AGH raises $2.55M - set to focus on Canadian and US expansion

Our Investment Althea Group Holdings (ASX: AGH) just closed a $2.55M capital raise.

AGH raised $2.55m at a price of 1.8c per share and said that a “strategic reset” had now been completed, allowing the company to focus on its THC beverage manufacturing business in Canada and the US.

Peak currently holds a ~35% market share on the THC infused beverage market in Canada with FY25 revenues of around $15.5M.

AGH has recently opened a manufacturing facility in Florida, looking to replicate the success and growth shown from the Canadian market.

The US market for THC drinks is set to expand near 20x from 2024 to 2028, growing to a value of near $30BN. (Source)

While AGH has generally partnered with existing drinks makers and produces their drinks, AGH launched its own brand a couple of months ago into the Canadian market that we covered here.

We see the potential for one of these drinks to go viral such as White Claw (seltzer brand) or Liquid Death (canned soda water brand) due to the innovative product and capabilities that Peak can produce.

The 11 reasons we invested in AGH

We Invested in AGH back in July at 2.5c per share.

For those who haven’t read it yet, check out the full initiation note here: Our New Portfolio Addition: Althea Group Holdings (ASX: AGH)

Here is a quick overview of the 12 key reasons why we Invested in AGH. These were all published in that initiation note.

1. Consumer drinking habits are changing, THC drinks to replace alcohol?
2. AGH is the biggest manufacturer of THC beverages in Canada - $8m+ revenues in 6 months
3. The Canadian business has capacity to grow even further - currently operating at ~22% of its total capacity
4. AGH has just entered the US market, the much bigger, faster growing market for THC beverages
5. AGH’s business model is based on a Coca-Cola style distribution model
6. AGH already has deals with major companies like A$3.34BN Boston Beer Co
7. AGH has its own drink brands... one could go “viral”
8. AGH has just restructured its business, cutting costs and selling non-core assets.
9. Big Alcohol has come into the THC drinks space in the past... will they do it again?
10. AGH can design, develop and produce a THC version of ANY existing, popular drink
11. THC drinks could go through a big “popularity” wave