would buy again.
BevCanna is well-positioned to cash in on the increasing demand for cannabis infused beverages with both national and US manufacturing and distribution capabilities.
Already the highest-grossing cannabis infused beverage in the U.S., Keef will now be entering the Canadian cannabis beverage space, and BevCanna will be the exclusive distributor. BevCanna will begin rolling out Keef products across Canada over the next two quarters.
“We’re extremely pleased with the confidence that Keef has shown in both BevCanna’s future prospects and in our mutual relationship,” said BevCanna chief strategy officer John Campbell via a news release. “We see a great future for the two companies working together, with both companies benefiting from the other’s market expertise and distribution networks, and we’re happy that Keef sees the same potential.”
Under the deal, BevCanna will provide 182,500 common shares at 70 cents per share in return for BevCanna’s principal amount of Keef Brands’ existing convertible debenture previously issued to BevCanna on April 30, 2020, which is convertible to shares of Keef.
Learn more about BevCanna’s goal of building its beverage industry empire here!
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