Dec 17, 2020
Why BevCanna is an emerging leader in the infused beverage sector
- The global cannabis beverage market could reach $5.8 billion by 2024
- BevCanna is bullish on this market with the company recently executing a Definitive Agreement with Naturo Group Investments Inc.
- Naturo owns and operates nationally distributed house brands across Canada which are currently sold in more than 3,000 Canadian retailers
With attitudes towards cannabis drastically changing over the last few years, coupled with nationwide recreational cannabis legalization, a new vertical is emerging — and it’s drawing investor attention.
This new trend is centered around cannabis-infused beverages.
“BevCanna is evolving into a comprehensive health and wellness company.”
— Marcello Leone, CEO, BevCanna Enterprises Inc.
Estimates are pegging this vertical to be worth up to $5.8 billion by 2024, with $4 billion alone stemming from the U.S.
Although cannabis is difficult to infuse into water-based beverages based on its fat-soluble molecules, many beverage startups — including several large alcohol brands — are reaching consumers with quality made options.
Many of these alcohol brands, like Molson Coors, have acquired assets or have partnered with cannabis beverage businesses. For instance, this year Molson announced a joint venture with Canadian cannabis firm, Hexo Corp. to launch several new cannabis-infused beverages across Canada.
By taking this course of action, Molson, like others, has determined that the vertical has substantial growth potential.
A new player in a flourishing market
Seeing all the activity in the marketplace for infused beverages, BevCanna Enterprises Inc. (CSE: BEV | OTCQB: BVNNF | FSE: 7BC), an emerging leader in infused cannabis beverages, has put its decades of experience in creating, branding and distributing iconic brands into this new market.
BevCanna sees the infused beverage sector as an early-stage, high growth opportunity. With market predictions already in the billions in the next few years, the industry is showing signs of promise in its early days.
The company references the deal between Molson and Hexo, as both companies formed Truss Beverages to capitalize on the cannabis beverage vertical, which shows that this category is poised to excel and compete with other cannabis verticals.
But what will set BevCanna apart from its competitors?
For starters, the company is taking a consumer-centric approach to bringing desired cannabis beverages to market. All product development, branding and sales strategies are informed by the company’s investment in proprietary consumer research.
Second, BevCanna offers compelling beverage brands. Whether it’s their in-house brands or working closely with their white-label clients, the company can create a diverse range of highly-customizable products that appeal to a variety of target markets — from value, to craft, and premium positioning.
A major growth story in the making
In early December 2020, the company executed a Definitive Agreement with Naturo, where they intend to purchase all of the issued and outstanding securities of the company. As part of the deal, Naturo will become a wholly owned subsidiary of BevCanna, which will carry on the combined business of BevCanna and Naturo.
This acquisition builds on a multi-year exclusive partnership between the companies as they are favourable on the growth potential that is associated with the combined company.
Due to the existing relationship between BevCanna and Naturo, the transition is expected to be seamless. The combination will also create the only fully licensed, in-house and white-label beverage manufacturing company that distributes both conventional and cannabis-based beverage and wellness products. The newly formed company will now have access to global, multi-channel distribution networks of traditional and cannabis sales channels.
“The joining together of these two companies will be an unbeatable combination,” notes Marcello Leone, Founder of Naturo and CEO of BevCanna. “BevCanna is evolving into a comprehensive health and wellness company, and this combination accelerates that evolution.”
Moreover, through a master license agreement that was part of the exclusive partnership, BevCanna will have access to Naturo’s 40,000 sq ft state-of-the-art beverage manufacturing facility. The facility is on a 315-acre property and is strategically located on an alkaline spring water source.
Earlier this year, an independent financial firm assigned Naturo an enterprise value that is between $38 million and $42 million. Including the business operations, the firm came to this number by assigning a $10.4 million valuation to the property, a $3.4 million valuation to the beverage manufacturing equipment, and an $18 million valuation to the exclusive onsite alkaline spring water aquifer.
BevCanna will also take possession of one of Naturo’s most valuable assets, their exclusive onsite alkaline spring water source, independently valued at $18 million. As water resources become increasingly scarcer (like gold and oil), BevCanna expects that the proprietary resource will contribute to a strengthened balance sheet and to BevCanna’s unique positioning within the exploding plant-based and cannabis sectors.
BevCanna expects that the acquisition of this proprietary resource will bring incredible high prospect growth in the most innovative and forward industries. Also important to mention is that this will differentiate BevCanna as a comprehensive health and wellness company specializing in beverage manufacturing and consumer products.
BevCanna’s move into the plant-based fulvic and humic space
Fulvic acid can improve how our cells make use of antioxidants and electrolytes, while also playing a large role in our digestive health and brain function. “Fulvic acid is one component of humus...which is made of many organic compounds found in the Earth’s soils, rock sediments and bodies of water.”
So, with its acquisition of Naturo also comes the ownership of the company’s flagship brand, TRACE, which currently enjoys a leadership position within the Canadian plant-based fulvic and humic mineral category and is sold in more than 3,000 Canadian retailers, with select international agreements and partnerships under review.
Speaking about this brand, Leone notes, “We’ll now offer one of the most unique and diverse portfolios of beverage and wellness products within both the cannabis and the fulvic and humic mineral plant-based categories.”
Along with their nationally distributed alkaline and sparkling waters, TRACE is expanding its product selection to nutraceuticals and is incorporating additional products such as herbal remedies, including cannabinoids, adaptogens, and nootropics to be sold in domestic and international markets.
BevCanna’s U.S. expansion
Back in September, BevCanna made a strategic acquisition of a direct-to-e-commerce site called Pure Therapy.
The acquisition will provide the company with a proven e-commerce brand and platform to further expand and launch its proprietary products directly into the global health and wellness market, including the burgeoning U.S. CBD marketplace.
Pure Therapy brings an extensive list of approximately 23,000 customers that it has acquired since 2017. They have also achieved unaudited 2019 calendar year gross revenues of $4,768,000, and a net profit of $218,000.
BevCanna projects immediate growth in the brand heading into 2021, which will be achieved through new product integration, and by accelerating the growth of the existing natural health products line, leveraging the extensive e-commerce marketing expertise of the existing Pure Therapy team.
In addition to this acquisition, in October 2020, the company also entered into a notable multi-faceted partnership with Keef Brands as another way to expand into the U.S. market in anticipation of positive federal regulatory reform within U.S. federal cannabis legalization.
What makes this partnership significant is that Keef Brands ranks second in the U.S. in units sold amongst all cannabis beverage companies and currently offers six of the top ten selling cannabis beverages in Colorado as well as three of the top ten selling in California.
So, how does this partnership work, exactly?
BevCanna’s agreement with Keef leverages the strengths of both companies to full advantage, where BevCanna will act as the exclusive licensee, manufacturing and distribution partner to the award-winning U.S. line of Keef-infused beverages for the Canadian market. They will also leverage the extensive Keef U.S. manufacturing and distribution network to access the U.S. cannabis market, which includes more than 1,000 dispensaries and delivery services across Colorado, California, Arizona, Nevada, Michigan, Oklahoma, and Puerto Rico.
Why investors should take note of BevCanna
BevCanna offers investors an early-stage opportunity to invest in the emerging cannabis beverage market.
Investment highlights include:
- Decades of experience creating, branding and manufacturing iconic brands that resonate with consumers on a global scale
- Extensive proprietary consumer research has allowed us to develop an unmatched understanding of consumer preferences and buying behaviour
- World class infrastructure, including 40,000-square-foot, HACCP certified manufacturing facility with a current bottling capacity of up to 210M bottles per annum, and a pristine alkaline spring water aquifer onsite
- Innovative manufacturing capabilities and processing technology including custom bottle forms, and water-soluble cannabinoids. We deliver a diverse portfolio of product concepts, for both in-house brands and white labeled products
- Proven direct-to-consumer e-commerce company selling a range of natural health products, including nutraceutical and hemp-based cannabidiol products throughout North America and Western Europe, already generating significant revenue
Strong revenue guidance through multiple streams, including white labeling, joint-ventures, licensing, brand building, and e-commerce direct to consumer.
By tapping into a burgeoning vertical within the cannabis industry coupled with crucial acquisitions under its belt, BevCanna is poised to stand out among its competitors and create buzz as it continues to grow.
Thirsty for more? Visit BevCanna’s website here.
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