On this, the first anniversary of Canadian cannabis legalization, pot investors have another milestone to celebrate. “Cannabis 2.0” is officially here, meaning a whole new era for the cannabis industry can begin.
“It’s official, edibles and cannabis infused beverages are legal in Canada,” says Rich. “Now we only have to wait sixty days for them to begin appearing on shelves. So I really anticipate this starting to show up January 2020.”
Along with cannabis edibles and beverages, extracts and other derivatives are also legal now. This is a beacon of hope for investors who have been dissatisfied with pot stock performance over the last few months. So how good exactly is this good news? Rich breaks it down.
Cannabis 2.0 Will Generate Billions
According to Deloitte, Cannabis 2.0 will generate a total of $2.7 billion CAD annually in Canada alone. Of that number, $1.6 billion will be from edibles, $500 million will be from cannabis-infused beverages, and the rest will be from other forms of extracts.
But as Rich notes, there’s still an interim period between the products being legalized and the products hitting shelves. During the next 60 days, federal license holders will need to provide notice to Health Canada of their intent to sell new products. This means that the earliest that these products can legally be sold in stores is mid-December. Additionally, it will take at least a few months after that for revenue to start showing.
“I predict it will be Q2 2020 that we begin to see 10% or 20% revenue growth from Cannabis 2.0,” says Rich. “Some companies will go up 100% though, and we will see new 52-week highs.”
So which companies should investors be looking at to benefit from the new verticals created by Cannabis 2.0?
Aurora Will Be a First Mover
Already ahead of the game, Aurora Cannabis Inc. (TSX:ACB) (NYSE:ACB) has received a Health Canada license for its edibles production facilities. While its products and packaging still need to be approved, Aurora is still the most likely candidate to be a first-mover on cannabis edibles in Canada.
“Aurora’s already one of the biggest in the world, and is in 25 countries,” explains Rich. “And I believe it has enormous global potential from here. Anybody who gets into Aurora now is going to see 100% or 200% returns.”
ACB stock dipped below $5.00 for the first time this week, but Rich predicts it will shoot back up to at least $10.00 as Cannabis 2.0 kicks it into high gear.
BevCanna & Zenabis Will Capture the Cannabis Beverages Market
Just last month, Rich interviewed BevCanna Enterprises Inc. (CSE:BEV) (OTCPK:BVNNF) Chief Commercialization Officer Emma Andrews. During that interview, Andrews discussed her company’s two announced beverage lines—Anarchist Mountain and Gruv—as well as its cannabis powder technology Deeper Green.
With all of these products in place, and backed by the right technology, the proper licenses, and an ideal location, BevCanna is in a great position to capitalize on the half-a-billion-dollar cannabis beverages market in Canada.
Zenabis Global Inc. (TSX:ZENA) (OTCPK:ZBISF) is also entering the cannabis beverages space and is also in a good position to benefit from Cannabis 2.0. In August, it received a supply of water-soluble cannabis-infused inputs that will be used to produce a line of cannabis-infused products.
Some of those products will be beverages that will have an onset time of “less than five minutes.”
What do you think? Are ACB, BEV, and ZENA the right stocks to buy today? Are there any other companies that you think will explode due to Cannabis 2.0? Let us know what you’re thinking in the comments below.
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