A Cannabis Beverage That Screams...Cannabis (The Die Line) | Heavy Hitters (Private): Cannabis beverages have captured the attention of investors and industry watchers alike for some time. The "sell" of cannabis drinks is simple: instead of smoking a joint, consumers would enjoy a glass of cannabis chardonnay, hard seltzer, etc. The market for cannabis drinks looks huge when looked at as an easy replacement for alcohol, but thus far the vision has not matched the reality of cannabis drinks continuing to make up a relatively small (we estimate generally ~10-15%) share of overall cannabis edibles sales.
There are many reasons for this (which deserve their own full post) - but one of the main reasons in our view is that most drinks (and edibles generally) sought to mask or eliminate any hint of cannabis from the product, and make the product more convenient to use quickly. Easy self serve packs, fruit flavors, etc. None of the products we saw treated cannabis as something to be authentic to, like the blue agave that went into making a quality tequilla, or to be savored, like a 12 year single barrel scotch.
Well creating a drink that honors the plant is exactly what our friends at Heavy Hitters' did with their new product HVY. A beautifully crafted product and package that stays true to its origin strain of Acapulco Gold. Drink it straight up, on the rocks or mixed into a cocktail. The taste, smell and flavor profile are like nothing we have come across in the space. It loudly and proudly screams cannabis and is a breath of originality in the crowded cannabis beverage sector, and certainly made fans out of us.
And its packaging made fans of the commentators over at The Die Line, a major advertising and packaging review website.
Ayr Wellness Joins the Sub 10% Debt Club (Company Press Release) | Ayr Wellness (CSE:AYR.A, OTCQX: AYRWF): Ayr Wellness was not about to be left behind as some of its larger competitors inked major debt deals at sub 10% interest rates last week when they announced a new $150mm debt financing at 9.8%, even if they had to massage the numbers just a bit to get under the 10% line.
Like a clubgoer who simply will not be denied getting into the VIP section, Ayr had to resort to some math not commonly seen in these press releases. To get under 10%, Ayr had to sell the debt at a premium of 7% while giving 12.5% interest, for an "all in" interest rate of 9.8%. But 9.8% is under 10%, so congrats to the Ayr team - just another data point for us on how much larger and more favorable debt terms have gotten while equity prices still languish.
A Republican Legalization Proposal (Marijuana Moment): Rep. Nancy Mac, a Republican from South Carolina, proposed a Republican alternative to Democratic cannabis legalization proposals last week. Notable for industry watchers was a much smaller excise tax and slightly different approach to regulating the industry that would involve a lessened role for the rigorous FDA process and instead shuft more authority to alcohol and tobaco tax regulators.
One way we think about this new bill is the Republican opening "bid" vs. the Sen. Schumer's Democratic opening bid for cannabis legalization. To us, cannabis legalization is more possible now than it was before - but it could still be a ways off. That said, predictions are difficult - especially about the future.
We’re Bengal. We’re an aligned group of people with the good fortune of having immersed ourselves in the emerging cannabis industry. We pride ourselves on intentionally selecting where we place our attention; we’re lucky that way. We aim to roll up our sleeves and be partners, whether as a trusted advisor, capital provider or friend. We feel like we’ve made every mistake and can hopefully help prevent others from the same. Our lessons learned keep us humble and we are balanced by an inner confidence borne from our track record and trusted relationships; we are most grateful for these vibrant connections. We simply like to help and get aligned with great people and great opportunities.
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This material is provided for information purposes and is not a recommendation or investment advice. The accuracy and/or completeness of any material included herein is not guaranteed. Entities associated with or managed by Bengal Capital or its principals may maintain positions in, or provide services to, the issuers mentioned herein.
