The opportunities presented for the cannabis market following legalization will only increase a year after the event, thanks to the legitimization of novel products such as vaporizers and edibles.

Cannabis infused beverages will also attempt to catch the eye of new consumers seeking alternatives to the most associated consumption methods with the drug. A company working to develop its own beverage told the Investing News Network (INN) about its public market intentions at the Lift & Co Cannabis Expo in Toronto held May 25-27.


Kris Dahl, VP of corporate development with Sproutly told the Investing News Network (INN) the launch of the stock is coming in June under the ticker symbol “SPR.” The company will begin raising capital in the go-to exchange for alternative cannabis ventures as an infusing beverage developer.

 

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Last year Sproutly signed a non-binding letter of intent with a public mineral exploration company in B.C., Stone Ridge Exploration (CSE:SO), to launch its stock via a reverse takeover.

This year Sproutly reinforced its platform by buying Infusion Biosciences and the rights to its key APP Technology. The transaction cost Sproutly C$36.9 million common shares of the resulting issuer and C$5 million of cash.

Now with Infusion Biosciences, Sproutly will seek partners to develop and sell cannabis beverages cannabis-infused water.

“We are going to partner up with people who have better marketing machines, they know how to brand and they already have the distribution logistics locked down,” Dahl said. He explained the company currently is eyeing July 2019 as the date these beverages will be allowed legally.

Sproutly will target beer companies, soda companies, energy drink companies and water companies for this partnership. According to Dahl some alcohol producers are seeking to add cannabis into their immediate plans but are concerned of the offerings due to the slow off set time.

The advantage from a patent applicant APP Technology

As he explained it, current cannabis beverages are oil based and take 30 to 45 minutes for the effects to begin showing. “Some people are impatient looking for that effect so they drink too much and when it finally hits, they are out of it for a long, long time, Dahl said.

“Ours are less than five minutes onset and in less than 90 minutes it’s fully out of your system.”

Sproutly is growing product thanks to its licensed producer hopeful Toronto Herbal Remedies. The potential LP, according to the company, is a 16,600 square feet facility located in the Greater Toronto Area.

The company doesn’t plan to grow product for the recreational or medical market, but instead will focus entirely on its extraction technology.

“Infusion Biosciences is able to gently recover both the water soluble bioactive materials as well as the plant’s oil-based bioactive materials using a patent pending process, proprietary reagents and trade secrets,” Sproutly explains.

 

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The end result is two finished ingredients: Infuz2O and Bio-Natual Oil or BNO. The first a water-soluble cannabis solution which will enable the company to produce formulated beverages with the effect of the drug.

Sproutly claims the Infuz2O solution dissolves in the water fully, in less than five minutes. BNO is a cannabinoid (CBD) oil capable of being infused into edibles or be have a transdermal delivery, meaning it is administered across the skin.

The cannabis beverage market increased following major LP investment deal

Last year, in what served as a significant driver for cannabis stocks, Constellation Brands (NYSE:STZ) signed an investment agreement with Canopy Growth (NYSE:CGC; TSX:WEED) where the alcohol producer would get a 9.9 percent equity worth C$245 million.

A partnership between the two was also formed and the potential for infused drinks became real for the biggest cannabis company in the public market.

“We are on to specifics of brands, flavourings, formats,” Canopy CEO Bruce Linton said during a conference call earlier this year as reported by Canadian Press.

The rush for these water products may relate to the need for the market to expand and provide novel products to incoming new consumers.

During an investment panel at the Lift & Co Cannabis Expo in Toronto, Chuck Rifici CEO of Cannabis Wheaton (TSXV:CBW) told the audience the entry of all types of products a year after the legalization of recreational cannabis in Canada is going to cause flower smoking to become a craft grow dominated market.

“A year after legalization we are going to have edibles and vape pens and other products that are going to come in time… The only people smoking flower are going to be real connoisseurs,” Rifici said.

In an interview with CNBC’s Mad Money show Bruce Linton, CEO of Canopy said he sees the partnership with Constellation delivering a “big driver” with the beverages they are currently working on.

Linton explained these drinks will provide a euphoria with pleasantness and no extra calories.

Don’t forget to follow us @INN_Cannabis for real-time updates!

Editor’s Note: This story was updated to correct the launch of Sporulty’s stock on the CSE.

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

 

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 Aion Therapeutic Inc. (CSE: AION) (” Aion Therapeutic ” or the ” Company “) announced today that its proprietary and patented combinatorial mushroom preparations AION F7 and AION F8 (collectively, the ” Aion Mushroom Preparations ” or ” Preparations “) showed high efficacy in killing HER2+ breast cancer cells, ER+PR+ breast cancer cells, and triple-negative breast cancer cells by direct cytotoxicity.

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The Company Will Tap into Southern Glazer’s Established Distribution Network to Bring Quatreau, its CBD-Infused Sparkling Water, to U.S. Retailers

 Canopy Growth Corporation (“Canopy Growth”) (TSX: WEED) (NASDAQ: CGC), a world-leading diversified cannabis, CBD and vaporization device company, today announced Southern Glazer’s Wine & Spirits (“Southern Glazer’s”), the world’s pre-eminent distributor of beverage alcohol, as the distribution partner for its U.S. portfolio of CBD-infused beverages. This partnership announcement follows the recent launch of Quatreau Canopy’s first line of CBD-infused beverages sold in the U.S market.

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 Canbud Distribution Corporation (CSE: CBDX) (FSE: CD0) (“Canbud” or the “Corporation”) announces its subsidiary Empathy Plant Co. has completed the full development of its vegan multivitamin formula exclusively for women.

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Unique Vegan Women’s Multi-Vitamin with 100% Compostable Packaging

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Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis market update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.

 

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Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the US federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, working in the lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now undergoing a return to form as excitement about the US opening up increases.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes in US cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.

“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”

 

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As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed for the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be.

 

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While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance. In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadian companies waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent future positivity for already thriving operations.

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 Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States will release its first quarter 2021 financial results on Thursday, May 13, 2021 before markets open. Following the earnings release, management will host a conference call at 8:30 AM Eastern Time to review the financial results.

All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

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