September 30, 2021 -- InvestorsHub NewsWire -- NetworkNewsWire
Editorial Coverage: It should come as no surprise that one of
the strongest trends in the health care space is the rising wave of
natural wellness and natural alternatives categories. While the
COVID-19 pandemic may have accelerated the momentum, the movement
had begun well before people around the world were sent home, where
self-care and well-being became watch words. A natural extension of
this focus on self is cannabis, as growing research seems to
support the potential benefits this natural plant may provide.
Dubbed cannabis 3.0, the next phase of cannabis market maturation
features exciting innovation, high-quality offerings and growing
investor interest in a space with seemingly unlimited potential.
Companies already operating in the space are taking a close look at
the opportunities to identify their next best
move. BevCanna Enterprises Inc. (CSE: BEV)
(OTCQB: BVNNF) (FSE: 7BC) (Profile) has chosen to expand and
diversify its business, moving from a high-capacity cannabis
beverage company into a compelling health and wellness company
through a number of accretive acquisitions. Other companies making
significant moves in the world of cannabis include Canopy Growth Corporation (NASDAQ:
CGC), Tilray Inc. (NASDAQ:
TLRY), Cresco Labs Inc. (CSE: CL) (OTCQX:
CRLBF) and Curaleaf Holdings Inc. (CSE: CURA) (OTCQX:
CURLF).
- A recent report estimates the 2021 market will reach $19.89
billion with 27% CAGR projected as the sector moves forward.
- After two milestone acquisitions, BevCanna now boasts two
cannabis-related licenses and a global presence in natural wellness
markets.
- BevCanna operations include a 40,000-square-foot,
state-of-the-art beverage production facility with annual capacity
of 210 million bottles.
- Its Embark Health acquisition gives BevCanna added revenue, IP
and a second production facility to increase its asset base to more
than $100 million.
Click here to view the custom infographic of
the BevCanna Enterprises Inc. editorial.
Cannabis 3.0 on the Horizon
A recent Quince
Market Insights reports that the global cannabis market
appears ready to take off, “attributed to the rising awareness
among customers concerning the health advantages of cannabis and
its increasing medical application.” The report estimates the 2021
market will reach $19.89 billion and forecasts that the sector is
now positioned to see 27% compound annual growth.
Cannabis 1.0 was the legalization of cannabis, followed by 2.0,
which involved the introduction of derivatives such as edibles and
other consumables into an eager market. With cannabis 3.0 and U.S.
legalization on the horizon, cannabis is gaining popular acceptance
with consumers introducing it into their everyday lives, as a
component in mainstream products in everything from drinks and
pharmaceuticals to personal hygiene and beauty products.
Such widespread application has created the undergirding
for market activity as smart companies strategically plan for
the future. In the hustle, BevCanna
Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) (FSE:
7BC) has emerged as a leader, diversifying its already
strong operations in accretive acquisition activity involving a
range of wellness brands and companies designed to expand both its
product offerings and manufacturing capabilities. This deliberate
expansion has included new channels such as direct to consumer
e-commerce, high-growth adult-use cannabis products, hemp-derived
CBD products, and wellness-focused non-cannabis products bridging
the intersection of two of the fastest-growing consumer categories:
wellness and cannabis.
BevCanna’s growth has been carefully led by executives with
decades of expertise in creating, branding, and manufacturing
iconic brands. These veteran players boast resumes touting
positions of leadership at such well-known entities as Rogers, Best
Buy, SC Johnson, Walmart, Pepsi, Costco, Colgate, and more.
In addition to its distinguished executive team, BevCanna’s
portfolio is equally compelling. The company owns in-house brands
Anarchist Mountain, Pure Therapy and the innovative TRACE water
& supplement brand, along with partner brands Keef Brands. As
the nation progresses in both popular acceptance and government
support, the Keef collaboration offers exposure to more than 1,000
U.S. dispensaries. On top of that, with the acquisitions of Naturo
Group and Pure Therapy wrapped up, BevCanna completed another
company-maker-type of deal.
Expanding into Wellness
BevCanna began its expansion into the wellness space in November
2020 when it initially announced its plans to purchase Naturo
Group, a partner company since 2017. The acquisition resulting in
the addition of an estimated $38 million in assets, including a
40,000-square-foot, state-of-the-art, HACCP-certified beverage
manufacturing facility with capacity of 210 million bottles
annually in PET/RPET, aluminum and glass formats; a pure alkaline
spring water source located onsite; 315 acres of outdoor
cultivation possibility; and proprietary Health Canada-approved
fulvic and humic plant-based mineral formulation.
The land and alkaline spring water source alone are valued at
more than $28
million, a true value proposition for a company with a market
capitalization around $56 million. Along with that, BevCanna has
also obtained requisite government approval to expand its facility
to 170,000 square feet for CPG and cannabis purposes.
Through the Naturo Group
acquisition, BevCanna added the TRACE brand to its growing
portfolio. The leading mineralized water and supplement brand is
sold in more than 3,000 Canadian retail locations, with active
expansion into the U.S. market with initial efforts focused on
California, Illinois and New York. Fulvic acid has gained popular
anecdotal attention as a natural supplement and immune system
enhancer for warding off a variety of diseases and
conditions such as allergies, eczema and even Alzheimer’s
disease. In addition, the Naturo Group’s product catalog features a
diverse array of alkaline and natural spring waters, plant-based
mineral concentrate and mineralized shots and more.
A U.S. Head Start
The Naturo Group acquisition had followed on the heels of
BVNNF’s announcement that it planned to acquire Pure
Therapy, a natural health product company known for
meticulously crafted goods, including nutraceutical and hemp-based
cannabidiol products, through its e-commerce platform across North
America and Western Europe. Pure Therapy had a base of
approximately 23,000 customers at the time; BevCanna has already
increased that customer base by about 15%, adding 3,270 new active
customers. The company is also working to accelerate growth by
capitalizing on the decades of marketing expertise that the Pure
Therapy offers.
BVNNF has a forward-looking strategy in place that includes
plans to add its own nutraceuticals and CBD product line to the
global health and wellness market, with a focus on the growing U.S.
CBD space. Through its Pure Therapy lines and its partnership with
Keef Brands, a top U.S. cannabis-infused beverage company, BevCanna
appears to have a head start in those efforts.
Working on Advancements
The company is working on other advancements too. BevCanna
signed on the line to enter a definitive agreement to acquire
Embark Health Inc. The all-stock, C$21-million transaction valued
BEV stock at C$0.45, a 33% premium to the average price of the
stock for the five days leading into the deal being disclosed.
Embark brings extensive manufacturing and intellectual property
assets related to high-end solventless cannabis extracts such as
bubble hash, traditional pressed hash, rosin, dry sift and its
best-selling Hazel Hash Stick. Embark also increases BevCanna’s
capacity to manufacture cannabis concentrates, liquids, powder
beverage mixes, topicals and edible products. In addition, in the
last three months Embark generated C$790,000 in revenue at ~65%
gross margin through its four adult-use brands. The potential
outlined in the agreement includes earn-out payments to Embark
shareholders if revenue reaches $92.18 million within three
years.
The acquisition also adds ProteinQuest, for which Embark is the
majority shareholder, to BevCanna growing health and wellness
portfolio. This strategic move could benefit BevCanna in multiple
ways, not the least of which involves adding the combined company
total of more than $100 million in assets the BVNNF balance
sheet.
Furthermore, BevCanna’s already strong management team become
even more impressive with the addition of Bruce Dawson-Scully
(founder and CEO of WeedMD); Marcus “Bubbleman” Richardson (best
known for being the founding pioneer of bubble hash); Michael West
(global extraction expert who has developed, designed, and built
more than a dozen world-class extraction facilities for companies
such as Cresco Labs (CL:CSE); and Curtis Leifso, an expert in
enhanced bioavailability drug-delivery technology.
Making Moves in Cannabis
Other smart companies are making significant moves in the
cannabis space, by way of product innovation and/or acquisition.
The activity is not going unnoticed as investors and consumers
alike are turning their attention to this burgeoning sector.
Canopy Growth Corporation (NASDAQ:
CGC) completed its acquisition
of the Supreme Cannabis Company, a move that further
strengthens Canopy’s overall leadership position within the
Canadian recreational market and creates a pro forma Q4 FY 2021
market share of 18.1. As Canopy continues to focus on the premium
flower segment, the addition of 7ACRES and the 7ACRES Craft
Collective enhances Canopy’s leading market share position and
supplements its production capacity through the acquisition of
Supreme’s low-cost, scalable cultivation facility in Kincardine,
Ontario. This facility has a proven capability for producing
high-quality flower from sought-after strains that have earned
Supreme’s brands their loyal consumer followings.
Tilray Inc. (NASDAQ:
TLRY) launched a
line of medical cannabis edibles in THC and CBD-rich
varieties of chocolates and soft chew gummies. The medical cannabis
edibles are now available for patients across Canada and add to
Tilray’s comprehensive offering of cannabis medicines, including
whole flower, oils, vapes, and pre-rolls developed with patient
health and well-being in mind. “Whether it’s pain management,
anxiety treatment, or everything in between, patients are asking
for more choices in the medical cannabis category, and Tilray
remains committed to the innovations that improve patient
well-being,” said Tilray chair and CEO Irwin D. Simon.
In the last two months alone, Cresco Labs Inc. (CSE: CL) (OTCQX:
CRLBF) has announced a series of
acquisitions and openings that has expanded the company’s
presence in four different states. Last month, Cresco opened a Fort
Lauderdale dispensary, the company’s ninth Florida location. Only a
day later, the company announced plans to acquire Blair Wellness
Center, a top-performing dispensary in Maryland. Earlier this
month, Cresco closed on the acquisition of Cultivate, which
operates three cannabis dispensaries in Massachusetts. And most
recently, the company announced plans to acquire three
high-performing Pennsylvania dispensaries. One of the largest
vertically integrated multistate cannabis operators in the United
States, Cresco is on a mission to normalize and professionalize the
cannabis industry.
Curaleaf Holdings Inc. (CSE: CURA) (OTCQX:
CURLF) opened
Curaleaf Bordentown, the company’s third dispensary in New
Jersey and 109th dispensary nationwide. In addition, the company
launched its Select brand in New Jersey, expanding the brand’s
reach to 19 states. Select Bites, which feature the brand’s
award-winning, concentrated broad-spectrum oil and science-based
formulations that offer precise, consistent cannabis experiences
for any occasion, are now available at all Curaleaf New Jersey
locations. All three of Curaleaf’s New
Jersey dispensaries are strategically located near
the New York and Pennsylvania borders, allowing
the company to better serve the growing East Coast adult-use
market
The cannabis market, including the health and wellness spaces,
appear to be on the verge of major disruption as consumers clamor
for government support and changes in legislation. Companies with
strong operations and high-quality products in place will be in
prime position to benefit.
For more information about BevCanna Enterprises Inc., please
visit BevCanna
Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) (FSE:
7BC).
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