Florida Says No to Lab-Grown Meat: 3 Stocks That Could Take a Hit
Lab-grown meat has been a growing part of social and political debate for several years now. Given the ethical concerns around factory farming and the reservations some people have toward eating meat, there has been a proliferation of start-ups researching and developing lab-grown meat products.
However, not everyone has been enthusiastic about this trend. Despite lab-grown meat not even hitting the shelves of grocery stores yet, vocal opponents have already emerged. In the state of Florida, Governor Ron Desantis signed a bill into effectively banning the sale and manufacturing of lab-grown meats. Shortly after, Alabama Governor Kay Ivey signed into law a bill that would make selling lab-grown meat a “misdemeanor.”
Below are 3 stocks that could potentially be at risk of these newly enacted laws as well as future bans by other states.
Tyson Foods (TSN)
Tyson Foods (NYSE:TSN) is a large and well-known food corporation in the United States. The company processes all kinds of meats, including beef, pork and chicken, which has allowed Tyson Foods to generate billions of dollars of revenue. Despite being a prolific food brand, Tyson has come in and out of scrutiny over the past years. The food giant’s connection to unethical factory farming practices is just one of the controversies. Lab-grown meat seems like it could be the next.
Early in 2024, Tyson Foods announced that its venture capital arm, Tyson Ventures, made an investment in a food startup by the name of Memphis Meats. The food tech venture develops “cultured meat” directly from animal cells. While this technology is still in the early stages of development, the backlash lab-grown meat is already receiving probably does not bode well for the success of this kind of investment.
Cult Food Science (CULTF)
The next entry is a tad unconventional. Cult Food Science (OTCMKTS:CULTF) happens to be a Canada-based venture capital firm that specifically focuses on food tech investments. The venture firm has invested in a number lab-grown meat startups. These investments include Novel Farms and Biftek. The former is based in San Francisco, California and develops technology to recreate the taste and texture of cultured meats. The latter startup is headquartered in Newark, Delaware and produces a microorganism-based growth medium supplement to create muscle stem cells for lab-grown meats.
Of course, Cult Food Science is quite diversified geographically in terms of its venture investments. However, certain food startups that Cult Food Science has funded could suffer from regulatory risks in the states in which they operate or eventually sell products, which ultimately puts CULTF at risk.
JBS (JBSAY)
JBS (OTCMKTS:JBSAY) is a Brazilian processor of meats. In particular, the firm deals in beef, pork, chicken, fish and lamb markets and develops plant-based food products. Last year, the meatpacking firm announced it would create a research center, the largest of its kind, for lab-grown meats. Construction on the $62 million research facility has already begun. Moreover, JBS has invested heavily in a cultivated beef plant in Spain, effectively expanding its reach in the novel market.
JBS will likely benefit from having invested in plant-based meats in different geographies. While there is no direct exposure to Florida and Alabama, the likelihood of more lab-grown meat bans popping up in the states is not insignificant. Put more concretely, if JBS desires to expand and create lab-grown meat facilities in the United States, it could brush up against regulatory risks.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
