North American Spending on Cannabis is Expected to Grow as Acceptance Spreads

Thursday, September 6, 2018 Drug News
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NEW YORK, September 6, 2018 /PRNewswire/ --

According to a report

released by Arcview Market Research, in partnership with BDS Analytics, worldwide consumer spending on legal cannabis is projected to reach USD 57 Billion by 2027. Adult-use cannabis accounts for USD
38.3 Billion
of total spending, while medical cannabis spending is expected to reach USD 19.1 Billion. North America is expected to have the largest spending volume during the forecast years. Furthermore, the report expects spending in North America to grow from USD 9.2 Billion to USD 47.3 Billion by 2027 and at a compound annual growth rate (CAGR) of 18%. Koios Beverage Corp. (OTC: KBEVF), Constellation Brands (NYSE: STZ), Canopy Growth Corporation (NYSE: CGC), Molson Coors Brewing Company (NYSE: TAP), HEXO Corp. (OTC: HYYDF) The cannabis-infused edible product market has potential to grow due to the increasing social acceptance of cannabis. The market can be divided into food and beverages based on product type. Data provided by Technavio showed that the global cannabis-infused edible products market is expected to grow at a CAGR of over 25%. A senior analyst at Technavio for research on the food sector said: "The incorporation of new techniques in cannabis cultivation has resulted in the higher growth rate of the global legal cannabis market. The use of these advanced techniques has led to improved quality of the marijuana-derived CBD-oil products, which augurs well for the growth of the market." 

Koios Beverage Corp. (OTC: KBEVF) is also listed on the Canadian Stock Exchange under (CSE: KBEV). Earlier this week, the Company announced that, "it will be launching two additional products in October to augment its existing line of beverages. The first product slated for release in October is a beverage infused with cannabidiol (CBD), a cannabinoid derived from hemp plants, along with Koios' proprietary nootropic stack.

CBD is commonly used in medical practice to deal with inflammation, pain, anxiety, and epileptic seizures. Unlike THC, which is also produced in the cannabis plant, CBD is not a psychoactive cannabinoid and does not cause the sensation of 'getting high' which is often associated with marijuana.

Nootropic supplements are used to enhance human productivity without using harmful chemicals or stimulants. Koios products can enhance focus, concentration, mental capacity, memory retention, cognitive function, alertness, brain capacity and create all day mental clarity.

'We are just scratching the surface of what cannabinoids like CBD can do for human health,' said Miller. 'CBD is the best researched of all the cannabinoids within the cannabis plant, and is well known for its restorative effect on human health, and in dealing with various types of pain.'

'With our focus on creating optimal human performance and health through our natural supplements, a CBD-infused beverage was a natural next step,' Miller added. 'With our current nootropic stack we will bring a product to market that aims to produce high levels of natural focus while simultaneously creating calming effects for the end user. A CBD infused beverage will be a tremendous value to the market and will allow us to come one step closer to realizing our vision of helping a billion people live healthier lives.'

The second product slated for October will also be released through the Cannavated subsidiary, and will be a collaboration with the Company's partner Keef Brands, a division of CanCore Concepts Inc. (CanCore).

Keef Brands will manufacture, market and sell a line of beverages that are not only infused with THC, but also contain the nootropic supplements from the Koios line of brain-enhancing functional beverages. The resulting product will be the first in the world to combine cannabis infusion with nootropic supplements that enhance the consumer's mental acuity.

Keef Brands has the exclusive rights to the Koios blend for Colorado, with the option of expanding the licensing agreement to Canada and the U.S., provided it complies with all rules and regulations in the markets where cannabis has been made legal. The timing of the release of these products was pushed back due to the overwhelmingly positive result we have had launching our Pear Guava flavour. 

'The product sold out in its first month and forced us to alter our production schedule to meet the demand of our customers and retail partners,' said Miller. 'The timing on these new releases is critical and we want to ensure proper vertical alignment with our distributors as we approach the busy season."

Constellation Brands (NYSE: STZ), a Fortune 500® company, is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand, Italy and Canada. Constellation Brands and Canopy Growth, a leading diversified cannabis company, recently announced a significant expansion of their strategic partnership to position Canopy Growth as the global leader in cannabis production, branding, intellectual property and retailing. Constellation Brands will increase its ownership interest in Canopy Growth by acquiring 104.5 Million shares directly from Canopy Growth, thereby achieving approximately 38% ownership when assuming exercise of the existing Constellation warrants. Constellation Brands is acquiring the new shares at a price of CAD 48.60 per share, which is a 37.9% premium to Canopy's 5-day volume weighted average price of the common shares on the Toronto Stock Exchange ("VWAP"), and a 51.2% premium to the closing price on August 14th, 2018. Constellation will also receive additional warrants of Canopy that, if exercised, would provide for at least an additional CAD 4.5 Billion to Canopy Growth. "Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner," said Rob Sands, Chief Executive Officer, Constellation Brands. "Over the past year, we've come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy's market-leading capabilities in this space. We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space."

Canopy Growth Corporation (NYSE: CGC) is a world-leading diversified cannabis company, offering distinct brands and curated cannabis varieties in dried, oil and capsule forms. Constellation Brands, a leading beverage alcohol company, and Canopy Growth Corporation recently announced a significant expansion of their strategic partnership to position Canopy Growth as the global leader in cannabis production, branding, intellectual property and retailing. Constellation Brands will increase its ownership interest in Canopy Growth by acquiring 104.5 Million shares directly from Canopy Growth. Constellation Brands is acquiring the new shares at a price of CAD 48.60 per share. Constellation will also receive additional warrants of Canopy that, if exercised, would provide for at least an additional CAD 4.5 Billion to Canopy Growth. "Constellation's concentration of global cannabis activities exclusively through Canopy, coupled with the investment and its expert capabilities in brand-building, marketing, consumer insights and M&A will be a huge benefit as we look to expand our portfolio in Canada, the United States and emerging cannabis markets around the globe. We view this investment in our business as an endorsement of our execution since forming our initial strategic relationship in October 2017," said Bruce Linton, Chairman and Co-Chief Executive Officer, Canopy Growth.

Molson Coors Brewing Company (NYSE: TAP) Molson Coors Canada is the Canadian business unit of Molson Coors Brewing Company. Molson Coors Canada and leading Canadian cannabis producer, The Hydropothecary Corporation, recently announced that they have entered into a definitive agreement to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. "Canada is breaking new ground in the cannabis sector and, as one of the country's leading beverage companies, Molson Coors Canada has a unique opportunity to participate in this exciting and rapidly expanding consumer segment. This new venture is consistent with our growth strategy and our commitment to being First Choice for Consumers and Customers by ensuring that Canadians have access to high-quality products that meet their evolving drinking preferences," said Frederic Landtmeters, President and Chief Executive Officer of Molson Coors Canada. "While we remain a beer business at our core, we are excited to create a separate new venture with a trusted partner that will be a market leader in offering Canadian consumers new experiences with quality, reliable and consistent non-alcoholic, cannabis-infused beverages. We look forward to partnering with HEXO, a recognized leader in the medical cannabis space in Canada that will bring robust production capacity, a track record of innovation, and, most importantly, shared values when it comes to doing business the right way and earning the trust of consumers."

HEXO Corp. (OTC: HYYDF) creates and distributes innovative, easy-to-use and easy-to-understand products to serve the Canadian cannabis market. HEXO and Molson Coors Canada recently announced that they have entered into a definitive agreement to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization. "HEXO continues to lead the way for smoke-free cannabis innovation in Canada. We are excited about this partnership with Molson Coors Canada, an iconic leader in adult beverages, as we embark on the journey of building a brand-new market. With this new Company, we are bringing together Quebec's oldest, most established company with one of its newest success stories in a truly innovative partnership," said HEXO's Chief Executive Officer and Co-Founder Sebastien St-Louis.

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