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Lack of access to conventional financial sources for cannabis companies is the main issue facing cannabis entrepreneurs. Banks won’t make loans to cannabis business owners because of federal law.
As a result, businesses like Verano Holdings Corp VRNOF and Cresco Labs Inc CRLBF are now free to seize as much market share as they can while positioning themselves as attractive acquisition targets for the highly anticipated federal regulation of cannabis.
Big tobacco companies like Philip Morris International Inc. PM have had exposure to cannabis for nearly a decade, but have not taken concrete steps forward as the risk tolerance for the budding industry is still low.
In order to prepare for widespread adult adoption, companies are making easier-to-consume products like drinks, and gummies — something that could interest drink brands like Coca-Cola Co KO, and Constellation Brands, Inc. STZ.
Vivien Azer, Managing Director & Senior Research Analyst for Beverages and Tobacco at Cowen, thinks that established brands will take part in the cannabis industry once regulations are put 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 turn,” Azer said at the 2022 Benzinga Cannabis Capital Conference in Chicago on Tuesday. “If you would’ve asked me five years ago if these companies would get involved with cannabis, I would’ve said no.”
Molson Coors Brewing TAP, the maker of Coors, Blue Moon, the Miller Brand and others announced a joint venture with Quebec-based HEXO, now known as Truss, to produce cannabis-infused beverages to be put on dispensary shelves.
“We do expect continued growth in the category,” the analyst said.
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Image and article originally from www.benzinga.com. Read the original article here.