To be clear, there was apparently market disappointment that the Sproutly news was not about a partnership with a major soft drink company such as Coke. The Conference call this morning talked about the JV encompassing both the CBD and THC markets. They will extract both CBD and THC from the cannabis plant and market beverages covering both the psychoactive and wellness spectrum. To me the negative market reaction was unfounded and I will explain why.

The deal with Moosehead (Canada's 4th largest brewing company) for 5 years will create a new company with 50/50 ownership between Sproutly & Moosehead and will focus exclusively on producing cannabis beverages (EXCLUDING hemp). This news is amazing in itself. By the way, Hemp-based CBD oil is NOT the same as Cannabis-based CBD oil. Cannabis oil contains more CBD than hemp oil which is why it is preferred over hemp. Explained here:

Coke is not interested in getting people high or drunk. They would have been in the alcohol business long ago if that was the case. They are more into wellness drinks now, given the drop off in the sugary stuff that Generation Z is turning away from.

Sproutly owns Infusion Biosciences Canada Inc. which it bought out in August 2018. Infusion Biosciences Canada, through its licensing agreement with Infusion Biosciences, owns the exclusive rights to utilize the APP (Aqueous Phytorecovery Process) Technology for recreational and medicinal markets in Canada, Australia, Israel, Jamaica, Germany, and the European Union. As you may know, Infusion Biosciences has created Infuz2O, the first truly water-soluble cannabis solution to be formulated into beverages.

Only one company in the US has non-exclusive rights to Sproutly's (aka Infusion Biosciences) APP process and it is ONLY for the hemp-based extract CBD...not the good stuff from cannabis. (this is not a plug for that company but if you need to know the name you can easily Google it).

My point is, if a company such as Coke wanted a major foothold in the CBD-infused drink market with the ONLY patented water soluble solution, who do you think they would buy? A lower quality hemp-based CBD water company that has a non-exclusive agreement with Sproutly? Or Sproutly itself?

I think the answer is obvious. The Moosehead deal was only a partnership. This story is not even close to being over.