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.com – A 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”:
- Sproutly Canada Inc. (CSE:SPR) is working on formulating the first natural, completely water-soluble cannabis solution.
- The Tinley Beverage Company Inc. (CSE:TNY) has the only patent-pending liquid supplement that contains certifiable phyto-constituent-rich hemp oil.
- New Age Beverages Corp. (NASDAQ:NBEV) has renewed its 10-year licensing agreements with Bob Marley’s family.
- BevCann Enterprises Inc. (CSE:BEV; OTC:BVNNF) is bottling beverages using THC and CBD from both cannabis and hemp.
- 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.
- 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.
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.