Top 5 Cannabis Beverage Stocks for 2020
The legalization of CBD-infused hemp products in the U.S. markets has opened doors for the explosive CBD oil-infused beverages market. This emerging market and touted as the next big thing and will have a value of $2.8 Billion in the next 4 years. Many cannabis companies will cash in on the opportunity, allowing investors to profit. But what are the top 5 cannabis beverage stocks for 2020?
Cannabis beverages will be the most consumable form of hemp-derived cannabidiol extract for the foreseeable future. In other health and wellness applications, such as skin care, pain relief, and topical creams, CBD has already received recognition. In 2020, consumers will continue to have access to a growing variety of CBD infused energy drinks, tonic water, herbal teas, coffee, cocktails, kombuchas, and also sports nutrition drinks.
The Explosive Cannabis Beverage Market
CBD, the non-psychoactive derivative of the cannabis plant, doesn’t induce a high-effect but it has numerous health benefits. As CBD is typically available in the oil form (therefore hydrophobic), it is difficult to mix it directly into a beverage. The players involved in manufacturing the CBD-infused beverages use nanotechnology to break the oil in particles and increase its solvency. According to the Brightfield Group, the global CBD-Hemp market will be worth $22 billion by 2022. Also, the ‘Disrupting Drinks’ report by the Prohibition Partners predicts the cannabis-infused drinks will grow to approximately $4 billion by 2024. While there’s a debate on the total value of this market, the upside for cannabis investors is abundantly clear.
This includes beverages with CBD or THC (the psychoactive compound). It seems consumers are ready to break the stereotypes and are more than willing to taste these new age beverages. A study by A.T. Kearney revealed that 30% of the Americans are willing to go for non-alcoholic cannabis-infused beverages.
What are the top 5 cannabis beverage stocks for 2020? Let’s take a closer look.
#1 Canopy Growth
The largest cannabis company in the world in terms of production capacity, Canopy Growth (NYSE: CGC) has set its eyes on CBD-beverages as a pillar of growth. It has also joined forces with Constellation Brands, the leader in alcoholic beverages. In May, Constellation Brands, increased its stake in Canopy to 38.6%, through its subsidiary Greenstar Canada Investment.
The deal is worth $ 174 million, and the message is loud and clear. Canopy is betting immensely on CBD-beverages. Its CEO David Klein stated that it was set to double its capacity for Cannabis Beverage in August and is quite optimistic about making a mark in the U.S. cannabis market through its BioSteel sports drink.
To strengthen its commercial hemp farming logistics, Canopy Growth has also announced an investment in the range of US$100 million to US$150 million in New York for establishing a “Hemp Industrial Park”.
One of the renowned names in the research, production, and distribution of cannabinoids and cannabis, Tilray (NASDAQ: TLRY) is set to make it big in the CBD-infused beverage market. The hemp stock has partnered with Anheuser-Busch InBev, the single largest brewer globally, to produce non-alcoholic, cannabis-infused beverages. Tilray has also revamped its leadership team with those who have previous experience in top beverage companies.
In a major development, the company also announced the acquisition of Manitoba Harvest, globally the largest vertically-integrated hemp edible producer, in early 2020. This acquisition will pave the way for Tilray to enter the CBD health and wellness market and make a mark in the beverages segment.
#3 Hexo Corp
Hexo (NYSE: HEXO) is a big name in Canadian consumer-packaged cannabis space which has over 1.3 million sq. ft. of facilities in Ontario and Quebec. In 2018, the hemp stock announced a joint-venture with a subsidiary of Molson Coors Brewing Company to develop non-alcoholic, cannabis-infused beverages. The joint venture is called Truss in which Molson Coors has a 57.5% controlling interest.
In August, Truss Beverage launched 5 cannabis beverage brands namely Little Victory, House of Terpenes, Mollo, Veryvell, and XMG. These beverages have a variety of THC and CBD products with natural flavors. Truss plans to introduce the largest cannabis beverage portfolio to the Canadian market. The new cannabis beverages have been well-received by the consumers and are believed to give a boost to Hexo stock.
#4 New Age Beverages
New Age Beverages (NASDAQ: NBEV) is a company that has an early mover advantage in the CBD beverage space. In January 2018, the company announced the production and distribution of the Marley+CBD drinks product line. The Marley drinks portfolio sold CBD-infused relaxation teas with unique flavors like peach raspberry, lemon raspberry, and herbal honey.
New Age is amongst the largest non-alcoholic beverage companies in the world. It aims to be a market leader in this segment and has many healthy beverages besides the Marley Line. These include Búcha Live Kombucha, XingTea, Coco-Libre, TeMana, and others.
In 2019, New Age Beverages further expanded its portfolio of Noni+Collagen products, a healthy beverage based on the Tahitian Noni fruit juice. New Age is constantly on the lookout for growth opportunities for its wellness-oriented beverages and continues to add unique elements to it. It is quite likely that New Age would also come up with CBD-infused Noni-Juice too.
#5 Phivida Holdings
Phivida (OTC: PHVAF) is a food and beverage company that specializes in wellness products and premium beverages infused with CBD-hemp. Its Oki-hemp-infused drinks are sold in more than 100 stores across Colorado. The Oki drinks offer iced teas and waters with active hemp extract.
In November 2019, the hemp company also entered into an agreement with a single distributor to handle the merchandise and sales of its Oki beverages in Florida. Oki is available in eight unique flavors and is sold in six US states besides Florida. The brand is immensely successful and it has seen more than 200% distribution growth in the last months of 2019.
The Bottom Line
Cannabis-infused beverages have a promising future ahead. Sensing a huge opportunity, most big players are foraying into this Cannabis 2.0 space. With the legalization of recreational marijuana still elusive in the US, there are sure to be initial challenges. However, once key regulatory aspects are sorted out, the CBD-beverage market will attract multiple players. Many cannabis companies will cash in on the opportunity, allowing investors to profit which is why cannabis investors should consider watching these top 5 cannabis beverage stocks.
Top 5 Cannabis Beverage Stocks for 2020
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