Koios Expands into Cannabis Functional Beverages
July 19th, 2018
Exclusive, News, Top Story
The cannabis industry is projected to reach $50 billion by 2026, according to Cowen & Co., driven by the legalization of adult-use cannabis across several states. While cultivators and dispensaries garner much of the attention, investors may want to take a look at ancillary companies that produce highly specialized products that could experience faster growth rates and have higher barriers to entry.
Koios Beverage Corp. (CSE: KBEV) (OTC: SNOVF) is developing cannabis-infused beverages that could make a dent in the nearly $2 trillion beverage industry. Investors may want to take a closer look at the stock given the industry’s recent developments and the company’s strong track record in producing functional beverages.
Growing Interest in Cannabis Beverages
The global beverage market is worth nearly $2 trillion and is projected to grow at a three percent compound annual growth rate through 2021, according to Research and Markets. In the U.S., the market is worth upwards of $350 billion, with alcoholic beverages making up about 60 percent of total revenue, according to Park Street, which added that smaller brands have been gaining market share across the board and disrupting the industry.
Last October, Constellation Brands Inc. (NYSE: STZ), a leading international producer of beer, wine, and spirit brands, announced a C$245 million investment in Canopy Growth Corp. (TSX: WEED), a leading licensed producers of cannabis in Canada, in exchange for a 9.9 percent equity stake. The move signaled that many leading beverage companies believe that cannabis has the potential to dramatically reshape the market.
Constellation Brands and many larger companies have been waiting on the sidelines thus far, but there are signs that the market could experience a near-term breakout. For example, the Cannabis Drinks Expo will debut in San Francisco next year and bring together drinks producers, manufacturers, brands owners, distilleries, and breweries, along with the beverage supply chain, to discuss the implications of legal cannabis on the market.
Koios’ Cannavated Beverage Looks to Capitalize
Koios Beverage recently announced the creation of Cannavated Beverage Co., a wholly-owned subsidiary, that will be among the first companies to produce cannabis-infused beverages. By leveraging its experience in the functional beverage space, the company aims to develop a line-up of beverages that merge the nootropic health benefits of its existing drink formulas with the significant potential of cannabis for medical users.
On June 28 the Company announced the first of its moves into the cannabis space, with an exclusive agreement with CanCore Concepts Ltd., which owns the industry-leading Keef Brands line of cannabis products.
The licensing agreement allows Keef Brands to include the Cannavated nootropic formula in Keef’s line of cannabis beverages. Keef Brands, through its licensed manufacturing partners, will produce, market and sell a line of beverages that are not only infused with cannabis, but also contain the nootropic supplements from the Koios line of brain enhancing functional beverages. The resulting product will be the first in the world to combine cannabis infusion with nootropic supplements that enhance the consumer’s mental acuity.
“The industry has proven it is going in the direction of cannabis-infused drinks,” said Koios CEO Chris Miller. “It’s healthier. Nobody wants to smoke anymore. The market for beverages is vast, especially when you consider the aging population and the demand for medical cannabis among seniors … We are especially excited about the possibility of combining CBDs with our proprietary nootropic blend to create cannabis-based cognitive beverages.”
Koios has been traditionally focused on developing functional beverages that improve cognitive performance. Using a proprietary blend of nootropics and natural organic compounds, the company’s growing beverage line-up aims to enhance productivity without the use of harmful chemicals or stimulants. The ingredients are specifically formulated to target brain function by increasing blood flow, oxygen levels, and neural connections.
With a distribution network of more than 2,000 retail locations across the U.S., the company has a well-established presence and is well-prepared to scale up into the cannabis industry. The company also has agreements with major distributors like Europa Sports, Muscle Foods USA, KeHE, and Wishing-U-Well, among others. These distributors are capable of reaching more than 80,000 locations, including Whole Foods and other major retailers.
The company also expanded into the Canadian market with direct shipments through its new online sales portal at www.mentaltitan.com/shop. After ramping up production following the construction of a new factory in Colorado, the company hopes to expand beyond Canada and the United States to international markets around the world.
The company’s experienced management team is backed by an equally impressive advisory board. Earlier this month, the company announced that CoorsMiller executive Josh Luman would join its board of advisors. Mr. Luman has built his own beverage brand and is an executive at one of the largest beverage brands in the world, making his expertise and industry experience priceless for the company moving forward.
Koios Beverage Corp. (CSE: KBEV) (OTC: SNOVF) represents a compelling investment opportunity focused on both nootropic beverages, and soon, cannabis-infused beverages. With Constellation Brands’ investment in Canopy Growth, the cannabis industry appears to be quickly moving in the direction of beverages as users look for alternatives to smoking and vaping, which may have adverse health effects associated with them.
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