The Biggest Risk Factor to the Alcohol Industry is CBD
Palm Beach, FL – September 9, 2019 – CBD has been one of the most disruptive forces to major multi-billion-dollar industries, including alcohol. In fact, big companies have been warning about this for quite some time. For example, in a 2018 Molson Coors’ annual shareholder report, the company listed cannabis among the biggest possible risks to its business. “Although the ultimate impact is currently unknown, the emergence of legal cannabis in certain U.S. states and Canada may result in a shift of discretionary income away from our products or a change in consumer preferences away from beer. As a result, a shift in consumer preferences away from our products or beer or a decline in the consumption of our products could result in a material adverse effect on our business and financial results.” That’s just part of the reason companies like Anheuser-Busch InBev announced a partnership with Tilray to research non-alcoholic beverages infused with THC and CBD. Constellation Brands invested $4 billion in Canopy Growth Corporation. Molson Coors agreed to a joint venture with The Hydropothecary Corporation. Heineken subsidiary Lagunitas even just partnered with cannabis company AbsoluteXtracts. As CBD continues to disrupt the industry, it’s creating a wide range of opportunity for companies such as XPhyto Therapeutics Corp. (CSE:XPHY), Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), Aurora Cannabis Inc. (NYSE:ACB)(TSX:ACB), Constellation Brands Inc. (NYSE:STZ), and HEXO Corporation (NYSE:HEXO)(TSX:HEXO).
XPhyto Therapeutics Corp. (CSE:XPHY) BREAKING NEWS: XPhyto Therapeutics Corp. just announced that its wholly owned German subsidiary, Bunker Pflanzenextrakte GmbH has entered into an exclusive cannabis research and development agreement with the chair of brewing and beverage technology at the Technical University of Munich, School of Life Sciences Weihenstephan. “Given the commercial potential for CBD infused beverages in Europe, XPhyto is very pleased to have secured such a strong development partner right here in Bavaria,” said Robert Barth, VP European Corporate Development, XPhyto and Managing Director, Bunker. “We are excited to work together and we are particularly looking forward to the development of cannabis infused fermented beverages and sports drinks.”
Pursuant to the Agreement, initial research will focus on the identification and development of new research approaches targeting potential commercial applications for the use and inclusion of cannabis plants, parts thereof, or derived ingredients, active ingredients and flavors for the production of beverages, food and dietary supplements. Preliminary testing will include analysis of the chemical-physical suitability of the cannabis derived materials for use in various food and beverages. Specific cannabis applications with prospective commercial viability will be pursued via separate joint research projects on a case-by-case basis. The chair of brewing and beverage technology has a well-earned reputation for expertise in the field of food and beverage science with an emphasis on commercial applicability. The institution has a specific focus on flavor-process-engineering, raw material and product design, food safety, and relevant legislative issues, such as EU designated “novel foods.”
Other CBD-related developments from around the markets include:
Canopy Growth Corporation (TSX:WEED)(NYSE:CGC) just announced that it has received a license from Health Canada for its KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan. Including the Smiths Falls site and the recently licensed BC Tweed extraction site, Canopy Growth now operates three significant extraction assets to support the throughput required for large scale value-add product development. Canopy Growth recently retrofitted the now fully licensed KeyLeaf facility in Saskatchewan, a company with over 50 years of experience in the extraction industry. This facility is expected to be online in the Fall of 2019 and has the capacity to extract up to 5,000 kilograms of hemp or cannabis biomass per day. The application for the license was submitted under KeyLeaf’s previous name, POS Management Corp. and will be updated in due course. The newly licensed extraction platform is located in close proximity to Canopy Growth’s large-scale outdoor hemp and cannabis grow operations. The Company looks forward to the additional capacity increasing production efficiency, augmenting output volume, and ultimately reducing operational costs for value-add products set to be rolled out in the Canadian recreational and medical markets at the end of calendar year 2019. “With this milestone, we are executing against the vision of making strategic investments today in order to deliver results over the long term,” said Mark Zekulin, CEO, Canopy Growth. “This license will ensure we have the supply of extraction inputs for the medical, CBD, and recreational markets, especially the next generation of value-add, high margin cannabis products here in Canada.”
Aurora Cannabis Inc. (NYSE:ACB)(TSX:ACB) just announced the completion of the previously announced plan of arrangement with Hempco Food and Fiber Inc. pursuant to which Aurora has acquired all of the issued and outstanding common shares of Hempco not already owned by Aurora, reflecting a valuation of approximately C$63.4 million on a fully diluted basis. Hempco is now a wholly-owned subsidiary of Aurora. The Hempco Shares will be delisted from the TSX Venture Exchange, and Aurora will apply to the relevant securities commissions for Hempco to cease to be a reporting issuer under Canadian securities laws. Hempco provides Aurora with access to low-cost, high-volume raw hemp material for the extraction of primarily cannabidiol and other cannabinoids, which is gaining recognition for potential health benefits across a wide range of applications. Aurora identified the potential of hemp-derived CBD early on, completing its first investment in Hempco in 2017, and has subsequently expanded its hemp-based infrastructure through targeted acquisitions and strategic partnerships, creating Aurora Hemp: an integrated operating unit executing the Company’s Global Hemp Strategy. With expertise across genetics, extraction, product development, brands and distribution, Aurora Hemp is an end-to-end offering across the entire hemp value chain.
Constellation Brands Inc. (NYSE:STZ) announced it will report financial results for its fiscal second quarter ended August 31, 2019, on Thursday, October 3, 2019, before the open of the U.S. markets. A conference call to discuss the financial results and outlook will be hosted by President and Chief Executive Officer Bill Newlands and Executive Vice President and Chief Financial Officer David Klein at 10:30 a.m. EDT, October 3, 2019.
HEXO Corporation (NYSE:HEXO)(TSX:HEXO) just announced that its dried flower cannabis products are now available to Ontario consumers, after finalizing terms with the Ontario Cannabis Store (OCS). HEXO now adds nine of its dried flower offerings in both 3.5g and 15g SKUs to the OCS, including the Company’s award-winning Helios dried flower, which was named Best Sativa at the O’Cannabiz 2019 Industry Awards. “We are thrilled to increase our offering at the OCS,” said HEXO Corp CEO and co-founder, Sebastien St-Louis. “Apart from being our nation’s most populous province with the highest demand for cannabis products, the Ontario marketplace is among the most competitive—and we are rolling out high quality products to which we believe Ontario consumers will strongly gravitate.”
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