Second Cup. Ltd (SCUPF) announced today that it’s changing its company structure. In addition, the company plans to change its strategy. Essentially, the company will change its name to Aegis Brands. Under the new structure, Aegis Brands will own the Second Cup brand. In addition, the brand portfolio will include other cannabis and food business.
Second Cup changes the culture
Canada is currently in the middle of the next stage of legalized cannabis. Under this stage, companies like Second Cup are working to introduce products that meet the next phase of consumer demand, such as infused beverages and other food products. The market is expected to fulfill big promises. This explains why Aurora is preparing for this market.
Coffee companies like Second Cup are also entering the space. It is unclear if Aegis will sell coffee and cannabis beverages under one roof. However, there are illegal locations that sell both. Perhaps, this could result in a gradual change in customer needs. However, it’s too early to tell. How consumers accept cannabis as a mainstream drink from Second Cup is anyone’s guess.
Are the experts getting it wrong?
Companies like Second Cup expanded their operations in the last year. This was due to an expectation of increased demand for products. However, what was expected hasn’t turned out to be true.
Not much of the demand expectations are reflected in the earnings. Consequently, the stock price is taking a hit and many companies have hit a bottom. Aurora Cannabis (ACB)(ACB.TO), for example, has seen a dip in its short interest ratio. This essentially means that investors are expecting the stock to rebound. On the other hand, some experts like Jim Cramer have asked investors to stay away from ACB.
ACB is reporting next week and we will see get an insight into how the company is doing on the revenue front.
It will evolve slowly
Legal cannabis set a platform for a new wave of products. Companies are trying to make it as accessible as possible for consumers. Canopy Growth (WEED)(CGC) is working to make cannabis chocolates. It’s only a matter of time before the coffee chain Second Cup introduces cannabis products to its customers. While the timeline is unknown, we believe the acceptance of cannabis will shape up slowly.