The North American Marijuana Index rose on Monday, as pot stocks opened the week with modest gains of two percent on both sides of the U.S.-Canadian border. Meanwhile, Traditional beverage companies have taken notice of the trending consumer palate, and as states move to legalize cannabis, beverage companies are teaming up with cannabis companies to create the next big thing---cannabis-infused beverages. The Index gained 5.61 points, or 2.51 to close out the day at 229.23.
The United States Marijuana Index gained 2.45 on Monday, while the Canadian Marijuana Index rose 2.70 percent.
In states with legalized cannabis in the West like Colorado, California, Washington and Oregon, cannabis beverage sales are on the rise. These states experienced double-digit increases in sales in 2017 and so far in 2018.
There are many to choose from, including cold brew coffees containing THC, vodkas and even non-alcoholic wines infused with cannabis.
Companies large and small are bustling into the bevy of beverages. Constellation Brands (NASDAQ:STZ), the maker of Corona beer and Svedka vodka, purchased nearly a 10 percent stake in Canopy Growth Corp., (NYSE:CGC), the largest cannabis company in the world, valued at over $4 billion. The $191 million deal will see the two companies produce THC-infused drinks.
Already a leader in the functional beverage sector, Koios Beverage Corp. (CSE:KBEV) (OTC:SNOVF) created the wholly-owned subsidiary Cannavated Beverage Co. to produce cannabis-infused beverages. Koios and CanCore Concepts Ltd. signed an exclusive agreement, allowing famous Keef Brands to add Cannavated to its existing line of cannabis beverages. Koios says it is a match made in heaven—a functional drink with their already well-known nootropic brain-enhancing benefits combined with an infusion of cannabis for medical users.
Koios CEO Chris Miller explained that the beverage market offers a vast opportunity: “When you consider the aging population and the demand for medical cannabis among seniors, we are especially excited about the possibility of combining CBDs with our proprietary nootropic blend to create cannabis-based cognitive beverages.”
Medical cannabis mainstay companies like Lexaria Biosciences (OTCQX:LXRP) are leveraging developed technology to enter the beverage market. The company plans to expand its patented DehydraTECH technology to beverages. Earlier this year, Lexaria and GP Holdings LLC announced a deal to launch cannabis-infused beverages in the California market. The two companies have been formulating beverages for months and will soon open a state-of-the-art bottling facility.
There are even rumors about other partnerships, like the potential one between Aphria (TSE:APH) (OTCMKTS:APHQF) and Molson Coors Brewing (NYSE:TAP). Molson is the second-largest beer seller in the U.S. and Canada, and with Canada’s recent law legalizing marijuana, Molson has made no secrets about wanting to team with a big cannabis partner. Molson’s worldwide sales have been dropping, and a new beverage line could give them the boost they need.
Colorado’s Dixie Elixirs offers another prime example. The company already has lucrative businesses in both topical and edible cannabis, but they’ve also become the nation’s largest cannabis beverage manufacturer. Chief Marketing Officer Joe Hodas says the company’s initial entry into the market was spurred on by a major consumer shift in how people think about and consume cannabis. Hodas says consumers want a consumption method that is discrete and preferably smokeless.
Meanwhile, a jump in 10-year bond yields helped Wall Street on Monday, with the S&P 500 and the Nasdaq both making gains. Most experts expect that the Fed will continue to raise interest rates, even with criticism coming from President Trump.
"Yields are climbing across the board, which is a sign of a strengthening economy," said Oliver Pursche, chief market strategist at Bruderman Asset Management in an interview with Reuters. "And earnings have been very strong."
The Dow Jones Industrial Average fell 13.83 points, or 0.06 percent, to end the day at 25,044.29, while the S&P 500 gained 5.15 points, or 0.18 percent, to close out Monday at 2,806.98. Finally, the Nasdaq Composite rose 21.68 points, or 0.28 percent, to finish the day at 7,841.87.
The Horizons Marijuana Life Sciences ETF (HMMJ.TO) rose CAD$0.41 per share, or 2.52 percent to end the day at CAD$16.71, while the Evolve Marijuana ETF (SEED.TO) closed out the day up CAD$0.52 per share, or 3.43 percent at CAD$15.67.
A Rise In CBD-Infused Beverages On The Horizon
While the THC-infused beverage industry is promising, the CBD-infused beverage market could be even more lucrative. Because cannabidiol (CBD) is non-psychoactive, the ingredient could be added to a bevy of beverages.
These drinks appeal to an entirely new and wider audience who would never smoke a joint or eat a pot-infused brownie. But somehow, cannabis beverages are being perceived differently, as having health benefits without the stigma that marijuana usually brings.
Blue Moon’s head brewmaster quit his job and started his own company, Ceria Beverages, to create a line of non-alcoholic THC-infused beers. Companies like Doctor D’s, the maker of a probiotic drink, are seriously considering jumping into the market. Founder Stuart Dimson says that CBD-infused beverages are very attractive to his health-conscious consumers who are already purchasing his drinks. With Doctor D beverages already sold in 2,000 stores nationwide, the distribution channel is in place, and the market opportunity is just too hard to resist.
Willie Nelson’s marijuana brand LivWell Enlightened Health LLC is coming to Canada and plans to go public in Toronto… Namaste Technologies Inc. (CSE:N) filed its unaudited quarterly financial statements… Aurora Cannabis Inc. (TSX:ACB) (OTCQB:ACBFF) now reimburses medical marijuana in their employee health plan.
Flower Sales Up 1500 Percent In Oregon
New Frontier Data reports that in Oregon over the past 15 months, while the price of flower fell from almost $10 per gram to nearly $5 per gram, sales went up due to the price drop. Check out the numbers in this week’s Cannabit.