BevCanna Enterprises Inc. (CSE:BEV OTCMKTS: PMCB) is on the brink of greatness as Canada moves to legalize CBD infused beverages and edibles. The legalization comes at a time when the company has established world-class facilities and infrastructure, as it looks to take advantage of emerging opportunities in the multibillion-dollar industry. It goes without saying that the company is on its way to delivering robust revenue growth, given the investments already made.
Improved Manufacturing capacity
While the company’s revenue margins are currently flirting with lows of $0.5million that should change sooner than later. A 40,000 square feet manufacturing facility able to produce up to 72 million bottles of CBD infused beverages underscores the company’s tremendous potential in the emerging marketplace. BevCanna Enterprises has already developed a range of CBD beverages that include iced teas, lemonade, and fruit-flavored spring water awaiting the opening up of the market.
The opening up of the CBD beverage market should allow the company to capture a substantial amount of market share as a fast mover. In addition to producing its own products, BevCanna Enterprises has already inked an agreement to produce Higharchy Ventures branded CBD beverages as part of a diversification strategy.
Similarly, the company has inked a strategic partnership with Nextleaf Solutions. The partnership paves the way for the company to gain access to valuable IP related to water-soluble cannabinoids. The company will be able to leverage the IP on the development and manufacturing of CBD beverages as well as white label products developed by third parties.
The patented technology at stake should allow BevCanna Enterprises to come up with CBD beverages that are not only odorless and tasteless but with superior taste and consumption experience. The extraction process in question should also complement the company’s premium, spring water base.
The company also holds a lease for a 130-acre cultivation site in British Columbia from which it plans to produce over 100,000kg of biomass. The biomass should be more than sufficient in positioning the company as a global leader in the production of high-quality cannabis products.
BevCanna Revenue and EBITDA Outlook
CBD beverage and edible markets are poised to become the fastest-growing segment in the cannabis segment starting next year. Initial studies have shown that Canada’s edibles and the topical market could be worth more than $2.7 billion starting next year.
BevCanna is one of the companies well positioned to take advantage of the tremendous opportunity given the progress it has made on the production of CBD beverages. The company has already established a robust turnkey manufacturing solution for cultivation, processing, and infusion of CBD beverages. Revenues of $0.5 million are likely to explode to CA$39 million as of next year, as the company moves to produce its own CBD products and for third parties such as Higharchy Ventures
EBITDA, as a result of robust revenues growth, could more than quadruple to CA$10.1 million from the current CA$2 million. The company also looks set to maintain cash flow positive of about CA$8.2 million from the current CA$3.6 million.