Canadians might be seeing some significant changes to the cannabis beverage sector this spring as consultations with Health Canada are underway until April 25th 2022. If successful, the changes to the Cannabis Act would increase the current limit of cannabis beverages consumers can purchase up to 48 beverages, a big difference from the maximum of 5 (355 ml) one can purchase now.
The cannabis beverage market has seen steady growth since January 2020, with the market share hitting 2.1% of total cannabis sales in December of 2021. Although the cannabis beverage market only represents 2% of cannabis sales, the beverage space is a new and niche segment that is gaining more and more traction as companies begin to offer a variety of innovative and flavourful products to attract customers.
Allowing consumers to purchase more than five beverages at a time might help boost sales for cannabis beverages in Canada and furthermore having a positive impact on a company’s top line, especially for company’s focused on expanding in the growing beverage market.
Allowing consumers to purchase more than five beverages at a time, may boost the overall sales of cannabis beverages across Canada this year.
Molecule Holdings Inc.
Cannabis beverage company Molecule Holdings Inc. (CSE: MLCL) (OTC: EVRRF) has been making some tremendous strides in the beverage sector this year, with the launch of various new products and the entry into new markets such as British Colombia, Northwest Territories and Nunavut. Since the debut of MLCL’s new coffee inspired beverage Canajo, the company has indicated that it has received its third purchase order for Canajo, with approximately 7,000 units sold in its first full month in British Colombia. The CEO of MLCL Mr. David Reingold was quoted “We are quite pleased to see sales in British Columbia exceed our initial expectations for CANAJO. We look forward to seeing the impact of our marketing efforts and in-store activations on increased volumes for CANAJO and our other brands”.
MLCL has also indicated that the company will be launching seven new cannabis beverages this spring and summer under house brands: Canajo, EMBODY, PHRESH, and its partner brand PROPER. The new flavors include CANAJO Regular, CANAJO Espresso Spice, EMBODY Blood Orange + Rosemary Sparkling Red Tea, EMBODY Mint + Honey Sparkling Green Tea , PHRESH Summer Punch, PHRESH STRAINS Pineapple Express, and PROPER Blueberry Pomegranate. PHRESH Strains is a new branded product line which is meant to showcase the familiar flavours and aromas of popular cannabis strains. This is an interesting twist and differentiation of other beverages on the market, and we believe this product may be geared more towards the seasoned Canna-ssieur.
Molecule has also grown exponentially in Ontario as MLCL has ranked 2nd in unit sales in retail sales through the Ontario Cannabis Store, and has hit the top stop ranking 1st in online sales through the OCS in the 10mg category. CEO of MLCL, Mr. David Reingold stated “It is very exciting to have PHRESH be a proven leader in the Ontario beverage category. The overall year over year unit beverage sales have grown substantially. We feel this is a combination of legacy consumers adding beverages to their baskets and new consumers experiencing the category in a familiar way”. Molecule’s ranking on the Ontario Cannabis Store is no small feat for any cannabis company considering the OCS currently has over 70+ different beverage products in store.
News that The Ontario Cannabis Store is expected to be launching over 200 cannabis products was posted on the OCS reddit page by reddit user /OcsweedThrowaway and has provided a list of cannabis products that will be available at OCS stores on April 7th and online on April 12th. After going through the list of products, we spotted the 7 new products Molecule will be launching in early April!
According to MLCL’s investor presentation, the company is projecting to be cash flow positive in Q3 of 2022 with over 600,000 units sold per quarter. These are huge numbers for a company only valued at approximately $9 Million right now and seeing that MLCL is expected to be cash flow positive sometime this fall, we believe that Molecule is trading at a discounted valuation considering its revenue and cash flow projections in 2022!
Forward Looking Statements: This article may contain "forward-looking information" (as defined in applicable Canadian securities legislation) that is based on expectations, estimates and projections as of the date of the content is published on this website. Wherever possible, words such as "anticipate", "believe", "expects", "intend" and similar expressions have been used to identify these forward- looking statements. Information in this article has been furnished for your information only, is accurate at the time of posting, and may be superseded by more current information. Except as required by law, we do not undertake any obligation to update the information, whether as a result of new information, future events or otherwise. This article should not be considered as personal financial advice. Full Disclosure: None of the companies mentioned in the article are clients of the parent company of EquityInsight.ca Directors of the parent company of EquityInsight.ca may buy, hold or sell the securities before during or after this publication.