Cannabidiol-infused Beverages Could Be Canada's Next Big Industry

Thursday, March 8, 2018 Drug News
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PALM BEACH, Florida, March 8, 2018 /PRNewswire/ --

MarketNewsUpdates.com News Commentary

With Canada's

legalization of cannabis set for this summer, new market opportunities are already emerging. Vendors have recently begun selling ice teas, shakes, and juices infused with cannabidiol (CBD). This unique CBD beverage market could be the biggest beneficiary
of impending recreational legalization. It could even become Canada's next big industry. Some of the major players in this emerging market include Aphria Inc. (TSX: APH) (OTC: APHQF), Canopy Growth Corp. (TSX: WEED) (OTC: TWMJF), Cronos Group Inc. (TSX-V: CRON), Abcann Global Corp. (TSX-V: ABCN) (OTC: ABCCF), and Phivida Holdings Inc. (CSE: VIDA) (OTC: PHVAF).

So far, investors have mostly focused on the psychoactive effects of cannabis, but full legalization means this will also create an opportunity for CBD infused-products to enter the healthy lifestyle niche. This market is worth $5.6 billion in Canada alone based on data from Consumer Health Products Canada.

CBD, which occurs in both families of cannabis plants (hemp and marijuana), is said to bring a variety of health benefits to the human body, according to publications by MedicalNewsToday and Healthline and dozens of clinical studies and research. An article by the Huffington Post last year also confirmed CBD could inhibit the growth of many cancers and tumors, and it's already being used by people suffering from pain and inflammation associated with various diseases. ProjectCBD estimates that CBD may become an effective treatment option for over 50 medical conditions, and could grow into a $2.1 billion consumer market by as early as 2020 - that's a 700% increase from 2016.

Realizing the healing power of CBD, cannabis companies have begun to focus on CBD-infused products. Leading the way is Phivida Holdings Inc. (CSE:VIDA) (OTC:PHVAF), which is making natural health products from premium extracts, foods, and beverages infused with CBD from hemp oil. Hemp is considered superior to marijuana because of its higher CBD content and lower concentration of THC, which is the psychoactive ingredient in cannabis. Phivida Holdings received a head-start on this emerging market by beginning mass CBD consumables production into the newly legalized California market.

Evidence of CBD Effectiveness 

In the scientific community, CBD advocacy is on the rise, and evidence of its effectiveness in various health issues is growing. In 2014, a CNN documentary featuring Dr. Sanjay Gupta first reported on the antiepileptic properties of the cannabis ingredient. This was supplemented by the World Health Organization's statement last year that "CBD has been demonstrated as an effective treatment of epilepsy in several clinical trials."

Last year, Forbes covered a story on a medical survey which saw half of the 2,400 respondents - all part of an online community of cannabis patients with mental health issues - claim to have stopped taking traditional medicines following CBD usage.

Phivida Holdings founder John Belfontaine shared his own story about a life-altering experience which inspired his current business. "I was in car accident in 2011 and suffered severe neck and back injuries and a tremendous amount of pain. Doctors insisted on prescription opiates, but I preferred to look for a natural plant-based medicine," Belfontaine said. "I'd heard about medical marijuana and its effects on pain, but the psychoactive side effects of THC just weren't right for me. I was thrilled when I discovered that CBD was found in the highest concentrations in medicinal hemp. When I tried CBD hemp oil for myself, I was amazed at the pain relief and increased mobility. It was a godsend."

Phivida Holdings also recently added former President Red Bull Canada, Jim Bailey as CEO and former Red Bull executive, Michael Cornwell as their new CMO last month to its management team to replicate success they had at Red Bull. . Earlier this year, the company launched its flagship Nano-CBD-infused product in the U.S. for professional athletes and are now actively pursuing partnership opportunities with Canadian LP's to bring their line of functional foods and beverages to Canadians.

CBD Now Recognized Globally 

Nations all over the world are noticing the health benefits of CBD. It is projected that the global CBD oil market will grow at a striking 39% annually between 2017 and 2021. Many companies are already planning their global strategies. Phivida Holdings just recently secured a distribution deal in Japan - a key emerging cannabis market, making them a possible contender as a global supplier.

The distribution agreement signed with Asayake Inc. makes Phivida Holdings Inc. (CSE:VIDA) (OTC:PHVAF) an early first mover into Japan, which is the world's third-largest consumer economy. Japan has a health-conscious population and stringent government regulations for products like CBD, where sales of supplements alone are valued at US$10 billion annually.

Comparables:

Aphria Inc. (TSX:APH) (OTCQB:APHQF)

Aphria is one of Canada's lowest-cost medical cannabis producers. The company sells its products through both retail and wholesale channels. It's also engaged in the research and development and commercial production of cannabis oil. In October, Aphria made its first shipment of cannabis oil to Medlab Clinical Ltd., an Australian medical life science company.

Canopy Growth Corp. (TSX:WEED) (OTC:TWMJF)

Canopy Growth is a diversified cannabis and hemp company that offers distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms with operations across four continents. The company was one of the early advocates of hemp production, having acquired various hemp companies early on. In January, Canopy Growth expanded its hemp business into Saskatchewan through its acquisition of Green Hemp Industrie Ltd.

Cronos Group Inc. (TSX-V:CRON)

Cronos Group is a diversified and vertically integrated cannabis company with a presence across four continents. It currently owns Peace Naturals, a licensed producer under Health Canada's Cannabis for Medical Purposes Regulations (ACMPR) that sells medical marijuana and cultivates cannabis oil. Recently, Cronos Group became the first cannabis company to be approved for listing on the Nasdaq stock exchange.

Abcann Global Corp. (TSX-V:ABCN) (OTCQB:ABCCF)

Abcann Global currently holds Health Canada licenses to produce and sell cannabis. The company is also looking to expand its operations in Australia, Germany, and Israel. In January, Abcann received its license to produce medical cannabis oils, with sales approval expected

this year.

CBD Beverages Could Be A Cornerstone of Canadian Economy 

With legalization of CBD-infused foods and beverages set to become official this year, the industry is set to challenge energy drinks and perhaps even alcohol in the legal recreational product market.

Being the first pure-play U.S. focused CBD hemp company from Canada, Phivida Holdings Inc. (CSE:VIDA) (OTC:PHVAF) has the opportunity to potentially dominate both markets.Since its IPO in December, the company saw its share price nearly double in three months, starting at $0.78 to what is now a $1.49 stock.

People's perception of cannabis consumption have changed. Cannabis is no longer something just to get "high" on. As cannabis legalization begins to spread around the globe, a unique market based on the health appeals of CBD will likely emerge. Just how big this market could grow is anyone's guess, but the potential is there for it to rival Red Bull and become one of the hottest sectors in the beverage industry.

For a more in-depth look at Phivida Holdings Inc. (CSE:VIDA)(OTC:PHVAF), check out the full report here.

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