As competition for Canada’s cannabis beverage market is heating up, we expect that Canopy Growth Corporation (Nasdaq: CGC) (TSX: WEED) and HEXO Corporation (Nasdaq: HEXO) (TSX: HEXO) will lose market share to The Boston Beer Company, Inc. (NYSE: SAM).
Yesterday, the craft beer brand announced plans to capitalize on Canada’s cannabis beverage market through the launch of TeaPot, a new line of cannabis-infused iced teas. The product line is made with real lemon black tea and infused with Pedro’s Sweet Sativa from Entourage Health Corporation (TSX Venture: ENTG) (OTCQX: ETRGF), a high-profile Canadian Licensed Producer (LP).
The Boston Beer Company expects the beverage line to be available in select Canadian provinces in July and we should see strong consumer demand for it. The cannabis beverage will be sold under Entourage’s retail brand, Color Cannabis, and we are bullish on the amount of revenue the product line could generate.
According to Headset retail data, Canada’s infused beverage market share has increased by nearly 850% since 2020 and is approximately twice the size of the United States (US) cannabis beverage market. We have been closely following the performance of the cannabis beverage market and expect the vertical to record strong growth in the year ahead.
The Boston Beer Company is executing on a strategy to become the most innovative consumer-focused beverage company and we believe its leverage to the cannabis beverage market could help it accomplish this goal.
During the last year, we have seen several major alcohol brands enter the cannabis sector. Although we are favorable to the increased focus on the vertical, there is no clear cannabis beverage leader and we will monitor how the industry advances from here.
Through this relationship, The Boston Beer Company will be well positioned to capitalize on the US cannabis beverage market once federal legislation allows for it. We believe the timing of the development could not be more perfect for the craft beer brand. During the last year, the company lost a good portion of market share in the hard seltzer vertical and we believe that its management is looking for a new growth opportunity.
We believe cannabis can prove to be the answer The Boston Beer Company needs and expect Entourage to benefit from the relationship in the near and long-term. At current levels, we believe the Canadian cannabis company has a favorable risk-reward profile and will continue to monitor the trend from here.
https://technical420.com/cannabis-article/will-boston-beer-company-take-market-share-from-canadian-lps-in-the-cannabis-beverage-vertical/#
Comments