$23 Million "Food Fight"

By Matthew Milner, on Wednesday, November 20, 2019

One of the world’s largest food companies is gearing up for a big fight…

And the stakes couldn’t be higher:

With a market worth an estimated $100 billion up for grabs, this company and its competitors are ready to fight tooth and nail to gain an advantage.

This could mean bad news for these businesses — but great news for investors like you.

You see, not only do we get to watch a dramatic battle unfold…

But we can also get valuable clues about how to profit from this market opportunity.

Let me explain.

Food Fight

Kraft Heinz (Nasdaq: KHC) is a giant of the food world.

It has annual revenues of about $26 billion, and a market cap of $38 billion.

But with consumers gravitating to healthy options nowadays, sales of its products like Cheez Whiz and Oscar Meyer hotdogs have plummeted.

Even Heinz’s iconic ketchup is feeling the heat.

That’s why KHC stock currently trades for just $30, a decline of 70% from a few years ago.

But now, to turn its fortunes around, it’s looking to a fascinating new market…


Don’t Touch the Plant!

Now that cannabis has been legalized in about 33 U.S. states, it’s turned into one of the fastest-growing markets in the U.S.

It’s already worth about $13 billion, and experts predict it will soon be worth $103 billion.

But because it’s still illegal at the federal level, big companies have to be careful about how they get involved.

For example, a major company like Kraft would never “touch the plant.” In other words, it would never get involved in growing or selling cannabis directly.

But given the tidal wave of cannabis consumer products that are coming — from “edibles” to CBD-based drinks — a company like Kraft needs to position itself now.

After all, Kraft sells consumer products, and cannabis is the next major consumer product category.

And this is why Kraft has devised a smart — and safe — strategy to capitalize on this growing trend…

Kraft is Evolving

You probably don’t know this, but in addition to owning a portfolio of food brands, Kraft also runs a venture capital fund.

The fund is called Evolv, and it focuses on investing in food-related startup companies.

For example, it might invest in companies that are developing “alternative” proteins, like Beyond Meat or Impossible Burger.

It could also invest in cannabis companies — but it needs to be very careful:

You see, as I mentioned earlier, Kraft can’t “touch the plant”…

And furthermore, it can’t invest in companies that touch the plant. But as you’ll see, the company can still capture a piece of this explosive market.

To show you what I mean, let’s look at its most recent investment…

Technology for Cannabis

Last month, Evolv led a $23 million investment round for a cannabis technology company called Flowhub.

Flowhub offers cannabis companies a wide range of technology tools, from mobile inventory management, to software for in-store pick up.

These are the types of technologies that will enable major companies like Kraft to take advantage of the cannabis market.

After all, given the regulatory aspects of this sector, companies will need specialized tools, technology and software to operate efficiently and compliantly.

Which is why experts predict demand for these companies — both from businesses and from investors — will continue to soar in the coming years.

For instance, Fortune Magazine reported that cannabis software companies raised a total of $178 million last year — up from just $5 million four years earlier.

Now Is the Time

As my colleague Lou wrote to you yesterday about the cannabis market:

“To maximize your profits, look to invest in under-the-radar technology companies that can enable this market to grow faster and bigger. The marijuana market is red-hot right now and it’s only getting hotter.”

I couldn’t agree more.

Private startups are creating the key technologies that will enable the cannabis industry to soar.

And as larger companies step in to invest and acquire these businesses, investors like you will have substantial opportunities to profit.

So don’t miss out!

Best Regards,
Matthew Milner
Matthew Milner


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