*If you missed our report from two weeks ago on The Alkaline Water Company, you may want to click here before reading this weekend’s letter.
Cannabis-related stocks created THE bull market of the last decade for small caps. Although valuations for many producers of pot have now come into question from the media and finance community (due to their massive increases of late), the fact remains the opportunities in the space have been plentiful.
The Canadian Marijuana Index is up roughly 75% from its mid-August low. Many of North America’s largest cannabis-related issuers traded to, or close to, new all-time highs this past week. While many sectors, including mining, oil and gas and even blockchain, are fractions of their former selves, cannabis, and many market segments related to it, are arguably as hot as ever…
Canadian Marijuana Index One Month Chart
source: MarijuanaIndex.com
As speculators, we like to track where the money is (i.e. liquidity, financings etc.); and, where it’s going. The avalanche of cash chasing medical and recreational cannabis (and related opportunities) on both sides of the border will not stop any time soon as laws surrounding cannabis continue to be liberalized…
Dominated by retail investors for the last four years or so, many institutions are now positioning (have been for several months) for a piece of the growing pie. One glance at Canada’s two junior exchanges (TSX Venture and CSE) clearly shows liquidity is increasing dramatically from earlier this year, in large part due to cannabis-related opportunities.
Cannabis Capital Flows into CSE at Record Rate
The CSE, known as the Canadian Securities Exchange, issued a press release in July titled, CSE Sets New Records in First Half of 2018, Including Over $1.4 Billion in Issuer Financings.
Consider this:
“The value of trade in CSE listed securities was $10.1 billion, up 535%, and higher than the full-year 2017 total of $7.8 billion.”
The CSE explains the increase is largely due to one sector:
“Twenty-five cannabis issuers debuted for trading in the first half, with capital raised by CSE listed companies in the sector totaling $999.3 million. Other strong sectors included blockchain-related at $123.4 million, and mining exploration/development at $122 million.”
The CSE is one small (but growing) exchange in North America. What’s more, the above stats are before many large cap cannabis-related stocks went crazy over the past few weeks. For better or worse, individual companies in the space on the TSX and NASDAQ have added billions to their market caps in a matter of weeks – only days in some cases.
Many cannabis-related issuers are experiencing record high volumes and valuations of late. With recreational legalization set for October in Canada, and speculation more states will eventually legalize, the American financial market has certainly awoken to the opportunity.
Things Changed on August 15th
What led to the incredible turnaround over the past month for cannabis-related public companies?
On August 15th, the Canadian Marijuana Index began one of its more impressive breakouts. From roughly 481 to over 886 in little over a month. Not coincidentally, on August 15th, Corona beer maker Constellation announced it would be investing $4 billion into Canopy Growth – one of Canada’s largest marijuana stocks. The company’s market cap sits around CAD$14.3 billion as of Friday.
After that announcement, more investors began to realize the cannabis space could have many offshoots and impacts – one being infused beverages, ranging from water to beer…
The scope of cannabis’ true impact is hard, perhaps even impossible, to gauge right now. Will it or won’t it be legalized in some regions and for what purposes, remains unclear across many key markets. That said, lawmakers all over the world are pushing to usher in new laws which support the economic benefit and tax revenue the cannabis industry could deliver.
The game changed on August 15th. From this day to present, positive sentiment has flowed back into the cannabis space. Below are two subtitles of a CNBC article highlighting Constellation’s increased interest:
Canopy Growth CEO Bruce Linton says he optimistic about cannabis-infused beverages and sleep aids.
Cannabis & CBD-Infused Drinks Garnering Market Attention
Cannabis or CBD-infused drinks could usher in a new wave of interest and possibly M&A activity in the cannabis-related space. It’s a new segment of the market, so first mover status (meaning a company that establishes significant sales first) could be a lucrative prize…
Beer, water and beverage companies of all kinds are now taking a serious look at the CBD and/or cannabis-infused market. The latest rumour regarding a major came on September 17th when BNN Bloomberg reported Coca-Cola (KO.N) is “…monitoring the nascent industry and is interested in CBD — the non-psychoactive ingredient in marijuana — for beverages as soda consumption slows. The Atlanta-based soft drinks maker is in talks with Canadian marijuana producer Aurora Cannabis Inc. to develop the drinks, according to a report from BNN Bloomberg Television.”
Aurora’s stock increased roughly 18% on the rumour as investors speculated a deal might be forthcoming. More than half a billion dollars worth of shares were purchased this past Monday alone. The sudden rise in stock value, based on rumours essentially, made regulators halt the stock pending comments by Aurora. Aurora noted they do conduct exploratory talks with industry participants from time to time, but there is no agreement or arrangement to announce a deal.
The volume uptick continued nonetheless. And on Wednesday more than CAD$1.3 billion dollars exchanged hands as the trading frenzy intensified. More than 400 million shares of Aurora exchanged hands this past week, and the stock closed at CAD$11.84 on Friday, up from CAD$8.54 the prior Friday.
What are cannabis-infused beverages? More importantly, what is cannabidiol or CBD?
Cannabidiol (CBD) is derived from marijuana and hemp. According to The Government of Canada,
“Cannabidiol (CBD) is another cannabinoid. Unlike THC, CBD does not produce a high or intoxication. There is some evidence that CBD may block or lower some of the effects of THC on the mind. This may occur when the amount of CBD in the cannabis is the same or higher than the amount of THC. CBD is also being studied for its possible therapeutic uses.”
CBD occurs naturally in marijuana and hemp plants – both of which are Cannabis sativa plant species. CBD is being looked at by beverage industry players as a potential health and wellness ingredient to include in their offerings…
This is a key point as we believe it could help enable beverage companies to rollout CBD-infused beverages quicker than, say, cannabis-infused beverages (with higher levels of THC).
A Healthline.com article outlines 6 potential benefits of CBD oil:
1. Anxiety relief
2. Anti-seizure
3. Neuroprotective
4. Pain relief
5. Anti-acne
6. Cancer treatment
The article went on to cite that,
“One study found that a 600mg dose of CBD helped people with social anxiety give a speech. Other early studies done with animals have shown that CBD may help relieve anxiety by:
reducing stress
decreasing physiological effects of anxiety, such as an increased heart rate
improving symptoms of post-traumatic stress disorder (PTSD)
inducing sleep in cases of insomnia.”
According to Therajoy Pharma, support for CBD in professional sports is growing:
“CBD for athletes has become a popular topic in locker rooms and gyms as a safe alternative to pain medications, not only because it is non-psychoactive and not addictive, but also due to CBD’s effectiveness in supporting health and wellness among athletes.”
Furthermore,
“…CBD has been demonstrated to have analgesic and anti-inflammatory properties that are now effectively being applied to sports medicine…”
Humans aren’t the only species benefiting from CBD – some veterinarians use it to treat various disorders in our pets. In a February 2018 article from Marijuana Business Magazine titled, Unleashing the Pet CBD Market, another potential opportunity is explained,
“There’s another reason why more and more cannabis companies are aiming for four-legged users. Pet owners in the United States spent more than $30 billion in 2016 on pet supplies, treatments, and veterinary care, according to the American Pet Products Association…”
Total U.S. cannabidiol (CBD) consumer sales from 2014 to 2022 (in million U.S. dollars):
Of course, we aren’t medical professionals, so we can only cite the potential benefits of CBD others have spoken about. What’s noteworthy, is that consumer sales of CBD are estimated to total around US$1.15 billion by 2020. On the beverage side, in its Health-Sponsored section The Financial Post released an article early in the year which states,
“The cannabis infused-beverage industry is set to explode into the mainstream, as shown with a mature edibles market in legalized United States. There is a huge potential for infused beers, wines and other beverages as well as health and wellness based cannabinoid infused beverages, like CBD iced teas, juices and shakes…”
Inc.’s Will Yakowicz reported “In 2018, soda sales have hit a 30-year low as consumers flee for healthier drinks, according to Bloomberg. Meanwhile, cannabis beverage sales, which hit $35.6 million in 2017 across California, Colorado, Oregon, and Washington, are on the rise.”
A Key CBD distinction | What’s the Source: Hemp or Marijuana?
iSum reported, “Many people are familiar with the idea that marijuana is used for getting high while hemp is used primarily for its seeds and application in the textile industry.”
CBD is found in both hemp and marijuana plants. This is important to understand when discussing the legality of sales because hemp and marijuana are regulated very differently from region to region.
Hemp and marijuana, although chemically and structurally different, are from the same species of plant (Cannabis sativa). A key difference, however, is the amount of THC contained in them, which is why they are regulated so differently.
The National Conference of State Legislatures explains:
“State statutes, with the exception of West Virginia, define industrial hemp as a variety of cannabis with a THC concentration of not more than 0.3 percent. West Virginia defines hemp as cannabis with a THC concentration of less than 1 percent.
Many state definitions for industrial hemp specify that THC concentration is on a dry weight basis and can be measured from any part of the plant. Some states also require the plant to be possessed by a licensed grower for it to be considered under the definition of industrial hemp.”
Since hemp should only contain trace amounts of THC, it should not have psychoactive effects. This is a key reason why it is legal in more regions than marijuana for industrial production.
Learn more here from the Government of Canada’s website.
Learn more here from the National Conference of State Legislatures’ website.
iSum reported, “Marijuana, on the other hand, has no limit on THC content and has been reported to have as high as 30% THC in some species (such as King Tut or Ghost OG). This makes marijuana psychoactive and is therefore included in the US Controlled Substances Act as a Schedule 1 substance (making it illegal on a federal level).
The difference in classification between hemp and marijuana dramatically changes the legal status of the plants, along with the constituents found inside.”
The iSum article continued,
“Currently, marijuana is legal for recreational and medicinal use in 9 states. Industrial hemp is legal in all 50 states, however, there is additional legislation regulating its extracts (including CBD) in 33 states.”
It can certainly be argued there are less barriers to entry to sell hemp-derived CBD than marijuana-derived CBD in much of the US at this point in time.
CBD from Hemp vs. CBD from Marijuana
According to Medical Marijuana Inc., “Unlike marijuana, hemp is naturally higher in cannabidiol (CBD)…”
In that same article by Jeffrey Stamberger comparing and contrasting CBD derived from hemp and marijuana, it states,
“One of the misconceptions about CBD hemp oil products is that CBD from hemp oil is less potent than cannabis oil or CBD oil made from medical marijuana. While it is true that the percentage of CBD in hemp plants by dry weight is lower than the percentage of CBD in some specially bred marijuana plants, once the oil is extracted from the plant, this difference becomes negligible.”
A few months ago, in June 2018, the U.S. Senate voted to legalize hemp. Known as the Farm Bill, it passed by a vote of 86 – 11 and contains provisions to legalize the cultivation, processing, and sale of industrial hemp.
A Forbes article by Tom Angell noted,
“The move, championed by Senate Majority Leader Mitch McConnell (R-Kentucky), would also make hemp plants eligible for crop insurance.”
No surprise, Senator McConnell’s state of Kentucky is known as America’s hemp capital…
In an August 28th, 2018 article written by David Carpenter, also from Forbes, titled In Kentucky, Farmers Find Hemp May Be More Profitable Than Tobacco, the rise of hemp is explained:
“…industrial hemp is seeing a surge of growth among U.S. agriculture producers now planting the crop in record numbers, often replacing staples like soy, corn and tobacco…”
Carpenter argues, “freeing hemp from federal prohibition as early as this year,” may be in the cards.
“Because hemp is technically described by the feds as containing no more than 0.3 percent THC (the high-inducing facet of cannabis), hemp is considered less of a threat than marijuana and not seen as a substance for abuse.”
We believe the path of least resistance for beverage companies to go to market with CBD-infused beverages will be through hemp.
We Expect The CBD-Infused Beverage Market To Grow Rapidly
It doesn’t take a genius to figure out the potential upside for the CBD-infused beverage segment of the market. As legacy soda brands deal with declining sales, consumers are seeking out unique, healthy product offerings. CBD is relatively new and growing in the minds of many consumers as a health and wellness addition to beverages. It has the ‘cool factor,’ and potentially even the health benefits many consumers seek.
In a Medical News Today article titled, Everything you need to know about CBD oil, CBD’s potential benefits, as well as the risks and side effects are explored. An excerpt from the report states,
“…Authors of a review published in the British Journal of Clinical Pharmacology found evidence that CBD significantly helped to prevent the spread of cancer.
The researchers also noted that the compound tends to suppress the growth of cancer cells and promote their destruction…”
We encourage you to review the entire article here.
In May of this year, Nutritional Outlook wrote an article titled, Hemp CBD Market Grows Increasingly Competitive, Sales Growing. The article quotes Sarah Syed, director of marketing at CV Sciences (Las Vegas), a supplier of CBD ingredients and products. It reads,
“The future success of CBD products rests on the ingredient’s therapeutic promise. “Full plant hemp extracts that contain natural CBD sell themselves because they are a safe and effective alternative to standard modalities. Hemp is also the first viral ingredient capable of influencing both the mind and body,” Syed says. “Products that can help calm the mind and support overall well-being and balance, like hemp extracts, will continue to be in very high demand.”
Interest in hemp and CBD is global, she says. “Hemp and CBD are now a worldwide phenomenon. I expect that every large company in the natural products industry will attempt to launch a hemp CBD in the coming years,” Syed says, adding that “hemp supplements are destined to share the market with pharmaceutical companies and medicinally prescribed CBD.”
Read the full article here.
The Alkaline Water Company Launches A88 Infused Beverage Division, Inc.
One of the fastest growing alkaline water companies in America, our client and featured company, The Alkaline Water Company (WTER: OTCQB) (WTER: TSXV), just launched its very own infused beverage division… notably, one of its new products coming soon to market will be a hemp-derived CBD infused Alkaline88® water. Click here for the full press release.
On the back of this news, released pre-market Wednesday, The Alkaline Water Company’s stock price made a significant move to the upside, peaking as high as CAD$5.10 and US$4.00 this past week. It closed trading on Friday at CAD$4.70 and US$3.72 respectively.
When we introduced the company to our subscribers two weeks ago to the day, it had last traded for CAD$2.54 and US$1.83… If you missed our report on the company, click here to read it.
Click above to watch our exclusive video on The Alkaline Water Company.
We like this strategic move by the junior beverage company for three reasons…
First, the fact that the company is at the expansion stage; and innovation, via product line expansion, is key for any product company in pursuit of growth. Second, the infused beverage category is, as you all know, a very hot sector, on trend and garnering interest from the financial community, namely the CBD-infused segment. Lastly, the company already has a national footprint (in the US) with its Alkaline88® water.
On September 12th, prior to announcing the launch of its infused beverage division, The Alkaline Water Company (“AWC”) stated July and August 2018 sales both exceeded $3 million – a revenue increase of over 100% as compared to July and August 2017…
Company CEO Richard A. Wright stated in that release, “Our second quarter is off to a record start, with sales up over 100% for the two months ended August 31, 2018 as compared to the two months ended August 31, 2017. We have now recorded two consecutive months with sales exceeding $3 million in both July and August 2018. Our cost of goods sold in each of July and August 2018 was $1.8 million in each month, as compared to the cost of goods sold in each of July and August 2017 of $0.7 million and $1.0 million, respectively. This record growth has been led by our newly added national retail accounts, made up of over 6,500 stores nationwide at Walmart, Shopko, and Kroger.”
Click here for full news release.
The Alkaline Water Company sells its Alkaline88® water in more than 40,000 retail locations; and it is in all 50 states. The company has stated it is targeting near $40 million in revenue for its fiscal year 2019…
The Alkaline Water Company Targets Product Line Expansion
“New Products Coming Soon to Market Will Include:
Hemp-derived CBD infused Alkaline88® water
Naturally Flavored Alkaline88® water
Natural Sparkling Alkaline88® water
Alkaline88® infused with Natural Vitamins and Minerals”
Richard A. Wright, President and CEO, made this statement in the release,
“We expect these new products to be all natural and plant derived. Each of the four initial areas were chosen based on our current customer demand, consumer demand, and market potential. Each new product line is already in various stages of development. Management feels the formation of A88 Infused will hasten their speed to market while maintaining our momentum with our lead product, Alkaline88®. On October 17th of this year, CBD will be legal throughout all of Canada and is already legal in the U.S. We feel it is imperative that our hemp-derived CBD infused Alkaline88® water, along with each of the other products planned, be available for purchase throughout Canada and the U.S. We hope to be announcing many milestones over the next few months as we expand our brand offerings. Each product line was chosen based on our belief that consumers will embrace an infused Alkaline88® healthful product line…”
The company elaborated,
“Our hemp-derived CBD infused Alkaline88® water, which will be bottled in the 500 ml size with dosage of 10 mg of hemp-derived CBD per bottle, fits squarely within the growing CBD market trend. Throughout 2018 we have been investigating and analyzing beneficial partnerships in the Hemp based CBD market and have made great progress. The Hemp Business Journal projects that the worldwide CBD market will grow from $202 million last year to $2.1 billion by 2020, and Greenwave Advisors Matt Karnes believes that the worldwide CBD market will reach nearly $3 billion by 2021. Consumer interest in CBD has risen to all-time highs as researchers explore the potential medical benefit of cannabidiol.”
Click here to read the entire press release and learn more about The Alkaline Water Company’s strategy.
On Thursday, one day after announcing its new infused beverage division, the company reported that its wholly-owned subsidiary, A88 Infused Beverage Division, has entered into a Co-Packing Agreement with American Nutritional Products (“ANP”), headquartered in Carson City, Nevada.
The Alkaline Water Company reported on September 20th, that,
“Under the terms of the agreement with ANP, A88 Infused will have a “one stop shop” for the development of each of its recently announced product extensions. ANP will provide A88 Infused manufacturing, formulations, R&D, biomass and extraction within ANP’s state-of-the-art facility…”
Mr. Richard A. Wright stated,
“ANP’s state-of-the-art 55,000 square foot manufacturing facility located in Carson City, Nevada has been certified by the International Center for Cannabis Therapy (CCTI), Good Manufacturing Practices (GMP), the National Sanitation Foundation (NSF), and is registered with the FDA, allowing them to produce everything from A88 Infused’s new hemp-derived CBD Alkaline88® water to its sparkling Alkaline88® water…”
Click here to read the full release.
The Alkaline Water Company Chairman, Aaron Keay, Has Ties to the Cannabis Sector
AWC’s Chairman, Mr. Aaron Keay, is the former CEO of VIVO Cannabis Inc., and he still serves as a director. VIVO (formerly ABcann) is a leading, vertically-integrated, cannabis business with a collection of premium brands targeting unique consumer segments and needs. It currently has a market cap hovering around *CAD$467 million.
*Market cap according to Bloomberg.
Watch an interview from BNN Bloomberg with Mr. Keay discussing ABcann in May below:
Hemp-derived CBD – A Market Segment of Interest
AWC’s leading product, Alkaline88® water, is now available in 39 of The Super 50 U.S. Grocers, as published by Progressive Grocer.
We believe established beverage companies with infrastructure and proven sales channels will be best positioned to capitalize on this new market segment. The Alkaline Water Company is selling its alkaline water in over 40,000 stores nationwide, and is available in all 50 states.
Richard Wright, President of The Alkaline Water Company, stated this past week,
“…With more and more major companies including Coke and Constellation Brand entering the CBD market in a significant way, our speed to market with Alkaline88® as the base water will give us a chance to be one of the first to market in the US and Canadian markets. We think that A88 Infused will be able to bring several sophisticated and functional new products to market by December, 2018.”
Recognize that we are biased when it comes to The Alkaline Water Company. AWC is a client and we participated in the company’s private placement completed in May 2018, making us shareholders and cheerleaders. Conduct your own thorough and independent due diligence to properly understand the risks associated with investing in a company of this nature. The company is most certainly at an expansion stage, which often results in further dilution to shareholders. Pick your spots…
*Additional details of AWC’s business, finances, appointments and agreements can be found as part of the Company’s continuous public disclosure filed with the Securities and Exchange Commission (“SEC”), available at www.sec.gov, and on the SEDAR website, available at www.sedar.com.
Billions of dollars are chasing market share in the beverage industry, which is looking for alternative healthy product offerings, including in the bottled water segment. Drinking hemp-derived CBD infused beverages may be an extension of a more health-conscious consumer. And there is lots of speculation around who will do what in the CBD segment. What’s for certain, is that many beverage companies across North America are looking into this market segment, and likely formulating a strategy to capitalize.
Kent Landers, a spokesman from Coca-Cola, wrote in an emailed statement to BNN Bloomberg that “along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world. The space is evolving quickly. No decisions have been made at this time.”
From a strategic perspective, we applaud the move being made by The Alkaline Water Company (WTER:TSXV) (WTER:OTCQB), and look forward to tracking its development as we head into the last quarter of 2018.
All the best with your investments,
PINNACLEDIGEST.COM
The Alkaline Water Company Stock information
Exchanges: TSX Venture and OTCQB
Symbol on Both Exchanges: WTER
Stock Price: CAD$4.70 – US$3.72
10-Day Avg. Volume on OTCQB: 380,000 (approximate)
Corporate Presentation
Click to view The Alkaline Water Company’s Corporate Presentation – September, 2018
Online Resources
Visit The Alkaline Water Company Online
Disclosure, Risks Involved and Information on Forward Looking Statements:
Please read the following carefully before proceeding.
THIS IS NOT INVESTMENT ADVICE. All statements in this report are to be checked and verified by the reader.
This report may contain technical or other inaccuracies, omissions, or typographical errors, for which Maximus Strategic Consulting Inc., owner of PinnacleDigest.com (“Pinnacle Digest” or “we”), assumes no responsibility. We cannot warrant the information contained in this report to be exhaustive, complete or sufficient. The Alkaline Water Company Inc. is a client and sponsor of PinnacleDigest.com. PinnacleDigest.com authored and published this report. Because we are paid by The Alkaline Water Company Inc., and therefore we are not independent reporters, our coverage of The Alkaline Water Company Inc. features many of its positive aspects, and not the potential risks to its business or to investing in its stock.
Important: Our disclosure for this report on The Alkaline Water Company Inc. applies to the date this report was released to our subscribers (September 22, 2018) and posted on our website. This disclaimer will never be updated, even after we sell our shares of The Alkaline Water Company Inc.
In all cases, interested parties should conduct their own investigation and analysis of The Alkaline Water Company Inc. (“The Alkaline Water Company” or “AWC” or “the Company”), its assets and the information provided in this report.
You should refer to The Alkaline Water Company’s public disclosure documents found on the SEDAR website (www.sedar.com) and the U.S. Securities and Exchange Commission’s website (www.sec.gov) before considering investing in the Company. The public disclosure documents will help investors fully understand The Alkaline Water Company’s business and the risks associated with the Company.
The statements and opinions within this report expressed by Pinnacle Digest are solely those of Pinnacle Digest and not the opinions of The Alkaline Water Company. The statements and opinions within this report expressed by representatives of The Alkaline Water Company are solely those of The Alkaline Water Company and not the opinions of Pinnacle Digest.
While the information contained in this report has been prepared in good faith, neither Maximus Strategic Consulting Inc. nor Pinnacle Digest, give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this report (all such information being referred to as “Information”) and liability therefore is expressly disclaimed to the fullest extent permitted by law. Accordingly, neither Maximus Strategic Consulting Inc., nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained in this report or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this report.
Cautionary Note Regarding Forward-Looking Information: Much of this report is comprised of statements of projection. This report contains “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). All statements, other than statements of historical fact, that address activities, events or developments that The Alkaline Water Company or Pinnacle Digest believes, expects or anticipates will or may occur in the future are forward looking statements. Such statements include but are not limited to, statements with respect to future growth predictions for the bottle water industry; statements with respect to future growth predictions for the CBD and CBD infused beverage industry; statements regarding the expected declining growth for carbonated soft drinks; statements relating to no other company being as uniquely positioned in the bottled water market as The Alkaline Water Company; the statement that the Company can now produce enough Alkaline88 to support up to $8 million a month in sales revenue; any statement that the Company’s current production capacity well exceeds its mid-term volume projections and should demand exceed projections, the Company is ready to meet that demand with little or no shortfall in product supply; the Company expecting growth in sales to increase in the months ahead; the anticipation that more retailers will carry the Company’s product on their shelves; the Company expects to see its fiscal 2019 sales increase to nearly US$40 million; the Company expects to reach positive cash flow in fiscal year 2019; that the Company will be able to scale its operations efficiently if sales continue to grow; statements that if the Company reaches near US$40 million in revenue it can expect interest from outside companies, potentially interest from an acquisition perspective; that the Company has the potential to become a buyout candidate; that Alklaine88® is well positioned for a brand-driven acquisition; that the Company will dominate the emerging beverage market with the launch of their new products, including hemp-derived cannabidiol (CBD) 10 mg infused Alkaline88® waters; that consumers will embrace an infused Alkaline88® healthful product line; that the Company can develop new products to be leaders in the emerging trend of enhanced water products; that the Company will be one of the first to market in the US and Canadian markets with its CBD infused alkaline water; that A88 Infused will be able to bring several sophisticated and functional new products to market by December, 2018; that the expertise of the Company will accelerate A88 Infused’s market penetration significantly; that the new products lines will result in a major benefit to the Company’s growth and overall shareholder value, and other statements, estimates or expectations. Often, but not always, these forward-looking statements can be identified by the use of forward-looking terminology such as “expects”, “expected”, “budgeted”, “targets”, “forecasts”, “intends”, “anticipates”, “scheduled”, “estimates”, “aims”, “will”, “believes”, “projects” “could” “would” and similar expressions (including negative variations) which by their nature refer to future events.
By their very nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond The Alkaline Water Company’s control. These statements should not be read as guarantees of future performance or results. Forward looking statements in this report are based on the opinions and estimates of the Company’s management or Pinnacle Digest at the date the statements are made, as well as a number of assumptions made by, and information currently available to, the Company or Pinnacle Digest concerning, among other things, that the demand for the Company’s products will continue to significantly grow; that there will be continued expansion of direct store distributor sales; that there will be increased production capacity through implementation of new technology; that there will be an increase in number of products available for sale to retailers and consumers; that there will be an expansion in geographical areas by national retailers carrying the Company’s products; that there will be an expansion into new national and regional grocery retailers; that there will be an entry by the Company into international markets; that third parties will honor their contractual obligations; and that the Company will be able to obtain additional capital to meet the Company’s growing demand and satisfy the capital expenditure requirements needed to increase production and support sales activity.
Factors that could cause actual results to vary materially from results anticipated by such forward looking statements include, but are not limited to, governmental regulations being implemented regarding the production and sale of alkaline water and/or hemp-derived CBD infused water; additional competitors selling alkaline water bulk containers reducing the Company’s sales; a competitor infringing on the Company’s trademark; the fact that the Company does not own or operate any of its production facilities and that co-packers may not renew current agreements and/or not satisfy increased production quotas; the fact that the Company has a limited number of suppliers of its unique bulk bottles; the potential for supply chain interruption due to factors beyond the Company’s control; the fact that there may be a recall of products due to unintended contamination; the inherent uncertainties associated with operating as an early stage company; changes in customer demand; the extent to which the Company is successful in gaining new long-term relationships with new retailers and retaining existing relationships with retailers; the Company’s ability to raise the additional funding that it will need to continue to pursue its business, planned capital expansion and sales activity; competition in the industry in which the Company operates; volatility in the Company’s stock price and market conditions. It’s also important to understand that The Alkaline Water Company has not reached profitability. And even if its revenue increases, there is no certainty that will translate into the Company being profitable.
Furthermore, the CBD infused segment of the beverage market is a new market segment and currently relatively small in size (by sales volume). Any forecasts, predictions or estimations relating to how big this segment may get in the months and years to come is speculative and there is no certainty sales will reach, or even come close to, projected volumes. As with many emerging market segments, entering it should be considered risky as numerous changes can occur quickly within the segment (regulatory and otherwise) and there is no certainty the Company will react appropriately.
These forward-looking statements are made as of the date of this report being publicly released, and neither Pinnacle Digest nor the Company assume any obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by applicable law, including the securities laws of the United States and Canada. Although Pinnacle Digest and The Alkaline Water Company believe that the assumptions inherent in their respective forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to their inherent uncertainty.
Readers of this report should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in the reports and other documents The Alkaline Water Company files with the SEC, available at www.sec.gov, and on the SEDAR website, available at www.sedar.com.
We Are Not Financial Advisors: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned anywhere in this report (particularly in respect to The Alkaline Water Company Inc.). PinnacleDigest.com is an online financial newsletter owned by Maximus Strategic Consulting Inc. We are focused on researching and marketing for small public companies. This report is intended for informational and entertainment purposes only. The author of this report and its publishers bear no liability for losses and/or damages arising from the use of this report.
Be advised, Maximus Strategic Consulting Inc., PinnacleDigest.com and its employees are not a registered broker-dealer or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer.
Never, ever, make an investment based solely on what you read in an online newsletter, including Pinnacle Digest’s online newsletter, or Internet bulletin board, especially if the investment involves a small, thinly-traded company that isn’t well known.
PinnacleDigest.com’s past performance is not indicative of future results and should not be used as a reason to purchase any security mentioned in this report or on our website.
The past performance of The Alkaline Water Company’s management, directors, advisors and leadership personnel is not indicative of future results for the Company and should not be used as a reason to purchase any security mentioned in this report.
We Are Biased: The Alkaline Water Company Inc. is a client of ours (details in this disclaimer on our compensation). We also own shares and warrants of The Alkaline Water Company Inc. For those reasons, we want to remind you that we are biased when it comes to the Company.
Because The Alkaline Water Company has paid us CAD$75,000 plus gst for our online advertising and marketing services, and we (Maximus Strategic Consulting Inc. and its president Aaron Hoddinott) own shares and warrants of the Company, you must recognize the inherent conflict of interest involved that may influence our perspective on The Alkaline Water Company; this is one reason why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor and a registered broker-dealer before considering investing in the Company.
Maximus Strategic Consulting Inc., owner of PinnacleDigest.com, its officers, directors, employees, and consultants shall not be liable for any damages, losses, or costs of any kind or type arising out of or in any way connected with the use of its reports, products or services, including this report. Maximus Strategic Consulting Inc., owner of PinnacleDigest.com, its employees, consultants and affiliates are not responsible for any information provided by any of the companies mentioned in our reports or third party writers. You should independently investigate and fully understand all risks before investing.
We want to remind you again that PinnacleDigest.com is often paid editorial fees for its writing and the dissemination of material. The clients (including The Alkaline Water Company) represented by PinnacleDigest.com are typically early-stage companies that pose a much higher risk to investors than established companies. When investing in speculative stocks such as The Alkaline Water Company it is possible to lose your entire investment over time or even quickly. The Alkaline Water Company is not an appropriate investment for most investors.
Set forth below is our disclosure of compensation received from The Alkaline Water Company Inc. and details of our stock and warrant ownership in the company as of September 22, 2018:
Maximus Strategic Consulting Inc., owner of PinnacleDigest.com, has been paid CAD$75,000 plus GST to provide online advertisement coverage for The Alkaline Water Company for a pre-paid six month online marketing agreement. The Alkaline Water Company has paid for this coverage. The coverage includes, but is not limited to, the creation and distribution of reports authored by PinnacleDigest.com about The Alkaline Water Company (reports such as this one), as well as display advertisements and news distribution about the Company on our website and in our newsletter. Both Maximus Strategic Consulting Inc. and its President Aaron Hoddinott own shares and warrants of The Alkaline Water Company which were purchased by subscribing to The Alkaline Water Company’s private placement that closed on May 31, 2018. In that private placement both Maximus Strategic Consulting Inc. and Aaron Hoddinott purchased Units of the Company at a price of US$0.75 per Unit. Each Unit consisted of one share of common stock of the Company (each, a “Share”) and one-half of one share purchase warrant (each whole warrant, a “Warrant”). One Warrant entitles the holder thereof to purchase one additional Share of the Company (each, a “Warrant Share”) at a price of US$0.90 per Warrant Share for a period of two years from closing of the private placement. Both Maximus Strategic Consulting Inc. and Aaron Hoddinott intend to sell every share they own of The Alkaline Water Company for their own profit. All shares Maximus Strategic Consulting Inc. and Aaron Hoddinott currently own or purchase in the future of The Alkaline Water Company will be sold without notice to Pinnacle Digest’s subscribers or the general public. Please recognize that Maximus Strategic Consulting Inc. and its President Aaron Hoddinott benefit from price and trading volume increases in The Alkaline Water Company. Please recognize that we are extremely biased when it comes to The Alkaline Water Company.
Maximus Strategic Consulting Inc. and PinnacleDigest.com (including its employees and consultants) are not chartered business valuators; the methods used by business valuators often cannot justify any trading price for most junior stock exchange listed companies. The Alkaline Water Company is a junior stock exchange listed company.
Any decision to purchase or sell as a result of the opinions expressed in this report OR ON PinnacleDigest.com will be the full responsibility of the person authorizing such transaction, and should only be made after such person has consulted a registered financial advisor and conducted thorough due diligence. Information in this report has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Our views and opinions regarding the companies we feature on PinnacleDigest.com and in this report are our own views and are based on information that we have received, which we assumed to be reliable. We do not guarantee that any of the companies mentioned in this report (specifically The Alkaline Water Company) or on PinnacleDigest.com will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect.
To get an up to date account on any changes to our disclosure for The Alkaline Water Company (which will change over time) view our full disclosure at the url listed here: https://www.pinnacledigest.com/disclosure-compensation/
Maximus Strategic Consulting Inc., owner of PinnacleDigest.com, does not undertake any obligation to publicly update or revise any statements made in this report.
Learn how to protect yourself and become a more informed investor at www.investright.org
No warranty, either express, or implied, is given for the information and opinions published in this report. All information is provided “as is” WITHOUT WARRANTY OR CONDITION OF ANY KIND, EXPRESS OR IMPLIED, AND ALL SUCH WARRANTIES OR CONDITIONS ARE HEREBY DISCLAIMED. MAXIMUS STRATEGIC CONSULTING INC. AND ITS SERVICE PROVIDERS ASSUME NO RESPONSIBILITY TO YOU OR TO ANY THIRD PARTY FOR ANY ERRORS OR OMISSIONS.
Trading in the securities of The Alkaline Water Company should be considered highly speculative.
We are Not Medical Professionals: This report was produced without the consultation or advice of a medical professional. The described benefits and opinions of alkaline water, or specifically Alkaline88 water, must not be viewed as medical advice. The described benefits and opinions of Hemp-derived CBD infused water must not be viewed as medical advice. We are not making any health claims relating to CBD or alkaline water. You should consult with a licensed medical doctor and nutritionist to learn about the potential benefits of alkaline water, Himalayan rock salt and CBD. Pinnacle Digest and the Company have not conducted any clinical studies regarding the health benefits of alkaline water or hemp-derived CBD, and accordingly make no claims as to the benefits of alkaline water or hemp-derived CBD.
