Sproutly (SPR.C) is making an entrance into the burgeoning cannabis-infused functional beverage scene with its newly-developed line of cutting-edge cannabis drinks.
In the US alone, Canaccord estimates that by 2020 the CBD and THC-infused beverage markets could be valued at $260 and $340 million, respectively.
These drinks are made possible through Sproutly’s acquisitions of water-soluble cannabis technology. In August, Sproutly acquired Infusion Biosciences. It is their proprietary technology, Infuz2O, which is capable of delivering rapid onset water soluble cannabinoids in drink form
The technology behind Infuz2O ensures the cannabinoids in Sproutly’s beverages achieve peak effectiveness in under five minutes and wear off within 90 minutes. This is key to Sproutly’s success in an industry where everyone is creating some variation of a cannabis-infused drink.
The company’s initial portfolio includes three beverages, each tailored for a different purpose. One provides energy, another relieves stress and the final beverage is a sleep-aid.
Sproutly’s initial drink portfolio:
- Focused Energy Drink – Formulated to deliver mood uplifting & focused energy without the use for caffeine or stimulants. Containing a blend of minerals, vitamins, natural plant chemicals, natural flavors, and Infuz2O derived from one or more strains of cannabis to complement the experience.
- Relaxation Drink – Formulated to deliver relaxation and stress relief. Containing a blend of minerals, natural plant chemicals, natural flavors, and Infuz2O derived from one or more targeted strains of cannabis to complement the experience.
- Sleep and Anxiety Relief Drink – Formulated to reduce anxiety and assist restful sleep. Containing a blend of minerals, plant and other natural chemicals, natural flavors, and Infuz2O derived from a targeted variety of hemp to complement the experience.
Keith Dolo, CEO of Sproutly, said his company’s aim is to distinguish itself from competitors by leveraging the “suite of proprietary water soluble technologies” his company has acquired.
As their beverage trounces similar products in the cannabis beverage space in terms of absorption speed, I’d say they’re doing a good job (see the image below).
The formulation of Sproutly’s beverage portfolio was also made possible through the licensing and use of a water soluble mineral platform, known as MiST, in conjunction with the company’s own proprietary technology.
MiST, which stands for minerals in solution technology, and allows for the formulation of water soluble minerals and phytochemicals which deliver health-boosting antioxidants and vitamins, a must-have when targeting the health conscious consumer.
The importance of water solubility
Cannabinoids aren’t particularly difficult to get into the bloodstream. Although directly eating cannabis is a waste of time, turning trimmings into a fat-soluble butter for baking brownies is a relatively simple procedure for any high school student with a non-stick pan.
The difficulty faced by many companies is developing a vehicle for cannabinoids like CBD which is both easily absorbed and consistent in its effects.
On its face, using the aforementioned ‘brownie-butter’ technique for cannabis-infused beverage is a terrible idea. Butter carries connotations of richness and flavour, but finding a wide consumer base which could stomach a beverage with butter as its primary ingredient is a tall tale.
The second issue with this method is more technical. As a food product, the body must first digest the butter’s fats before it can absorb the cannabinoids it delivers.
Not only does this slow down the absorption process, it also leads to inconsistent and delayed effects–if it reaches the bloodstream at all.
Since Sproutly’s Infuz2O technology is water soluble, there is no digestion necessary. This makes it an enormous improvement over emulsified oil extracts of the kind used by many of Sproutly’s competitors.
This means the company’s functional beverage line possess the quick onset and offset one experiences when smoking cannabis.
Edibles and concentrates made with THC are not currently legal in Canada, but cannabis companies are anticipating legalization in 2019 by building brand recognition with CBD-infused ‘functional beverages’ today.
In August, Hydropothecary (HEXO.T) announced its JV deal with Molson Coors Canada (TPX.B.T) for the development of a non-alcoholic, cannabis-infused beverage.
Molson Coors Canada has since announced that it has secured a stake in a two-million square foot production facility in Belleville, Ontario.
Production facilities are all well and good–although the company has now put its neck on the line promising THC-infused beverages by 2019–but there is no mention of the technology they’re going to use.
Sproutly doesn’t having the corporate backing of an industry giant like Molson Coors, it doesn’t have the prettiest stock chart and it doesn’t command attention the same with its press releases.
What the company does have is the product that everyone else is talking about in those press releases. Their work speaks for itself. Other companies are trying to get aboard the CBD/functional beverage train while Sproutly is already comfortably seated in first-class.
The company is valued at $92.4 million and its share price closed at $0.57 today whereas Hydropothecary closed at $6.74.
Granted, Hydropothecary produces more than beverages, but if you’re a forward thinking individual–and I know you are, dear reader–you’re looking beyond doobies and dabs and into supermarket shelves.
Sproutly’s work speaks for itself. We’re just making sure you heard them right.
Full disclosure: Sproutly is an Equity Guru marketing client.