Zenabis Global Inc. (TSX:ZENA) (OTCPK:ZBISF) has been on Rich’s radar for a long time now. He’s been championing the cannabis producer for ages, and in his recent profile referred to it as “a gem of a company.”
Now, ZENA has some exciting news to report. Per a press release published late yesterday, Zenabis Global entered into a definitive agreement to receive a supply of water-soluble, odorless, flavorless and colorless cannabis-infused inputs. These inputs will be used to produce a line of cannabis-infused products, including beverages that will have an onset time of “less than five minutes.”
“This Agreement puts Zenabis in a strong position to compete in the cannabis-infused beverage market once these products are legalized in Canada,” said Andrew Grieve, Chief Executive Officer of Zenabis.
“That’s unbelievable,” Rich says. “This is a really, really good company. Zenabis is going to be a giant, you can book it.”
Zenabis Global’s New Beverage Initiative
The beverages that Zenabis is planning to produce will be infused with both THC and CBD in a myriad of combinations.
One such beverage will be a collaboration with cultured tea beverage-maker Hillsboro Corp Inc., which Zenabis purchased a majority stake in earlier this year. The collaboration will yield a line of CBD-infused kombucha products. There’s no word yet on when the products will hit shelves, but it will be sometime following the legalization of cannabis edibles on October 17, after which retail can begin in December.
As Grieve notes in the press release, the Canadian market for cannabis-infused beverages is expected to be worth $529 million, according to estimates from Deloitte.
“The ability to infuse cannabis in beverages, without affecting their taste, smell or appearance, strengthens Zenabis’ position relative to the many other companies planning to commercialize similar products,” added Grieve.
Zenabis Global’s position has been an interesting one to note. In November last year, the company had a stock price of $6.75, but today opened the market at $1.07. While this represents a dramatic fall from grace for some industry watchers, for Rich, it’s a fortuitous buying opportunity.
“When you see a stock like this trading at these prices, that is a gift from the stock gods,” says Rich. “As Zenabis is one of the few companies licensed to sell their CBD, this is absolutely enormous.”
Cannabis-Infused Beverages Have Major Potential
Globally, cannabis-infused beverages are expected to be worth $5.04 billion USD by 2026. This sub-sector is increasingly being considered the next great frontier in the cannabis industry, and like Zenabis Global, many companies are looking to take advantage.
BevCanna Enterprises Inc. (CSE:BEV) (OTCPK:BVNNF) is one such rival company. It specializes in the cannabis drinks market and has already announced two separate beverages lines, Anarchist Mountain and Grüv. Like ZENA, it is also testing water-soluble cannabis inputs to explore CBD- and THC-infused powdered drinks.
Likewise, HEXO Corp. (TSX:HEXO) (NYSE:HEXO) has thrown its hat into the ring, though not by itself. Last year, the Canadian cannabis company formed a joint venture with the Canadian business unit of Molson Coors Brewing Company (NYSE:TAP). Through the JV, the two companies will develop non-alcoholic, cannabis-infused beverages for the Canadian market.
Zenabis is a Sleeping Giant of the Cannabis Space
As Rich has noted in the past, Zenabis Global has consistently outperformed expectations. Two weeks ago, it revealed that it outperformed its original design production capacity for Q2 2019 by 35 percent. In the second half of the year, it expects to cultivate more than 18,000 kgs of dried flower.
When its cultivation facilities—which are on Canada’s west and east coasts—are fully operational, Zenabis expects to have an annual design capacity of approximately 490,800 kg of dried cannabis.
“I have been to their facilities, they are impressive, they are huge,” says Rich. “I have shares in Zenabis, I want more.”
Be sure to check out some of Rich’s other videos about Zenabis for more info on this exciting company. Also, for more info on BevCanna, check out Rich’s interview with BevCanna Chief Commercialization Officer Emma Andrews.
If you have thoughts on the cannabis-infused beverage market or want Rich to profile a specific company, let us know about it in the comments below!
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