Zenabis Global Inc (TSX:ZENA)(OTC: ZBISF), a licensed cultivator of medical and recreational cannabis, announced Tuesday an agreement aimed at vertical integration.
Zenabis has entered into an agreement with beverage technology company Beverage Partner that will supply it with water soluble, odorless, flavorless and colorless cannabis-infused inputs.
Zenabis will use the technology to manufacture cannabis-infused beverages, both THC and CBD-infused beverages, and other cannabis-infused products. The beverage inputs supplied by Beverage Partner will be produced from cannabis supplied by Zenabis.
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Beverage Partner may also produce finished cannabis-infused beverages for Zenais by installing a production line for both beverage Inputs and finished cannabis-infused beverages, at its own cost, at Zenabis Stellarto.
Zenabis said it will produce a line of CBD-infused kombucha products together with Hillsboro Corp.
Why It's Important
The move is to capitalize on the impending legalization of cannabis-infused beverages in Canada later this year. The Canadian market for these beverages is estimated at $529 million, the company said.
"[S]o the ability to infuse cannabis in beverages; without affecting their taste, smell or appearance; strengthens Zenabis' position relative to the many other companies planning to commercialize similar products," said Andrew Grieve, CEO of Zenabis.
The company recently reported its second-quarter net revenues more than doubled, and remains on track to achieve an annual cannabis cultivation capacity of 143,200 kg under its current capital program.
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