DENVER, March 18, 2019 /CNW/ -- CBD-infused beverages look set to hit the market in a big way in 2019.
- Cannabidiol (CBD) is widely used in health and wellness products after spectacular growth in recent years.
- Several companies are lining up to launch CBD drinks following legal changes in the United States and Canada.
- Integrating these new offerings into wider product lines is accelerating CBD's race for mainstream attention.
Youngevity International Inc. (NASDAQ:YGYI) (YGYI Profile) is one of the first to launch, with a CBD coffee coming in May and a CBD water in the works. The Alkaline Water Company Inc. (NASDAQ:WTER) (TSX.V:WTER), which is constantly growing its U.S. distribution network, plans to add a CBD bottled water to its range. The New Age Beverages Corporation (NASDAQ:NBEV) is adding CBD to its line of organic cold coffees and teas. Heineken (OTC:HEINY) has also entered the market by developing a cannabis-infused sparkling water through Lagunitas, its U.S. craft brewer. And the biggest investment in the overall cannabis space has come from Constellation Brands Inc. (NYSE:STZ), which has invested $4 billion in a Canadian cannabis company.
To view an infographic of this editorial, click here.
Crossing the Boundary Between Two Industries
The most exciting new developments in business often come when separate trends or industries combine. For example, it was the combination of previously separate cameras, phones and portable music that brought us the smartphone, a technology that has transformed our lives. And while not every combination will be as socially disruptive as that computer in your pocket, each one brings new possibilities.
One of the hot crossover moves this year is the combination of the markets for beverages and for cannabidiol (CBD). The emergence of CBD over the past few years has transformed the cannabis space and allowed hemp producers to reach beyond their original markets. Beverages continue to be a powerful industry, in part through sporadic bursts of innovation such as the rise of energy drinks. Now one of those bursts is coming again as these two trends combine to produce CBD-infused drinks.
The Rise of CBD
In many ways, the popularity of CBD has caught businesses by surprise. Only a few years ago, it was an obscure chemical compound found in cannabis and hemp, not even the part of cannabis that got users high. Now it's a newsworthy growth industry, with CBD products appearing on the shelves of health shops, pharmacists and vaping stores, as well as on dedicated online outlets. The trend has also led to the rise of new companies as well as investment from the likes of Youngevity International Inc. (NASDAQ:YGYI). CBD isn't everywhere yet, but it's feeling close.
Though it wasn't predictable, the rise of CBD is easy enough to explain. Since cannabis legalization began in the 1990s, extensive research and development has been conducted regarding the plant. One of the results is a greater understanding of and focus on the range of chemicals found in cannabis, instead of just the high-inducing THC. As researchers started finding and reporting evidence that CBD could be beneficial for health and wellness, a gold rush began.
One of the big advantages of CBD, especially for an omnidirectional lifestyle company such as Youngevity, is that it can establish a strong presence in markets that THC can't reach. Shops that don't sell cannabis are sometimes willing to stock CBD-infused products. Some jurisdictions allow the sale of CBD but not cannabis. With the cannabis space gaining momentum, CBD creates a route into that sector with fewer restrictions.
This is particularly true because of hemp, a form of cannabis that doesn't contain THC and that the federal government legalized three months ago. CBD can be extracted from hemp, making it a profitable cash crop. A Youngevity subsidiary has recently acquired a 45-acre base in Florida purely for the purpose of meeting the demand for CBD.
The U.S. government's widespread legalization of hemp through the passage of the 2018 Farm Bill last December has opened the way for a whole range of CBD endeavors. One of the most popular trends is expected to be CBD beverages.
Youngevity, which already has a strong presence in both beverages and CBD via its CLR Roasters and HempFX brands, has made the most of its established expertise to move quickly into this promising young market. The company has added a CBD-infused coffee to its Javalution coffee brand, which will go on sale at the end of May.
"We are extremely pleased with the taste of the product," said Ernesto Aguila, president of CLR Roasters. "It is very exciting to bring a new product to market that has so much interest within the coffee beverage category. I have not seen a door opener like this since Javalution Coffee Company created the first fortified coffees."
CBD beverages are more than just a novelty; they're a way to make CBD consumption better fit with people's everyday lives and socializing, and to blaze a trail for cannabis drinks to follow. By putting CBD in drinks, manufacturers such as Youngevity are making it possible for consumers to enjoy their CBD in common social settings, such as cafes, bars and restaurants. While one person orders an alcoholic drink and another sips a soft drink, a third could be enjoying a CBD drink, all at the same time. YGYI's move helps brings CBD consumption into the mainstream.
YGYI's strategy has been made easier by the relaxed approach of the FDA. While that authority claims jurisdiction over the use of CBD in food and beverages, the government entity hasn't done much to limit its use. In the 21st century, the public will to suppress cannabis use is fading, and resistance against CBD appears to be almost nonexistent. A door has been opened, and companies such as Youngevity are walking in to make the most of it.
The Bigger Beverage Business
Part of bringing CBD into the mainstream is integrating it with other product lines. As long as CBD is separate in its own corner, persuading people to give it a try will be challenging. However, when it's presented as simply one more option among a variety of beverages, raising awareness and use of the substance stands a better chance. That's precisely what Youngevity is aiming to do through a recently announced agreement with water company Icelandic Glacial.
The deal will see the two companies work together as exclusive cross-marketing partners for the next three years. Icelandic Glacial drinks will appear alongside Javalution and other beverages in Youngevity's direct-sales network.
Beyond this, the companies will also collaborate on creating new products targeting the lifestyle, health, food and beverage markets. A drinkable CBD product will be at the forefront of these developments, creating a connection between the purity of Iceland Glacial's water and the relaxing potential of CBD.
This deal hasn't just increased Youngevity's product range. It has given the company more opportunity for growth and product development that will appeal both to the core CBD market and to a wider beverage consumer base.
A Changing Drinks Market
It seems that CBD might become the latest big disruptor in the beverage industry, which was last shaken up by the rise of energy drinks 20 years ago.
The fastest growing premium water brand in the US, The Alkaline Water Company Inc. (NASDAQ:WTER) (TSX.V:WTER), is distributed through more than 150,000 stores, including nine of America's top-ten retailers by size. In 2018, the company announced a range of drinks targeting the health and wellness markets, including a water infused with vitamins and minerals and another with CBD. The company is waiting on FDA approval before launching its CBD water, but once the product is ready to go, it will have great reach thanks to the company's strategy of regularly increasing its distribution network.
Founded in 2016, the New Age Beverages Corporation (NASDAQ:NBEV) is a young and vibrant company with a focus on healthy drinks produced in an environmentally and socially responsible way. In January, the company announced a deal for the distribution of CBD-infused beverages under its Marley brand. The Marley range of organic cold coffees and teas is already an established brand for New Age Beverages and a natural fit for entering the CBD market.
Hi-Fi Hops, Heineken's (OTCQX:HEINY) cannabis beverage, was launched last year in two versions: one with 10 mg of THC and one with 5 mg of THC and 5 mg of CBD. The product is sold in California's cannabis dispensaries and is the result of a collaboration between AbsoluteXtracts, a manufacturer of cannabis-based products, and Lagunitas. "The idea of being a part of a no-calorie beverage infused with cannabis seemed like a perfect next step in our product innovation and a natural way to marry our past with our future," said Lagunitas CEO Maria Stipp.
Beverage giant Constellation Brands Inc. (NYSE:STZ), which owns Corona beer and Svedka vodka, has made the biggest financial commitment so far to advancing CBD beverages. The company has invested $4 billion in Canopy Growth Corporation, one of Canada's largest cannabis producers. The two companies will be working together to produce cannabis drinks, giving the sector a significant boost to its public profile thanks to Constellation's marketing reach.
CBD drinks are a natural combination of two popular consumer sectors, and with so many companies invested in them, this looks likely to be the year they take off.
For more information about Youngevity International, please visit Youngevity International, Inc. (NASDAQ:YGYI).
CannabisNewsWire (CNW) is an information service that provides (1) access to our news aggregation and syndication servers, (2) CannabisNewsBreaks that summarize corporate news and information, (3) enhanced press release services, (4) social media distribution and optimization services, and (5) a full array of corporate communication solutions. As a multifaceted financial news and content distribution company with an extensive team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. CNW has an ever-growing distribution network of more than 5,000 key syndication outlets across the country. By cutting through the overload of information in today's market, CNW brings its clients unparalleled visibility, recognition and brand awareness. CNW is where news, content and information converge.
DISCLAIMER: CannabisNewsWire (CNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with CNW or any company mentioned herein. The commentary, views and opinions expressed in this release by CNW are solely those of CNW and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable CNW and FNM for any investment decisions by their readers or subscribers. CNW and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.
The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, CNW, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer's filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer's securities, including, but not limited to, the complete loss of your investment.
CNW & FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and CNW and FNM undertake no obligation to update such statements.
CannabisNewsWire (CNW) & NetworkNewsWire (NNW) are proud to be affiliated partners of the Investor Brand Network (IBN)
Over the past 10+ years we have consistently introduced new network brands, each specifically designed to fulfil the unique needs of our growing client base and services. Today, we continue to expand our branded network of highly influential properties, leveraging the knowledge and energy of specialized teams of experts to serve our increasingly diversified list of clients.
Please feel free to visit the Investor Brand Network (IBN) http://www.InvestorBrandNetwork.com
FN Media Group, LLC