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Why Are Beverage Companies So Interested in Cannabis? -- CFN Media

August 28, 2018

SEATTLE, Aug. 28, 2018 (GLOBE NEWSWIRE) -- CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces publication of an article discussing The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF), one of the most popular Canadian licensed producers, and its plans to become a leader in the cannabis beverage space with the establishment of its Beverage Science and Research Division.

There has been a lot of speculation about whether the legal cannabis industry could cannibalize alcohol sales as consumers become more comfortable with the idea of cannabis-infused beverages. Additionally, the high-growth functional foods/nutraceutical space offers lucrative potential for more health-oriented cannabis concoctions. Over the past couple of years, these dynamics have translated into billions of dollars worth of concrete investments by leading beverage giants into cannabis companies. The arms race shows little signs of slowing, which could open the door for investors in the space.

Beverage Giants Build a Stake

Constellation Brands Inc. purchased a 9.9 percent stake in Canopy Growth Corp. in late 2017 to develop and market cannabis-infused beverages. The company increased its stake to 38 percent in August 2018 with a US$3.88 billion investment and the right to invest another US$3.4 billion to acquire a controlling stake—significant numbers given Canopy Growth’s modest US~$60 million in revenue.

At the same time, Molson Coors Brewing Co. announced a joint venture with The Hydropothecary Corporation to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. Under the terms of the agreement, Molson Coors Canada, the company’s Canadian arm, will have a 57.5 percent controlling interest in the joint venture with HEXO controlling the remainder.

Several other beverage companies have started creating their own cannabis-related products without such deals in place. For example, Lagunitas Brewing Company introduced an IPA-inspired sparkling water infused with tetrahydrocannabinol (THC) and/or cannabidiol (CBD)—called Hi-Fi Hops. Province Brands is even brewing the entire cannabis plant—stalks, stems, and everything—in a way that’s better tasting than a traditional beer.

While some of these companies are worried about cannabis cannibalizing beer sales, others are simply focused on entering a related market. Both beer and cannabis are highly regulated products and there are a lot of potential synergies between the two businesses—perhaps more so than the tobacco industry. And, that could spur further investment in the cannabis beverage space in the form of both M&A and organic investment.

The Green Organic Dutchman is a Leader

The Green Organic Dutchman Holdings Ltd., one of the most popular Canadian licensed producers, plans to become a leader in the cannabis beverage space with the establishment of its Beverage Science and Research Division. With 40,000 kilograms of dried cannabis dedicated for beverage products each year, and the appointment of Prem Virmani as the division chair, the company’s beverage platform is second to none.

“We are focused on becoming the Whole Foods of the cannabis industry and recognized as pioneers in the THC/CBD infused beverage industry,” said TGOD CEO Brian Athaide in a letter to shareholders published on July 9, 2018. “Our team has over 125 years executive experience in consumer-packaged goods, beverage, and beverage alcohol, more than any other company in the industry.”

Prem Virmani, who leads the company’s beverage division, is the former senior vice president of global science and research for Cott Beverage Inc., a division of Cott Corp. Other members of the company’s leadership team have worked for Procter & Gamble Co., Weight Watchers International Inc., and other global companies involved in the food and beverage space.

The company is also unique in that it only produces premium organic cannabis and works closely in partnership with Aurora Cannabis Inc. After completing the largest IPO in cannabis industry, raising $123.1 million, the company became the single largest holding in the only cannabis-focused exchange-traded funds and has over 170,000 kilograms per year of funded capacity for the potential for 195,000 kilograms per year in the near future.

Significant International Distribution

The Green Organic Dutchman is not limiting its plans to Canada, or even North America for that matter. TGOD recently acquired HemPoland, a leading European manufacturer and marketer of premium organic CBD products. In terms of international expansion, HemPoland’s established distribution network throughout Europe is a key to the deal. Buying the distribution (over 700 locations) and the ecommerce platform helps TGOD set the stage for future introductions of products to the European market, including those products developed by the Beverage Science and Research Division.

Looking Ahead

There’s no doubt that the cannabis beverage industry is poised for expansion and The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF) is in prime position to capitalize. Investors interested in the space may want to take a closer look at the company as it builds out its well-capitalized beverage division, while also keeping an eye on larger beverage companies that could make strategic acquisitions in the space.

Please follow the link to read the full article: http://www.cannabisfn.com/beverage-companies-interested-cannabis/

About CFN Media

CFN Media (CannabisFN) is the leading agency and financial media network dedicated to the global cannabis industry, helps companies operating in the space attract investors, capital, and publicity. Since 2013, private and public cannabis companies in the US and Canada have relied on CFN Media to grow and succeed.

Learn how to become a CFN Media client company, brand or entrepreneur: http://www.cannabisfn.com/featuredcompany

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Disclaimer

CannabisFN.com is not an independent financial investment advisor or broker-dealer. You should always consult with your own independent legal, tax, and/or investment professionals before making any investment decisions. The information provided on http://www.cannabisfn.com (the ‘Site’) is either original financial news or paid advertisements drafted by our in-house team or provided by an affiliate. CannabisFN.com, a financial news media and marketing firm enters into media buys or service agreements with the companies that are the subject of the articles posted on the Site or other editorials for advertising such companies. We are not an independent news media provider. We make no warranty or representation about the information including its completeness, accuracy, truthfulness or reliability and we disclaim, expressly and implicitly, all warranties of any kind, including whether the Information is complete, accurate, truthful, or reliable. As such, your use of the information is at your own risk. Nor do we undertake any obligation to update the items posted. CannabisFN.com received compensation for producing and presenting high quality and sophisticated content on CannabisFN.com along with financial and corporate news.

The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: http://www.cannabisfn.com/legal-disclaimer/

CFN MediaFrank Lane206-369-7050flane@cannabisfn.com

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