New Age Beverages, a small Colorado-based company, is no exception. When it announced on Wednesday that it would debut a portfolio of CBD-infused beverages at a trade show next month, its stock price proceeded to rise more than 600%.
Cannabidiol, or CBD, is a marijuana compound that has been credited with a range of health benefits.
On Thursday alone, NBEV rose 79% — and was up another 18% in early trading Wednesday.
The timing of the announcement couldn't have been better for New Age. The announcement came on the same day a Bloomberg report said Coca-Cola had been in discussions with Aurora Cannabis about developing CBD-powered drinks. Aurora, which has denied the claims, got a healthy boost in its stock price from the reports, and swirling rumours sent the entire sector higher.
Beverage makers are an obvious partner for dagga companies, especially as major players move into the space. Constellation Brands' $4 billion investment in Canopy Growth, helped to catalyse this months-long rally in marijuana stocks that's showing no signs of stopping.
The Life Science Alternative Harvests exchange-traded fund, MJ, has seen massive inflows as the sector's popularity trickles from institutional investors down to users of apps that allow them to easily trade shares. The ETF now has assets totalling more than $600 billion, up from less than $10 billion when it first pivoted to cannabis earlier this year.
"We believe we have developed unique consumer insights and accessed superior technology in CBD-infused beverages over the past year, and we are excited to share those insights with key retail partners," Zach Ross, New Age Beverage's marketing manager, said in a press release.
"We believe we are in a position to bring national leadership to this emerging growth segment, and intend to launch the most efficacious and safe CBD-infused products for consumers, with the most responsible marketing and education to a segment that has potential to be transformative to healthy functional beverages."
The company did not respond to a more specific question about the Coca-Cola rumours. In a statement earlier this week, a Coca-Cola spokesperson said, "the space is evolving quickly; no decisions have been made at this time."
Marijuana's popularity in the stock market this week has some observers comparing the trend to the crypto boom of early 2018. At that time, any company that so much as mentioned blockchain or cryptocurrency was almost guaranteed to see their stock rise. It also convinced a number of companies in a variety of sectors to pivot to the space, like Long Island Iced Tea.
Shares of New Age are up 207% this year.
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