Tuesday , 22 October 2019

Cannabis Central: Marijuana-Infused Beverage Stocks Remain On Sale

Is history going to repeat itself with a new beverage sector – cannabis-infused drinks – that saw a stock like Monster Beverage Corp. (Nasdaq:MNST) go up 80,744% from $0.0688/share in August of 2002 to its closing price yesterday of $55.62/share?

Might similar “monster” gains be made by early entrants into this rapidly emerging market in the coming years? 

By Lorimer Wilson, editor of munKNEE.comA site for sore eyes and inquisitive minds!

I say “rapidly emerging market in the coming years” because experts predict that the global cannabis-infused beverage market will jump from its current value of $89M to $1.4B by 2023 and to over $4.4B by 2025.

Established major alcoholic beverage companies such as Molson Coors Brewing Company (NYSE:TAP), Anheuser-Busch InBev SA (NYSE:BUD) and Constellation Brands Inc. (NYSE:STZ) have either bought stakes in, or entered into joint ventures with, the likes of HEXO Corporation (NYSE:HEXO; TSX:HEXO), Tilray Inc. (Nasdaq:TLRY) and Canopy Growth Inc. (TSX:WEED; NYSE:CGC) but it’s usually innovative, early mover, smaller companies that benefit the most in these market breakouts.

Below are the 6 fledgling cannabis companies currently vying to become that next “monster”:

  1. Sproutly Canada Inc. (CSE:SPR) is working on formulating the first natural, completely water-soluble cannabis solution.
  2. The Tinley Beverage Company Inc. (CSE:TNY) has the only patent-pending liquid supplement that contains certifiable phyto-constituent-rich hemp oil.
  3. New Age Beverages Corp. (NASDAQ:NBEV) has renewed its 10-year licensing agreements with Bob Marley’s family.
  4. BevCann Enterprises Inc. (CSE:BEV; OTC:BVNNF) is bottling beverages using THC and CBD from both cannabis and hemp.
  5. Zenabis Global Inc. (TSX:ZENA; OTCM: ZBISF) has entered into an agreement with a Canadian beverage company that will supply Zenabis with cannabis-infused inputs.
  6. Dixie Brands Inc. (CSE: DIXI.U; OTCQX:DXBRF) has partnered with drink-maker AriZona to create a line of THC-infused beverages.

While the above 6 cannabis-infused beverage companies may be hoping to become the next “monster’ stock but they all have a long way to go, however, as the price direction of each company’s stock has been going down, not up, in recent months and September  was no exception:

  • Sproutly dropped 7.1% in September and has declined 58.9% from its peak earlier this year.
  • Tinley declined 16.9% in September and is down 44.9% from its high.
  • New Age was down 9.2% in September, down 62.4% from its peak.
  • BevCan was down 16.7% in September and is down 42.3% from its peak.
  • Zenabis dropped 10.4% in September and is now down 84.4% from its earlier peak price.
  • Dixie declined by 38.5% in September and has declined 64.6% from its peak.

The above stock performances are certainly not very impressive but, as poor as they are, on average their decline of 13.65% was considerably less than the 18.6% decline in the total marijuana sector.

Conclusion

With the December 16th legalization of edibles (which includes cannabis-infused beverages) in Canada, the above stocks, however, could be ideally positioned – and priced – to take full advantage of this new market when that occurs. Time will tell.

 

 

 

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