The Alkaline Water Company Inc. (TSXV:WTER)(NASDAQ:WTER) recently joined forces with celebrities Mark Wahlberg and Sean ‘Diddy’ Combs to help boost its fast-growing Alkaline88 bottled water brand and its newly minted CBD-infused products. But now the company is doubling down on the CBD craze by introducing a whole new line of infused products: topicals.
Arizona-based Alkaline Water announced Thursday the launch of A88 Infused Products Inc., a wholly-owned subsidiary based in Nevada that’s developed a variety of CBD-infused topicals, including lotions, salves, balms, essential oils, and bath salts.
In August, the company teamed up with CBD producer Centuria Foods to develop and launch ingestible CBD-shots, tinctures, capsules, and powder packs made with the producer’s lab-tested, full-spectrum hemp. Centuria was the only legal CBD company in the U.S. prior to the passing of the 2018 Farm Bill and Alkaline Water will use its high quality, organic CBD in the new topical products as well.
“We now view the entire CBD market as a tremendous opportunity to further expand our brand and product portfolio in both the ingestibles and the natural beauty and personal care category within the much larger health and wellness space,” said Alkaline Water CEO, Richard Wright, in a statement.
The company said it will start taking orders for its CBD products Nov. 4-6 at a major CBD food and beverage conference held in Florida, then full-scale delivery of the topical products will begin at the start of 2020. The topical products include:
- CBD infused Soothing Salve – for irritated, sore muscles.
- CBD infused Lip Balm – to hydrate lips for all-day use.
- CBD infused Hydrating Body Lotion – made with shea butter and aloe vera to moisturize skin.
- CBD infused Hydrating Hand Lotion – nutrient-dense hand and foot cream that contains Shea butter, oils and extracts.
- CBD infused Essential Oil Roller – contains pure essential oils perfectly balanced with coconut oil.
- CBD infused Bath Salts – combines the therapeutic properties of Epsom salts, menthol and essential oils.
Alkaline Water to leverage national retail footprint to cash in on CBD craze
Cannabidiol, better known as CBD, is now more popular online than Beyoncé, and 1-in-7 Americans are now using the touted wellness extract that is used to treat everything from sleeplessness to acne.
Alkaline Water notes the surge in interest and use of CBD has led cannabis research firm BDS Analytics to forecast U.S. sales will surge from US$1.9 billion in 2018 to US$20 billion by 2024 — a compound annual growth rate of 49 per cent.
CEO Wright said the company’s growing national footprint inside convenience stores, supermarkets, major retailers and drug stores gives it a unique opportunity to capture the exploding CBD trend. He adds the firm is already talking to “a number of our major retail clients who have been early adopters and are excited about this product expansion.”
Retail chain giants like Walgreens, Rite Aid, Sprout, Whole Foods, and Urban Outfitters have all been quick to embrace CBD topical products and have introduced various products in select markets, the company said.
In 2019, its flagship Alkaline88 product was added to 1,100 convenience store shelves and reaches 47,500 retail locations in all 50 states. The company’s distribution spans more than 150,000 stores in total, including 9 of the top 10 largest retailers like Whole Foods, Krogers and Walmart.
The company announced earlier this month that it is expanding its national footprint with Kroger and adding its flavoured water products to 55 Houston, Texas stores.
Alkaline Water said it will remain compliant with the Food and Drug Administration’s regulations for CBD. The FDA so far allows CBD topicals, but the industry is carefully awaiting its guidelines for infused food and drinks.
AQUAHydrate acquisition gives company star power
WTER reported record first quarter sales of US$10.2 million in August when it also gave revenue guidance of US$46 million to US$50 million for fiscal year 2020.
But those revenue figures don’t include a single dollar from a sale of its soon-to-be-introduced CBD products, which should help top line figures balloon with all that hype surrounding CBD and the company’s rich distribution network to exploit.
But what further makes The Alkaline Water Company’s story compelling is its September acquisition of AQUAHydrate, a Los Angeles-based premium bottled water brand backed by movie star Wahlberg, rap mogul “Diddy” and celebrity trainer Jillian Michaels.
The idea is for the two companies to join forces and leverage their celebrity star power and 74 million combined social media followers to promote the CBD products in the surging market.
Combined the companies expect to generate $65 million in sales for fiscal 2020 on a pro forma basis. And the two firms will target different consumer demographics: Alkaline will focus on families, while AQUAHydrate will zero in on the lifestyle and athletic demographic.
“The AQUAhydrate and Alkaline88 brands align well and will support exciting innovations in flavors, sparkling and CBD products,” Wahlberg said in the September release.
“The acquisition of AQUAhydrate is an unprecedented opportunity that allows The Alkaline Water Company to cement itself as a leader in various multi-billion dollar segments which include premium water, functional & wellness, and the CBD market,” said Wright. #Alkaline88 $WTER https://t.co/UflDSqqzC8
— Alkaline88 (@Alkaline88) September 10, 2019