EXCLUSIVE: Early Legalization Catalyst for Consolidation, Cannabis Companies Brace – Molson Coors Beverage (NYSE:TAP), Coca-Cola (NYSE:KO), Constellation Brands (NYSE:STZ)
The lack of access to conventional financial sources for cannabis businesses is the main problem facing cannabis entrepreneurs. Banks will not provide loans to cannabis business owners due to federal law.
As a result, companies like Verano Holdings Corp. VRNOF and Cresco Labs Inc. CRLBF are now free to grab as much market share as possible while positioning themselves as attractive acquisition targets for highly anticipated federal cannabis regulations.
Big tobacco companies like Philip Morris International Inc. PM have been exposed to cannabis for almost a decade, but haven’t made any real progress because the fledgling industry’s risk tolerance is still low.
In order to prepare for widespread adoption by adults, companies are making easier-to-consume products like drinks and gummies – something that could be of interest to drink brands like Coca-Cola Co KOand Constellation Brands, Inc. ZST.
Vivien Azermanaging director and senior research analyst for beverages and tobacco at Cowen, believes established brands will participate in the cannabis industry once regulations are in place.
“If you look at Coke and Pepsi, both companies have recently entered the alcohol industry — their risk tolerance for regulated products is starting to shift,” Azer told the conference. Benzinga Cannabis Capital Conference 2022 in Chicago on Tuesday. “If you had asked me five years ago if these companies would get involved in cannabis, I would have said no.”
Molson Coors Brewery FAUCETthe maker of Coors, Blue Moon, the Miller brand and others have announced a joint venture with Quebec-based HEXO, now known as Truss, to produce cannabis-infused drinks to put on dispensary shelves.
“We expect continued growth in the category,” the analyst said.