Phivida Holdings Is Going All In On The Cannabis Beverage Market

Phivida Holdings Is Going All In On The Cannabis Beverage Market

The proprietor of Corona beer knows the cannabis industry is a force to be reckoned with and isn’t taking any chances. We think this investment is just the beginning of something much larger and expect to see major acquisitions and investments declared during the following year. This significant announcement comes on the heels of Molson-Coors’ and Southern Glazer decisions to enter the non-alcoholic cannabis infused drink. It’s a clear trend as majors from large alcohol are pouring into in the cannabis sector to capitalize on the growth opportunity when defending against the disruption nature of adult use cannabis to their century old monopoly.

The cannabis market has gone mainstream and this is a really exciting growth opportunity. Today, we’ve highlighted Phivida Holdings (VIDA.CN) (PHVAF), which is focused on capitalizing on the global cannabis industry, and more specifically, the cannabis derivatives and consumer products marketplace.

Last week, Phivida and WeedMD Inc. (WMD.V) (WDDMF) announced the signing of a definitive agreement in their joint venture Cannabis Beverages Inc. project. This was a substantial announcement and was first announced in the spring of 2018. The joint venture has enormous potential and is focused on manufacturing, marketing and distributing cannabinoid-infused drinks for the medical and future adult-use cannabis markets. Collectively, Phivida and WeedD have gained early mover status to capture a leadership share of the high anticipated cannabis food and drink market, slotted to open up in Canada in 2019.

We’re positive on what both companies bring to the joint venture and will track how the teams execute this. The joint venture will operate one of the first cannabis-infused beverage production facilities in Canada.

WeedMD will be the exclusive cannabis supplier and distributor for CanBev cannabis-infused drinks and will designate production space at its 610,000 sq. ft. facility that will supply CanBev with extensive manufacturing infrastructure, including 25,000 sq. ft. of packaging area and cold storage, in addition to adequate space to expand for future growth. This gives WeedMD the opportunity to enter into the highly anticipated edibles marketplace and leverage existing products and brand expertise with Phivida. This also gives CanBev the benefit of capitalizing on the aggressive market from Phivida present management team, and former senior executive of Red Bull North America.

Phivida will be sublicensing its present and future trademarks, intellectual property, branding and packaging to CanBev. Phivida has also agreed to direct new product innovation, research and development, formulation, packaging and branding for CanBev.

Click here for a movie on the WeedMD-Phivida joint venture project, Cannabis Beverages Inc.. .

About CanBev and the Growth Opportunity

CanBev is organised as a new startup company, with both businesses committing to funding the CanBev project. CanBev is a more concentrated and non-dilutive approach to the vertical integration story. The agreement between the companies calls for a future spinout and a public record, providing added value to the existing shareholders at Phivida and WeedMD. We’re bullish on this and view this as a very strategic way of creating value for investors.

As a former produce cultivation and complicated, Strathroy has over 90 acres of growth potential with 14 acres under glass and ready easily retrofitted into WeedMD’s high-performance farming systems. Strathroy is only two hours from Toronto the largest market in Canada, which is now opening-up to private distribution under the new provincial government. This is a really strategic asset that provides massive potential.

When it comes to cannabis investments, it starts with the management team and in 2018, Phivida has made several strategic additions to an already strong leadership group. The most significant improvement was the appointment of James Bailey as Chief Executive Officer (CEO). He was the former President of Red Bull Canada and led the development of an entirely new category of alternative beverages, an experience that lends great value to Phivida as it prepares to launch into the global market.

Bailey will be responsible for building Phivida into an internationally recognized manufacturer and replicating his success with building a new alternative beverage sector at Red Bull. He brings proven executive leadership and extensive expertise in brand marketing and athletic endorsement for multinational consumer brands.

Earlier this year, Phivida appointed Michael Cornwell as Chief Marketing Officer. Cornwell was the former CMO for Samsung and Microsoft and Marketing Director for Red Bull Canada. At Phivida, Cornwell will design and implement the overarching brand marketing strategy to increase market share in the CBD market.

Phivida’s Chairman of their Advisory, Jon Silverman, hails from big alcohol.

WeedMD has an impressive consumer products focused management, with director Kevin McGovern that has co-founded over twenty-five (25) companies, six of which have become world/category leaders. McGovern direct negotiator/principal in more than fifteen (15) global joint ventures. McGovern is a co-founder of SoBe, the fastest growing beverage company ever in the US before Pepsi purchased 90 percent for USD $370 million and has served on many public company boards.

We’re positive on those backgrounds, especially as a result of joint venture with WeedMD. We expect this sort of leadership to play a large part in the future success of CanBev and will track the way the team works to create value.

An Undervalued and Emerging Opportunity

The market reacted very favorably to this announcement and this is a trend to keep an eye on. Phivida owns strategic assets to help drive significant value to the joint venture and WeedMD represents an extremely accomplished partner.

Last month, Phivida signed an exclusive national agreement with Natural Specialty Sales (NSS), which is recognized as the industry leader in Natural/Specialty channel trade in america. Phivida’s soon to be launched products are now the exclusive CBD infused drink manufacturer and health supplements products represented by NSS accessing over 2,400 retail locations.

The CBD market is one of the most exciting opportunities and we think it’s been flying under the radar. The relationship with companies like WeedMD and NSS can bring Phivida’s CBD company to the next level and we are bullish on this.

Published at Wed, 22 Aug 2018 11:24:16 +0000

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