New Age Bets on New Pot-Infused Drinks
(Bloomberg) -- New Age Beverages Corp., the drinks maker that has surged more than 300 percent since the company teased its plans to enter the emerging cannabis space last month, provided one of the few bright spots in equity markets on Wednesday.
The company released details on the portfolio of cannabis-infused beverages in its Health Sciences Division Wednesday -- just over a month after it first mentioned incorporating cannabidiol. The line of products include CBD-infused teas, sparkling waters and shots, each with 25 milligrams of full-spectrum CBD, the non-psychoactive compound in marijuana. The stock rose 5.7 percent as of 12:45 p.m. in New York, one of the few cannabis-related names to gain Wednesday.
New Age, which makes kombucha drinks and the Coco Libre brand of coconut water, has seen its value surge to as high as $388 million in the past month on its cannabis plans, from less than $100 million at the end of August. It plans to launch the products with major retailers and distributors nationally as soon as the 2018 Farm Bill, which includes the Hemp Farming Act of 2018, is enacted, according to a statement. The move would legalize the use of hemp and open the door for investment and industry growth.
The company’s announcement came out of offsite meetings during the North American Convenience Store Show in Las Vegas. Chief Executive Officer Brent Willis told investors last week that once laws are approved to legalize CBD-infused beverages across the U.S., New Age will become “the first to execute it in real scale and in a professional, responsible way and on a national basis.”
Related: New Age Beverages Hit With First Hold After 400% Pot-Mania Rally
“The demand and interest for these products is unlike I have ever seen in my career,” Michael Cunningham, senior vice president of sales for New Age, said at the event Wednesday. “We intend to provide a full portfolio of offerings in this emerging growth segment, and expect the range of choices for retailers, distributors and consumers to best position New Age to be the leader and authority in the sector.”
As part of the move into the increasingly popular space, New Age initiated the creation of the first CBD industry association for consumer goods, labeled “CBD-CPG.”
Meanwhile, another growing cannabis-drinks player, India Globalization Capital, filed a provisional method and composition patent application with the U.S. Patent and Trademark Office for the treatment of fatigue and energy restoration. The provisional patent allows the company, which recently revealed a branded hemp or CBD-infused energy drink, to discuss openly the CBD energy drink formulation with processors in the U.S., Canada and other countries where the ingredient is legal.
India Globalization Capital also gained Wednesday, rising as much as 21 percent and adding to its more than 200 percent rally since the beginning of September. Tilray Inc., the biggest publicly traded pot stock by valuation, also rose, while the ETFMG Alternative Harvest exchange-traded fund, which tracks the cannabis names, fell as much as 4.4 percent.
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