MMJ Phytotech wants to make cannabis drinks that get you high
Cannabis investor MMJ Phytotech has turned its eye to pot-infused food and drinks, buying a 3.6 per cent stake in Canadian cannabis beverage start-up BevCanna.
MMJ has invested $C500,000 ($509,000) in the business, which is aiming to become a white-label producer of drinks that contain both CBD and THC.
CBD (or cannabidiol) is an active cannabis ingredient generally used in medicinal products because it doesn’t get you high.
THC (tetrahydrocannabinol), on the other hand, is the main psychoactive component of cannabis and does provide a high.
THC-based drinks are on the bleeding edge of product development for ASX cannabis plays — and reflect the growing number of countries and States that are legalising recreational cannabis products.
Just last week Canada’s Senate voted to legalise recreational marijuana — making it the first major western country to do so.
Canadian sales of recreational marijuna are expected to reach $US6.5 billion ($8.7 billion) by 2020 — outstripping the $US5.1 billion Canadians spent on alcoholic spirits in 2017
The market is even bigger in the US states that have so far legalised recreational pot.
BevCanna — which is so new it doesn’t even have a website yet — is now focused on the medical cannabis market, but “the recreational market represents potential future upside”, MMJ said.
Health Canada is expected to finalise its guidelines for selling cannabis edibles in the next 12 months, after final sign-off of the new laws.
With future funding rounds, BevCanna will start to build a factory on the site of a spring water bottling facility in British Columbia.
This is MMJ’s second cannabis drinks investment in two months, having purchased a business Dream Water in a $CAD34.5 million deal last month.
Dream Water sells a “liquid sleep shot” and “sleep powder” marketed as “a proprietary blend of sleep ingredients widely known to promote effective sleep, among many other benefits”. However, this product doesn’t provide a high.
At the end of the March quarter, MMJ had $4.3 million in cash on hand, having invested $3.6 million over the past three months.
MMJ shares started the year on a high at 58.5c in January and are sitting at 30.5c this week.
Stockhead has contacted MMJ for comment.