Departures Capital

About the Author Departures Capital

We invest with the philosophy that knowledge and research can give you an advantage in the stock market. As a result, we are dedicated to empowering investors like yourself with information and tools that can help you make smart investment decisions. Departures Capital wants to enable people like you to 'depart' from a regular life and live beyond the point of worrying about money.

The CBD Beverage Market and How this Stock Is Set to Capitalize

As the cannabis sector matures, we are seeing the true potential of CBD’s and how many products they can be integrated into. One very popular market is the beverage market, and we have already seen a huge investment from constellation brands into canopy growth for over 4 billion dollars. This partnership will allow the beverage maker to integrate CBD into their beverages in the future if they decide to. The CBD and Hemp infused beverage market in North America is estimated to reach 1.4 Billion by 2024.

One company that is set to capitalize on the CBD/Hemp Beverage market is the The Alkaline Water Company (WTER). This company has a very strong brand of water that is sold across America in all 50 states and the District of Columbia.  Some of their retail clients include Safeway, CVS, 7-Eleven and Walmart just to name a few. The company prides itself with its flagship “Alkaline88” premium brand of drinking water that is very popular across the country. The company recently had some very good news announcing that they sold $3.8 million dollars worth of bottled water in may of 2019 which was a record-breaking month for the company. On top of these great sales numbers, Alkaline88® was ranked as the fastest growing alkaline water over the 13 week period ending May 8, 2019, to solidify the fact that the company is building a successful brand.

A few more important highlights include the company beginning sales to over 1100 convenience stores nationwide, steady 29% sales growth at Walmart and Northeastern sales were up over 100% with key customers including Shaw’s, Shoprite, and Bozzutos. This is all great news for a company that is looking to get into the CBD/Hemp beverage market, and in my opinion branding and having a reputable name is extremely important.

Now we are going to talk a little bit about the company’s plans to enter the CBD/Hemp Beverage market. The company has a separate beverage division called the A88 Infused Beverage Division (A88 Infused) — it’s a wholly-owned subsidiary of the company that acts as an incubator for new ideas and technologies that will bring new product development to the Alkaline88®brand. The company believes that they are poised to capitalize on the passage of the Agriculture Improvement Act of 2018 (Farm Bill), which removed hemp from the federal Controlled Substances Act, by introducing hemp extract-infused beverages. As A88 Infused grows with its consumers, they will strive to provide value-added products that fill a consumer need, while remaining within their core competencies. They expect to meet this need by creating a new line of hemp extract-infused waters; subject to appropriate legal and regulatory guidance and/or approval.

The Alkaline Water Company is also working with Archpoint which has been engaged to give the new hemp-infused water brand and their flagship product, Alkaline88 a look and feel that captures the lifestyle and ‘clean beverage promise’ that consumers want.

With all the recent news, the company looks to be building a very successful brand with the capabilities to integrate CBD/Hemp into their beverages in the near future when the market allows.

Now let’s talk about the stock and how its been doing over the past few months. The stock is currently trading at $2.11 on the TSX venture exchange and has a current market cap of just 87 million dollars. The stock is very close to 52-week lows and could be a very interesting company to consider for someone who is looking to add some exposure to the CBD/Hemp market or believes in the future prospects of CBD/Hemp infused beverages. The Alkaline water company might be a great stock to take a look at.

Key Risks

  • Competition – The liquid beverage market has strong competition. As the industry continues to grow more companies may enter and increase competition within the industry.
  • Execution Risk – The Alkaline Water Company needs to execute on the commercialization of its new products, maintain or grow is production capabilities, and maintain or grow its distribution. As is inherent in any expanding company its expansion plans are susceptible to execution risk to complete on time and on budget.
  • Third-Party Risk – The Company is dependent on co-packing agreements, third party distributors, and related infrastructure to expand its operations. Factors may affect partnered companies in a positive or negative manner which could have an impact on The Alkaline Water Company which are out of its control.

To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.


Disclosure: The Author has a Long position in Alkaline Water Company stock


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