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Cannabis 2.0 represents a major opportunity in Canada and refers to the sale of cannabis infused products (edibles and drinkables), cannabis concentrates, salves, tinctures, and more.

Demand for these types of cannabis products has been steadily increasing and this is a trend that we expect to become more significant on a going forward basis. A few years ago, we noticed a substantial increase in the number of Canadian companies that were focused on producing cannabis. When it comes to cannabis 2.0, there has been a much smaller increase in the number of companies focused on the vertical and we find this to be significant.

In 2019, we noticed a significant decrease in the amount of capital that was raised for cannabis businesses. So far this year, we are seeing a similar trend when it comes to raising capital and expect this to result in fewer companies that are focused on the cannabis 2.0 opportunity.

When it comes to the cannabis 2.0 opportunity in Canada, we are most excited about the cannabis infused product market. We believe that the Canadian cannabis infused product market is barely in the first inning of a multi-decade growth cycle and is a vertical that has been generating significant traction.

Last month, we issued an update on HYTN which is highly focused on the Canadian cannabis 2.0 market and this is an opportunity that we are excited about. The company represents a differentiated opportunity and we are favorable on the structure of the business from both an operational and a financial standpoint.

HYTN is a business that has substantial catalysts for growth and is an opportunity that we expect to be a major beneficiary of the cannabis 2.0 market. The company has secured strategic agreements with several leading Canadian distributors and will start shipping its product in the coming months.

A Leading Cannabis 2.0 Opportunity in the Making

Through a series of organic and inorganic growth projects, HYTN is expected to be a leader in the Canadian cannabis 2.0 market and we will monitor how the management team is able to drive the story forward. Going forward, the name of the game for HYTN is execution and we  have a high conviction level with regard to the management team’s ability to execute. The products that will be offered by the company included cannabidiol (CBD) and tetrahydrocannabinol (THC) infused beverages, edibles, and topicals.

One of the ways that HYTN has been able to differentiate its product line is through the development of proprietary emulsion technology that allows for the consumer to rapidly feel the effects of the cannabinoids. We are of the opinion that this is an key aspect of the story and one the market needs to be aware of.

The proprietary emulsion technology is referred to as Elevation Technology and HYTN’s cannabis products are expected to have an onset time similar to that of alcohol. The amount of time that it takes to feel an edible or drinkable is a common consumer complaint and we are favorable on how that HYTN has approached this issue. Over the long-term, we expect Elevation Technology to play an important role and will monitor how the products are able to gain traction.

HYTN represents a multi-faceted growth opportunity with a three phase strategy to become a leading player in the Canadian cannabis 2.0 market. Phase 1 includes the production of cannabis infused beverages. Phase 2 is related to the launch of an edibles product line and represents a major growth opportunity for the business. Phase 3 is focused on the launch of a CBD product line that can be sold over the counter and at participating pharmacies.

Another reason we are excited about HYTN is related to the existing sales channels and the relationships that are in place. This has been a major focal point for the business and HYTN has secured strategic relationships with liquor distribution branches and leading cannabis retailers in Canada. Currently, HYTN can co-package product out of British Columbia (produces up to 10 million products per year and provides R&D and lab services) and Nova Scotia (produces up to 7 million products per year and can scale to 26 million).

Relationship with Zenabis is Expected to be a Major Value Driver

Earlier this year, HYTN formed a strategic partnership with Zenabis Global Inc. (TSX: ZENA) to produce a range of cannabis-infused beverages. This comes only a few months after the companies signed a definitive agreement to produce these products at Zenabis Stellarton and we are favorable on the growth prospects that are associated with the relationship.

We expect HYTN and Zenabis to find significant synergies between each other and are bullish on the amount of value that can be created between the businesses. The combination of HYTN’s beverage manufacturing expertise with Zenabis’ high-quality cannabis extracts allows for the companies to provide consumers with high-quality cannabis-infused beverages and we expect to see the products generate significant traction

The cannabis 2.0 market represents an attractive growth opportunity and we are favorable on the partnership’s ability to capitalize on it. The goal of the partnership is to launch cannabis-infused sparkling water beverages under the HYTN brand and this is an opportunity that we expect to be a substantial value driver for both businesses.

A Private Opportunity to be Aware of

During the last year, HYTN has been nothing short of an execution story and has been focused on driving the story forward. The company is led by a management team with a proven track record of success and the expertise that is needed to be successful in the Canadian cannabis market.

HYTN’s management team is comprised of executives that have significant experience in the consumer packaged goods (CPG) and beverage space. The team has been focused on developing unique product formulations and we are favorable on the verticals that the business is focused on.

HYTN represents a differentiated play on the Canadian cannabis 2.0 market and we are favorable on the products that fall under its umbrella. Going forward, we believe that HYTN is well positioned for growth and are favorable on the direction that the management team is bringing the business.

Later this year, HYTN expects to complete a go-public transaction and is a private opportunity that we are bullish on. If you are interested in learning more about the cannabis beverage company, please send an email to support@technical420.com to be added to our distribution list.