RavenQuest BioMed (CSE:RQB) Enters Cannabis Beverage Market with Specialty Tea Producer JV
When people think of cannabis, the first thing they think about is smoking, then vaping and to a lesser extent eating it, in a brownie perhaps. But what about drinking cannabis? Until recently, the idea of drinking cannabis wasn’t really on most people’s radar. Yet, soon it will be and it’s important for cannabis companies to start securing partnerships with beverage companies to secure a spot in this promising side of the market. That’s another reason for investors to follow RavenQuest BioMed Inc’s (CNSX:RQB) (OTCMKTS:RVVQF) (FRA:1IT).
Ravenquest and Not-So-Gentle Tea Company (NSGT) have formed a Joint Venture that will develop and sell THC and CBD infused teas and similar products in Canada. NSGT has built a close following for its range of uniquely flavored, even bold, black and herbal tea blends, which have created a new and growing niche in the marketplace. NSGT teas appeal to those, who like ‘bite’ in their foods and drinks: espresso, red wine, the kind of beer made by Trappist monks and triple-cream brie or Roquefort cheese.
Tea serves as an ideal vessel for RavenQuest to take advantage of the Canada’s imminent legalization of cannabis-based edibles and beverages. Apart from the herb-based nature of infusion-based beverages, tea presents more ‘democratic’ business opportunities, allowing for a greater number and type of sellers to participate:
Most recreational stores lack the physical room to store adequate bottled inventory. Rather, teas will enable sellers to stock much higher quantities of product regardless of the size of their store. Clearly, NSGT has much to gain through the JV, adding another specialty product to its menu. Nevertheless, Ravenquest may be the bigger winner in the long-term. Indeed, beverages in general represent one of the largest potential markets for cannabis based ‘edibles’. A recently published report predicts that the cannabis beverages market, now valued at some $1.6 billion in 2018 could more than triple to generate some USD4.4 billion by 2025 (Source: Globenewswire). Moreover, and in the context of cannabis and the concerns that have made its legalization a highly complex process, beverages could serve as the ‘highway, leading to wider acceptance, use and demand for cannabis-based products.
Different countries and States will adopt different approaches to regulating the edible cannabis market. The United States has taken a somewhat bolder approach to Canada, where caution, as ever, prevails. Canadian health authorities will impose a limit of 10 milligrams of THC per package for edible products and beverages.
More importantly, in the context of the Ravenquest/NSGT Joint Venture, Canada will ban the combination of CBD and/or THC with alcohol (or items that could be associated with alcohol). In contrast, some U.S. States will allow the sale of cannabis infused alcoholic beverages (or beverages typically associated with alcohol) and many cannabis companies are betting on the potential strength of this market. Constellation Brands, brewer of Corona beer, plans to launch a cannabis-based variation of the famous beverage; Molson-Coors has followed suit 9Source: CNBC). While Canada has not made any provisions for this, the demand for cannabis-based beverages of all kinds (alcohol or not) is bound to grow rapidly.
Legal and bureaucratic issues aside, it’s evident that beverages will become an essential sector, perhaps even the most important, of the cannabis market. And it’s important for smaller but high-quality focused producers like Ravenquest to establish a base and a reputation in this space. And the timing could not be more ideal. Canada risks falling behind as some American brands are already planning to sell infused beverages to Canadians when the legalization of edible products and cannabis beverages comes into effect.
The advantage for a tea-based cannabis infusion is that no cannabis brand marketing will be permitted in Canada. Thus, producers , from the US (such as Molson-Coors) adapting alcohol based or inspired THC/CBD infused drinks, will not be able to exploit that ‘leverage’. Meanwhile, tea could encourage the development of cannabis-based beverages as a healthy alternative to smoking cannabis and/or tobacco or drinking alcohol. That’s why Ravenquest’s JV with NSGT represents a significant step for the cannabis company. Note that Ravenquest and NSGT will not be selling or marketing CBD/THC enhanced teas until such time as Canadian Law formally allows the marketing, distribution and sale of CBD/THC edibles – which should occur before the end of 2019.
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