Shifting Trends Guide Consumers Towards Function Cannabis Beverages

NEW YORK, July 8, 2019 /PRNewswire/ -- Consumers across the world enjoy drinking beverages packed with flavors and sweetened sugars like fructose and glucose. In 2011 to 2014, 63% of the U.S. youth and 49% of U.S. adults had consumed a sugary beverage on a daily-basis, according to the Centers for Disease Control and Prevention (CDC). The CDC also mentioned that adults and adolescents who smoke, don't get enough sleep, don't exercise as much, and eat fast food regularly tend to be more frequent consumers of sugary beverages. However, people are now beginning to become more conscious about what they consumer. According to a survey by Nielsen, 83% of North Americans changed their diet and 74% engage in physical activity to lose weight. And now, more consumers are putting sugary beverages aside and drinking healthier and more functional drinks instead. Notably, the cannabis-infused beverage market has gained traction among consumers because of its therapeutic benefits. Specifically, most cannabis infused beverages are CBD based because the compound does not induce psychoactive effects on the consumer. Research conducted has also linked CBD to successfully treating of a variety of health concerns such as acne and anxiety. Moreover, CBD is also being leveraged in the healthcare and medical industry to alleviate symptoms associated with conditions such as chronic pain, cancer, arthritis, and epilepsy. In particular, CBD-infused beverages are quickly gaining popularity in North America, largely due to the legal markets prevalent in the region. Nonetheless, more and more countries around the world are also beginning to adopt CBD for medical applications. As a result, the CBD-infused beverage market is positioned to become a thriving segment within the broader cannabis industry. And according to data compiled by Zion Market Research, the global cannabis beverage market was valued at approximately USD 1.61 Billion in 2018. By 2025, the market is expected to reach USD 4.46 Billion while registering a CAGR of 15.6% throughout the forecast period from 2019 and 2025. BevCanna Enterprises Inc. (CSE: BEV), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), HEXO Corp. (NYSE: HEXO) (TSX: HEXO), New Age Beverages Corporation (NASDAQ: NBEV), The Alkaline Water Company Inc. (NASDAQ: WTER)

The CBD marketplace took off in late 2018 after the U.S. government passed the Farm Bill, which legalized the sale and possession of hemp. Generally, CBD is derived from hemp, meaning that hemp-derived CBD products are legal across the U.S. Generally, government agencies have eased the regulations on the compound after extensive research highlighted that CBD is completely different from its THC counterpart. The biological makeup of CBD does not cause psychoactive effects, but instead provides tangible health benefits. And since consumers can now purchase other CBD products such as oils, capsules, and gummies, the CBD-infused beverage industry is becoming one of the fastest growing in the market. THe industry has also evolved so much that consumers can now simply mix CBD oils into their water or other beverages. For instance, consumers are adding full-spectrum CBD oils into their beverages because of the variety of vitamins and minerals within the oil. Full-spectrum CBD oils contain many cannabinoids, plant terpenes, vitamins and minerals that are beneficial to the consumer and these full-spectrum oils contain all 20 essential amino acids, omega-3 fatty acids, B Complex vitamins, and vitamins A, E, and C, according to Terra Vida, a Colorado-based CBD retailer. Additionally, the oils also contain minerals such as calcium, iron, magnesium, potassium, zinc, and phosphorus. The nutrients consumers can receive from full-spectrum oils are thus much more cost effective compared to buying supplements that only offer individual vitamins. Overall, the CBD and in general, cannabis industry, have made significant progress within the past few years compared to decades ago when the plant was completely prohibited. Now, the industry is enjoying a profound and global impact. Moreover, as more countries move to adopt cannabis legislation, others are also expected to explore opportunities within the marketspace. "In a way, I almost think it's becoming trendy to be okay with cannabis," says Samantha Miller, Chief Science Officer at Hmbldt. "We're seeing a reduction in the bias and judgmental discourse around cannabis. More change has happened in the last 18 months than in the previous 25 years."

BevCanna Enterprises Inc. (CSE: BEV) announced earlier last week that, "it has been awarded an Industrial Hemp Cultivation License from Health Canada, pursuant to the Cannabis Act (Canada) (the "Hemp License"). This highly-coveted license is a significant step in BevCanna's plan to launch a portfolio of CBD-infused beverages and other consumable products. BevCanna also anticipates the issuance of their Standard Processing and Research Licenses from Health Canada.

Securing this first license allows BevCanna to produce low-cost, high-quality, sungrown hemp biomass for extraction of cannabidiol (CBD), derived from their 100-acre outdoor cultivation site in the highly fertile Okanagan region of British Columbia. Extracted CBD is then infused into premium spring water, sourced from a pristine and naturally alkaline aquifer, to which BevCanna holds exclusive rights in partnership with Naturo Springs. The unique combination will be the basis for a range of innovative CBD beverage products, for both in-house brands and white-label clients.

'Our vision is to create a compelling portfolio of products that appeal to a wide variety of consumer tastes,' said Marcello Leone, CEO of BevCanna. 'Consumers want choice in their CBD-infused products, and we plan to fill that gap in the market. Building on our decades of experience in developing, bottling and marketing premium quality beverages, we have the infrastructure and resources to develop quickly into a vertically-integrated operation. This puts us squarely on the path to becoming category leaders in the infused products landscape.'

'We're also pleased that this license allows us to further expand our presence and identity as a B.C.-based company,' continued Leone. 'We take great pride in our B.C. roots and we've continued to grow and bring prosperity to the region over the past ten years, through our Naturo Springs operation. This license enhances our ability to contribute in a meaningful and prosperous way to the B.C. economy.'

About BevCanna: BevCanna Enterprises Inc. (CSE: BEV) plans to develop and manufacture cannabinoid-infused beverages and consumer products for in-house brands and white label clients. With decades of experience creating, branding and distributing iconic brands that have resonated with consumers on a global scale, the team demonstrates an expertise unmatched in the emerging cannabis beverage category. Based in British Columbia, Canada, BevCanna has a 100-acre outdoor cultivation site in the fertile Okanagan Valley and the exclusive rights to a pristine spring water aquifer, as well as a world-class 40,000-square-foot, HACCP certified manufacturing facility, with a current bottling capacity of up to 72M bottles. BevCanna's vision is to be a global leader in infused innovations."

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Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. Canopy Growth Corporation recently announced that it had signed an offtake agreement with PharmHouse Inc., a 49% owned joint venture of Canopy Rivers Inc. Under the terms of the agreement, PharmHouse has agreed to allocate high quality cannabis flower from an additional 20% of the flowering space available at its Leamington greenhouse facility over the next three years. Boasting 1.3 million sq. ft. of greenhouse grow space, and leveraging the resources of Canopy Growth, Canopy Rivers and its joint venture partner have worked diligently since October 2018 to prepare the facility for licensing.  PharmHouse will leverage Canopy Growth's genetics – selected and supplied by the Company – and flower will be returned to the Company to be sold under Canopy Growth's diverse brands and banners.  Under the terms of the new offtake agreement, PharmHouse is committed to producing GMP-certified, high quality cannabis flower within 18 months of its cultivation license and the flower must comply with the Company's high standards for cannabis quality. GMP, or Good Manufacturing Practices, certification is the internationally recognized system to ensure all produced goods meet the highest consumer health and safety standards, allowing the Company to export the flower to its international divisions. Including this new agreement, 30% of PharmHouse's total flowering space has been committed to Canopy Growth. "We have witnessed Canopy Rivers and its joint venture partner pour their hard work into the PharmHouse facility in Leamington and couldn't be more satisfied with how it has turned out," said Bruce Linton, Chairman & Co-Chief Executive Officer of Canopy Growth Corporation and Chairman & CEO of Canopy Rivers. "We expect the same for the flower quality that PharmHouse will be providing to Canopy Growth. This is further evidence that the ecosystem model we had hoped for from Canopy Rivers is demonstrating its value and this new offtake agreement with PharmHouse speaks to how well we are managing our numerous assets."

HEXO Corp. (NYSE: HEXO) (TSX: HEXO) creates and distributes innovative, easy-to-use and easy-to-understand products to serve the Canadian cannabis market. HEXO Corp. and Molson Coors Canada (MCC), the Canadian business unit of Molson Coors Brewing Company recently announced that they had closed the transaction announced on August 1st, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer. Vye will report to the Truss board of directors consisting of three members appointed by MCC and two members appointed by HEXO. "With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running," said Brett Vye, Chief Executive Officer at Truss. "When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer. Why "Truss"?  We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future."

New Age Beverages Corporation (NASDAQ: NBEV) is a Colorado and Utah-based healthy beverage company dedicated to inspiring, educating consumers to live healthily. New Age Beverages Corporation recently announced the signing of an agreement to develop and distribute Marley branded cannabis-infused beverages. The first product to rollout in the Marley+CBD portfolio will be Marley+CBD Mellow Mood, relaxation drinks in 15.5 oz cans with 25 mg of pharmaceutical grade CBD per serving. Initial market rollout to customers will be in Colorado, Oregon, Washington, and Michigan where cannabis is legal for responsible adult consumption. This rollout gives New Age a significant first-mover advantage in the CBD space with a globally-recognized brand platform, and positions the venture well for further expansion as regulations permit. Michael Cunningham, Senior Vice President of Sales for New Age commented, "It makes my job a lot easier when I have retailers and distributors reaching out to me asking for specific products. From the moment the CBD movement began, I've been receiving calls nonstop asking when we'd be going to market with a Marley+CBDproduct. Retailers and distributors realize that it will be a long road for smaller CBD brands to gain traction and brand equity. Under the Marley brand platform, we are able to leverage a massive global brand with ties to healthy cannabis use, to ultimately grow a beverage brand beyond anything we have seen to-date."

The Alkaline Water Company Inc. (NASDAQ: WTER) has developed an innovative, state-of-the-art, proprietary electrolysis process that produces healthy alkaline water for a balanced lifestyle. The Alkaline Water Company Inc., with products bottled under the trademark Alkaline88®, recently announced that its wholly owned subsidiary, A88 Infused Beverage Division, Inc., had entered into an exclusive formulation, development, and supply agreement with American Nutritional Products Inc., headquartered in Carson City, Nevada. This Agreement solidifies the Company's ongoing relationship with ANP to finalize the formulations for the Company's Cannabinol (CBD) and infused products. ANP has agreed to initially develop 5 to 7 functional waters including 3 to 4 in the CBD area and 2 to 3 in the vitamin and antioxidant segment. Each will be uniquely formulated to match both consumer demands and taste profiles. Under the terms of the Agreement, A88 Infused will be granted the exclusive right to products developed by ANP, which will be used in the development of the Company's new line of infused beverages. "For over 25 years, Maria Watson, President and Chief Executive Officer of ANP, has been an industry leader in the nutraceutical world. Her formulation team has over 40 years of experience in the development and marketing of infused beverages containing CBD, nutraceuticals, and organic flavoring, making them an ideal partner to work with in the development of our new line of products. We both recognized the synergies of our companies and this agreement was a logical extension of our recently signed co-packing agreement. The depth of knowledge and expertise provided by ANP will ensure that A88 Infused is able to introduce some of its infused beverages to market by the end of this calendar year," stated Richard A. Wright, President and Chief Executive Officer of The Alkaline Water Company.

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