Sproutly (CSX: SPR) — a high risk idea that is traded on the Canadian securities exchange — aims to be a vertically integrated cannabis consumer products company, suggests Jimmy Mengel, editor of The Crow's Nest.

The company is bringing together pharma-grade cultivation, secured distribution solutions, and advanced technologies to redefine the cannabis industry.

They have patents pending for water-soluble cannabis ingredients. Currently companies use butane or CO2 to scorch the cannabis pant in order to extract oil for smoking, edibles and other products.

Oil is not soluble and is difficult to properly infuse into edible products. Our bodies simply don't process them quickly or efficiently. Water, on the other hand, is much easier and cleaner for such uses.

Sproutly is on the cutting edge of beverage based cannabis technology. Cannabis beverage sales quietly raked in over $35 million last year. That's only including legal states like California, Colorado, Oregon, and Washington. We've seen double-digit growth over the past three years. As more states legalize marijuana, these numbers are going to go crazy.

But perhaps the most important part for investors is that big beverage companies are already placing their bets and planning massive buyouts of small companies. We've already seen that when Constellation Brands (STZ) — which sells Corona and Modelo beer, Svedka vodka, and other big brands, ponied up around $191 million for a 9.9% stake in Canopy Growth Corp. (CGC).

Sproutly could be a prime buy-out target for large companies looking into the next wave of marijuana profits, especially in the booming cannabis beverage market. Coca-Cola (KO) and PepsiCo (PEP) and both actively searching for cannabis stocks, and I believe Sproutly is one of the best under-the-radar options for such a merger.

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