Many American beverage companies have been forced to watch from the sidelines as Canada made its move to legalize recreational marijuana use. Not to be outdone, larger well-recognized brand names in the U.S. have also been connecting with cannabis growers to create new product lines, anticipating the boom brought about by Canada’s own industry.
In September 2018, Coca-Cola (NYSE:KO) had a high interest in the Canadian cannabis company Aurora Cannabis (TSX: ACB) for its idea of a wellness brand of beverages. A health drink was pitched that would relieve cramping, pain, and inflammation. By the end of October, Coca-Cola pulled out of the deal with a statement that at present they will not seek alliances in the cannabis beverage markets.
One potential cause was anxiety over the outcome of the 2018 U.S. Farm Bill, uncertainty is anathema to business and tends to force conservative moves. Now the historic Farm Bill has been signed into law and part of the new provisions have enacted the full legalization of Hemp, which provides the medicinal benefits of marijuana without getting the user high. This single piece of legislation has the potential to spark a CBD renaissance in North America.
Cannabis-based drinks are nothing new. Cannabis drinks exist in the U.S. markets and are present in states where cannabis became legalized. Despite this few companies have been able to make their mark in this sector. In part it is because of the negative connotations of Cannabis, a renewed focus on CBD beverages could change everything.
The Alkaline Water Co. (NASDAQ:WTER) (CSE:WTER) is a leading beverage firm that happens to be one of the only companies with an actual plan. Alkaline Water reported over $3.1 million sales in November 2018, the highest monthly sales in the company history. This was before the company has even begun to release their CBD line of beverages and the figures over the course of 2019 are likely to be even more impressive.
Reclassifying cannabis-infused drinks as a health beverage showed that the company has a sixth sense about what consumers want. The product line A88 has hemp-derived, sparkling CBD, and vitamin-infused CBD product lines.
Their other innovative ideas in beverage include vitamin based energy water and naturally flavored water. Flavors of peach mango, blackberry lemon, blood orange, and watermelon give consumers choices and healthy options. The Alkaline Water Co. has a Nevada connection and headquarters in Arizona, giving it an extensive advantage over Canadian companies trying to break into the market.
The company has eyes to the future and has expanded its international sales strategy with a new co-packing agreement with Canadian based World Choice Bottling. Canada is expected to legalize CBD drinks by October of 2019 and Water’s TSX listing will put them in the perfect position to capitalize on this emerging market.
The biggest news occurred when The Alkaline Water Co. made an agreement for licensing with American Nutritional Products. What Alkaline Water receives in return lists as biomass and extraction with ANP’s certified GMP and FDA registration. Along with all of that Alkaline also receives R & D, formulations and manufacturing.
WTER also achieved a milestone when it became listed under NASDAQ. This achievement has given the company access to institutional investors who aren’t able to invest in junior companies and has marked them out as a company to watch.
Using the NASDAQ momentum, the company is expected to further propel plans to grow by dominating the new CBD-infused beverage market. The A88 Infused Beverage Division Inc. (A88 Infused), for example, will include the following offerings: hemp-derived CBD-infused Alkaline88 water; Sparkling CBD Alkaline88 water; and Vitamin-infused CBD Alkaline88 water. Under the A88 infused product line, consumers can expect the Vitamin-based “Energy” Alkaline88 water, and Naturally-flavored Alkaline88 water (with flavors like blackberry, blood orange, watermelon, and peach mango among others).
The Alkaline Water Co. also forged a Technology-Licensing Agreement with Infusion Biosciences, Inc. that is expected to result in ready-to-drink, natural hemp-extract (CBD) formulations. A production agreement with the American Nutritional Products is expected to expand the new A88 infused product line-up providing a “one-stop shop” for the development of each of its recently announced product extensions. ANP will provide A88 infused with manufacturing, formulations R&D, biomass and extraction within ANP’s state-of-the-art facility.
The Farm Bill has changed everything
The Farm Bill has opened up an incredible opportunity for beverage producers. Big players are looking to enter the sector and Canopy Growth has benefited from joint ventures with a $4 billion investment from Constellation Brands. Brewing a project called Tweed and Tonic, Canopy expects to have the beverage out by late 2019.
Unlike cannabis, the CBD sector now stands on safe legal ground and the CBD beverage sector is predicted to be worth $600 million in the United States alone. Water is well placed to become a dominant player in this market. They have an existing distribution network of over 47,500 retail locations with national bottling capabilities in the United States. They will be able to leverage this impressive reach to quickly dominate a market that few other companies have predicted.
It would be hard to think of a company that has positioned itself more effectively than the Alkaline Water Co. is primed to explode in 2019.