beverages Archives - Green Market Report

Debra BorchardtMarch 30, 2021
beverage.jpg?fit=960%2C640&ssl=1

7min14651

The cannabis industry has seen some players make big bets on beverages, but so far it hasn’t paid off. The market is definitely growing, just not at the rate many had hoped for. Plus, the slow growth of this form factor is not an indication that it won’t continue to increase and eventually gain even more market share. Cannabis tracking firm  Headset recently released a report on the cannabis beverage industry and found that in the US, “The beverage category’s market share has held fairly steady between 0.85% and 1.1% over the last several years. In fact, market share to the category was slowly decreasing through late 2019 and early 2020 before maintaining just below 0.9% during the beginning of the COVID-19 pandemic.”

Despite the consumers tapping the brakes on beverages, the category has begun a turnaround and Headset believes the products are poised to reach an all time high as pandemic restrictions ease. The report also noticed that consumers are at least giving the products a try as basket data is showing more people are tossing some beverages in the bag. The report said, “We can see a relatively steady march upwards over time rising from 1.6% in January 2018 to 2.8% in February 2021. Even though market share hasn’t drastically increased, Beverages are making their way into more and more baskets each month, indicating that more customers than ever are trying THC-infused Beverages.” Only a little over 20% of the shopping carts are filled with only cannabis beverages, meaning the other almost 80% are adding beverages to a larger order. By contrast, a third of edible consumers are buying just edibles when they go to the dispensaries. 

It’s A Girl Thing 

What has been learned is that women are the big buyers of cannabis beverages. In every single age category, women outspent men when buying cannabis-infused beverages. So, hands down, the main consumer for cannabis-infused beverages are women.

Where things get even more interesting in the report is when Headset dives into dosage. The two main categories for purchases are on either side of the spectrum – either low like a microdose or very high for maximum effect. The report stated, “In fact, most of the growth in the 10mg or lighter section over the last few years has come from the 0-5mg ‘microdosed’ cohort of Beverages, which has risen from 14.4% category share to more than 18% of sales this year to date.” For example, so far in 2021 beverages with over 100mg accounted for 59.8% of the market share, while products with less than 5 mg were the second-largest category with a 19.5% market share. 

California Drinking

The report stated that “California Beverage sales in January 2021 clocked in at $15.5M, nearly six times greater than the $2.7M recorded during January 2018, the first month of recreational sales.” Also, since the competition is heating up and there are more beverages to choose from, the top three selling in 2018 brands have seen their market share decline. The data showed that some brands, like Kikoko and Cannabis Quencher have held firm in the market even though new brands have entered the space. “Legal Beverages, on the other hand, was unable to keep up, falling from the third top selling Beverage brand in 2018 to a market exit in 2020.” 

Headset also determined that there are some newer success stories like Lagunitas Brewing Company’s ‘Hi-Fi Hops’ which sells only products containing 10mg of THC or less per serving. Heineken (OTC: HEINY) owns Lagunitas and so the beer is no longer considered a “craft beer”. “Keef Cola, a legacy brand originating way back in the medical cannabis markets, was relaunched in California in 2019 and quickly rose to a prominent position by offering affordable soda, mocktail, and flavored water products in both 10mg and 100mg package sizes.” 

Just like the alcohol industry has seen a big move towards hard seltzers, cannabis beverages have also dipped into the bubbly category. CANN Social Tonics has made a quick splash by using celebrity investors to get attention. The report stated that “Despite extremely high EQ (price per milligram of THC) prices, and with less than a year and a half in the market, CANN has pulled away as California’s top Beverage brand by an increasingly wide margin.” That doesn’t mean it’s alone in the space, Pabst Blue Ribbon recently launched a 5mg seltzer in California, and cannabis-infused wine-like product Rebel Coast left the vineyard to focus on canned seltzer products. 

In Closing

The cannabis beverage is still only a tiny part of the market, but it is slowly growing. Women seem to be the dominant consumer along with gen-Xers. The desired dose is either maximum effect or just a light buzz. The in-between products aren’t generating as much interest and cannabis seltzers could become just as big as alcoholic seltzers. 


Debra BorchardtOctober 1, 2020
drink-2.jpg?fit=960%2C641&ssl=1

4min9310

Canopy Growth Corporation (NYSE:CGC) and Acreage Holdings, Inc. (OTC: ACRHF, ACRDF) announced today that following the implementation of their amended arrangement, Acreage developed a plan to market Canopy Growth’s THC beverages in the legal adult-use markets in the U.S.

Beginning with Illinois and California in summer 2021, Acreage said it will launch Canopy Growth’s THC beverages into markets as well as in its own dispensaries. Acreage said it will access existing distribution channels through its strategic corporate relationships of both Acreage and Canopy. At this time there are no beverages in the marketplace from the company. The website says that it has “Developed a proprietary process that distills whole flower cannabis into a clear liquid. We are using this liquid as an active ingredient in a wide variety of THC and CBD beverages, offering consumers an alternative to traditional drinks.”

“We have had an incredibly successful introduction into the Canadian cannabis-infused beverage industry with over 1.5 million cans of our THC-infused RTD beverage sold to date,” shared Canopy Growth CEO, David Klein. “We introduced a new product category to cannabis consumers that we knew had the potential to disrupt one of the most mature industries and since launching in Canada, Canopy Growth now owns 5 of the top 6 SKUs in the beverage category with a 74% market share. We are excited for Canopy’s beverages to be introduced to the U.S. market and know from recent BDSA reports that the United States represents a market that achieved roughly $60M in beverage sales in 2019.”

Constellation Brands (NYSE:STZ), which has a big stake in Canopy Growth reported its earnings for the second quarter with revenue falling 3% to $2.26 billion. The losses from its position in in Canopy were $31 million. On a reported basis, earnings for Constellation edged up to $2.76 a share vs. $2.72 a year earlier. Despite bars and restaurants being closed in the U.S. due to the pandemic, the company said that liquor store sales made up for the closures. The pandemic though is causing slowdowns in Mexico.

“We see THC-infused beverages as a game-changer in U.S. cannabis, and we are excited to launch Canopy Growth’s unique beverage offerings to our core markets offering the greatest growth potential next year,” said Bill Van Faasen, Interim CEO of Acreage Holdings. “We are already working on our beverage production capabilities, and look forward to tapping the wealth of experience and research Canopy can offer following its successful entry in the category last year.”

Amended Agreement

Canopy and Acreage recently amended their previous agreement in which Canopy would acquire Acreage once the U.S. legalizes cannabis at the federal level (Triggering Event). The deal was originally valued at $3.4 billion. Instead, Acreage shareholders got an initial up-front payment of $37.5 million in connection with the modification of Canopy Growth’s rights, including the extension of the term, and give Acreage shareholders the ability to participate in upside potential upon the Triggering Event.

There are now Acreage “Fixed” shares and Acreage “Floating” shares which is causing a great deal of confusion amongst investors. The basic gist of the difference is that the fixed shares represent the 70% that Canopy is obligated to buy at .30xx and the floating shares are the 30% they have an option to buy at 30 day vwap or $6.41, whichever is higher.


Debra BorchardtAugust 4, 2020
Canna_Hemp_ALL_726x.jpg?fit=726%2C646&ssl=1

4min12970

Arkansas-based beer distributor Premium Brands of Northwest Arkansas is adding a hemp beverage to its lineup. Premium Brands currently have distribution agreements with MillerCoors (NYSE:TAP), Corona (NYSE:STZ), Yuengling, Pabst Brewing, Boston Beer, Mike’s, Seagram’s, and Heineken USA to name a few.

Good Hemp, Inc. (OTC: GHMP) makes Good Hemp Fizz and CannaHemp beverages, which is a line of naturally flavored waters infused with 10mg of THC-free hemp extract and prebiotic fiber. The company says that unlike other hemp-infused beverages that contain CBD, its products are made with hemp seed oil which is categorized as “GRAS” (under sections 201(s) and 409 of the Federal Food, Drug, and Cosmetic Act, and therefore not subject to FDA review and approval).

“Hemp Infused beverages is a growing category, and we are excited to add a solid brand like Good Hemp Fizz and CannaHemp to our non-alcoholic portfolio,” said Heath Sutherlin, GM at Premium Brands. Sutherlin continued, “We look forward to working with the Good Hemp reps for a strong Labor Day rollout and building a long-term successful partnership in the territory.”

Premium Brands will distribute Good Hemp Fizz and CannaHemp throughout 11 counties in northwest Arkansas servicing approximately 900 C-stores, grocers, and liquor stores.

Beverage Market

Mazakali wrote a white paper on cannabis drinks and it stated, “Infused drinkables currently hold a market share of under 1% in the US, a figure that is far too low when compared with industry estimates for a $2.8 billion global cannabis beverage market by 2025. Advances in cannabis science along with the thirst for a healthier alternative to alcohol are but two factors behind this anticipated growth.”

The market is being flooded with hemp drinks of all sorts these days.  The hemp-infused beverage market is expected to reach $2.8B by 2025 with a CAGR of 18%.

Constellation Brands had been expected to create its own line of cannabis drinks with its investment in Canopy Growth. Its current slate of drinks includes a Houseplant-branded Grapefruit beverage with 2.5 milligrams of THC, Tweed’s Bakerstreet & Ginger and Houndstooth & Soda drinks containing 2 milligrams THC as well as a high-potency Deep Space cola with 10 milligrams of THC, the maximum under Canadian regulations.

“We are excited to add Premium Brands to our distribution network,” said Rise’ Meguiar, VP Sales and Innovation at Good Hemp. “They are a well-established distributor in NW AR, and by adding them to our network, our products will now be widely available across the northern part of the state.”

 

 


Julie AitchesonJune 3, 2020
drink.jpg?fit=960%2C583&ssl=1

5min15320

The summer of 2020, like the rest of the past year, is shaping up to be fraught with tension, unrest, and anxiety, but at least one thing is certain. There will be hot days (in the northern hemisphere, at least) and people will be thirsty, not just for cold, refreshing beverages, but for the opportunity to relax, unwind, and connect in whatever form is available to us in the months to come.

Sometimes soda, iced tea, or a tangy lemonade do the trick when temperatures rise, but sometimes an “adult beverage” is in order to take the edge off of these very edgy days. With favorite local watering holes either closed or restricted by limited seating and social distancing, grocers and liquor stores are stocking up on wine, beer, cocktail mixers, and alcohol-enhanced sodas to enjoy at home. Meanwhile, some companies are hatching more innovative ways to beat the heat. Enter mood33, House of Saka, and Cann Social Tonics.

Mood33 heralds the debut of its new hemp-infused herbal tea line with descriptives like “soulfully delicious” and “mindfully sweetened”, a surefire way to attract all of the hemp-minded Whole Foodies out there. Boasting 33mg of organic, American-grown hemp extract per bottle in blends that include botanicals, tea, and real fruit juice, mood33’s beverages offer more than a way to slake your summer thirst. With names like “Joy”, “Passion”, and a “Wellbeing” blend that includes 133mg of caffeine from guayusa and green tea, these drinks offer an alternative to the intoxicating effects of that IPA or chilled martini, and all at 70 calories or less.

House of Saka takes a different approach, as a Napa-based company focusing on “wine-style” libations for those disinclined to give up the grape. House of Saka is an all-female-run company focused on crafting alcohol-free, cannabis-infused wines for the luxury market. Their first release, the rosé-inspired Saka Pink, is “rosé-inspired”, and at 5mg of THC, 1mg of CBD, and only 16 calories per serving, consumers can feel good about that second glass.

As an herbalist and dedicated Whole Foodie myself, Cann Social Tonics caught my eye with its attention to wholesome ingredients and inventive infusions like Grapefruit Rosemary and Cardamom Blood Orange. Each beverage in the line is sweetened only with 100% organic agave nectar from Mexico and juices that are not from concentrate. With 2mg of THC and 4mg of CBD per can, Cann Social Tonics promises a fizzy summer fix with plenty of feel-good ingredients to ensure that the next morning is as pleasant and brain fog-free as the night before.

While you may not be able to stroll into your neighborhood tavern and order one of these plant-centric beverages over the counter, there are other ways to get your cannabis-infused mocktail this summer. Mood33 lists twenty-five grocery locations carrying their products in the U.S., as well as an online ordering option. Cann is available at dispensaries listed on their website and by delivery and House of Saka is also available at select dispensaries. Cheers!


Kaitlin DomangueFebruary 18, 2020
saka_thanksgiving_cocktail_3_50-scaled.jpg?fit=1200%2C1800&ssl=1

6min16530

House of Saka, a Napa Valley-based company that makes an alcohol free infused beverage (it can’t be described as an infused wine) has hired Sue Bachorski as its Chief Operating and Financial Officer. Bachorski is a wine and spirits veteran who previously spent nearly three decades as a Senior Operations and Finance Executive at Constellation Brands, Inc. (NYSE: STZ).

“After spending my career in the alcohol beverage industry, I am eager to bring my knowledge and experience to the cannabis industry – especially in the infused beverage sector,” stated Bachorski. “I am thrilled with the opportunity to join the House of Saka and I am eager to help the company continue to carve out its niche in this exciting space.”

At House of Saka, she will oversee operations, logistics, and finance for the company’s Saka Vinfusions as it continues to expand its portfolio of products as well as its national footprint. As a wine and spirits expert, Bachorski has also worked as an SVP at Global Wine & Spirits, which supported 24 production locations in 5 countries including Supply and Demand Planning, Procurement, Logistics, Warehousing and Distribution, Environmental Health and Safety, Quality and Research and Development.  She also served as SVP & CFO Pacific Wine Partners where she led her teams through multiple acquisitions, business combinations, and organizational re-alignments.

“A talent acquisition such as Sue’s is paramount to delivering on House of Saka’s mission to produce and market the best-selling, most highly-regarded infused beverages in North America,” explained Tracey Mason, co-founder, and CEO for House of Saka, Inc. “We believe this addition to our team will provide the additional know-how and competitive advantage we need to flourish for years to come.”

House of Saka

House of Saka has two beverages at this time, Pink (which looks a lot like a rose type of beverage) and White. The Pink recently won third place in the December Emerald Cup Beverage category, which was the brand’s first entry into a competition. The product uses a nano-emulsion technology in which cannabis oil is broken down into microscopic, water-soluble and self-homogenizing particles, which allows for immediate absorption through the mouth and stomach lining for rapid onset. House of Saka’s experience begins approximately 5 to 15 minutes after consumption, so users get immediate feedback on how to self-dose. The products are only available in California at select dispensaries at this time.

The company also plans a line of infused beauty and wellness products under the banner House of Saka Beauty. The company boasts an all-female leadership team guided by an all-female advisory board with more than 100 years of collective experience in wine, cannabis and luxury branding.

Infused Beverages

According to a recent report on the global cannabis-based ‘alcoholic beverages market,’ this sector, which includes non-alcoholic cannabis-infused beers, wines, and spirits, is expected to grow by 19% or $155 million between 2020 and 2024 making it the fastest-growing segment of the cannabis industry. Constellation Brands was one of the first companies to eye this trend when it made a huge investment in Canopy Growth (NYSE: CGC). However, the investment may have been too big and too soon as Constellation has since written off a large sum of the investment and fired the company’s CEO Bruce Linton.

The writedown of Canopy Growth hasn’t scared away others. Molson Coors Brewing’s Canadian unit formed a joint venture with medical marijuana producer Hydropothecary Corp. to produce a  nonalcoholic cannabis-infused beverage. Breakthru Beverage Group, the alcohol wholesale business co-led by  Blackhawks Chairman Rocky Wirtz, said it would invest $9.2 million in Canadian cannabis producer CannTrust.

Editors Note: Green Market Report’s Co-Founder Cynthia Salarizadeh is a Co-founder of House of Saka and Editor-in-Chief Debra Borchardt is on the Advisory Board.

 


Noemi GonzalesFebruary 14, 2020
792399-v0_5-GMR-BC-FB.png?fit=960%2C469&ssl=1

5min10170

“Cannabis Cocktails, Mocktails & Tonics:

The Art of Spirited Drinks and Buzz-Worthy Libations” by Warren Bobrow 

What a time to be alive!

More and more states are moving toward legalization, strains have evolved, and now you can learn about the best drinks to accommodate your preferred cannabis strains.

Today we are reviewing “Cannabis Cocktails, Mocktails & Tonics: The Art of Spirited Drinks and Buzz-Worthy Libations” by Warren Bobrow and doing a deep dive on the best matches between beverages and marijuana.

-Topic Focus-

As the name suggests, this book focuses on the best combinations of cannabis and alcoholic beverages and boasts over 75 unique recipes to enjoy throughout this interesting book.

Familiarize yourself with a solid decarboxylation process in order to maximize the psychoactive effect that cannabis can produce.

You will find more than just alcoholic beverage recipes here. The range of recipes found here is quite interesting. You can find detailed steps to create your own infused milk-based drinks, various teas,  concentrated oils, compound butters, and more. Pretty cool, huh?

There is also a degree of information focusing on the social perception of cannabis and how it has evolved in recent years. This recent evolution in understanding cannabis is what allows breathing room to our innovators and creators to experiment with topics such as infusions, concentrates, beverages and more.

 -About the Author-

Warren Bobrow’s expertise on these topics becomes clear very quickly in this book. Warren has experience writing content focused on cocktails and drinks for publications such as Eater, Foodista, Total Food Service, Saveur and Whole Foods, Distiller and Beverage Media, Serious Eats, and many more. Warren also has experience teaching his craft at Stonewall Kitchen in Maine.

In 2010 Warren was asked to participate as a Ministry of Rum judge in the Fête de la Gastronomie in Burgundy. You can explore more of his content at “The Cocktail Whisperer”, his popular blog and through his variety of books. Some of the books written by Bobrow include “Shrub Syrup Cocktails”, “Apothecary Cocktails”, and “Whiskey Cocktail and Bitters”.

-Reading Experience-

Infusions, extractions, and mixing your own beverages can be challenging but “Cannabis Cocktails, Mocktails & Tonics: The Art of Spirited Drinks and Buzz-Worthy Libations” by Warren Bobrow shed some excellent light on the topic. Online guides can be confusing or outright incorrect so having guidance from a seasoned veteran like this author makes a powerful difference in the quality of your own extractions/infusions.

You can tell that the author has experience teaching as each recipe and process is broken down in a way that even a rookie to cannabis and mixing can keep up with.

-Summary-

So much reliable information condensed into 160 pages here in this book, it’s great!

The detailed processes do not skip steps and make sure to be very clear all the way to completion.  Some of these recipes seem downright exciting to try out and would make for fun social gatherings to experiment with friends.

This book is fun, insightful, and has a ton of value to offer without an overt amount of fluff or ranting.

If you would like to start getting your mix on and see what “Cannabis Cocktails, Mocktails & Tonics: The Art of Spirited Drinks and Buzz-Worthy Libations” then get your copy here and get started:

https://www.amazon.com/Cannabis-Cocktails-Mocktails-Tonics-Buzz-Worthy/dp/1592337341/ref=sr_1_1?crid=324H3DEL9CJ1X&keywords=warren+bobrow&qid=1580745556&sprefix=warren+bobr%2Caps%2C322&sr=8-1


Anne-Marie FischerAugust 27, 2019
drink-2.jpg?fit=960%2C641&ssl=1

8min17380

What could have been a threat to alcohol and the beverage industry, has now turned into one of the beverage’s biggest opportunities since hops met barley.

Both the cannabis and beverage industries saw dollar signs when Constellation Brands added a $4 billion investment to its already ample investment into Canopy Growth. The beverage biggie, that owns Corona, certainly turned heads as cannabis brands, and leading beverage companies began inking deals to ensure their brands showed up in drink coolers across the country. 

Headset recently came out with an extensive report examining the rapidly developing cannabis-infused beverages industry, stating that although beverages don’t make up the majority of cannabis product sales, they are “a category within cannabis that’s worth watching.” 

The Growth of Infused Beverages

While market share has experienced an incremental increase, the overall market for infused beverages has doubled, moving from $1.5 million to $3 million in 2019. 

Infused beverages sales are concentrated in Washington, Colorado, and Nevada. California will be next to enter the beverages race when Lagunita’s HiFi Hops hits the shelves. Most recently, in Q2 2019, Washington led in beverage sales ($4.2 million), followed by Colorado’s $3.9 million. 

What Are People Drinking?

Infused sodas are reigning supreme in the beverages category, gaining 3.9% of the overall beverages market share. Surprisingly, warm drinks like teas, coffee, and hot cocoas lost market share, as did Iced Tea, Lemonade and Fruit Drinks. Infused sodas accounted for 70% of Washington’s beverage sales in 2019, while in Colorado and Nevada, 18% and 26% of respective sales were represented by soda. 

“Mocktails” also made gains over the last year, but the impact is not yet significant enough to believe that cannabis will become an alcohol replacement drink, although Nevada can attribute 12% of beverage sales to cannabis mocktails, which is aligned with Vegas’ reputation as a party town.

Headset even went as deep to look at the flavors that people were preferring. In Washington, lemon, lime, orange, and apple flavors make up 52% of the infused soda market, with the rest of the flavors being made up of distinct fruit flavors like huckleberry, hibiscus, and honeydew, just to name a few. In Colorado, the majority of the soda consumers prefer a flavorless beverage (this is also because drops, mixes, elixirs, and syrups sell the most in this state); in California, they love the taste of cold tea; and in Nevada, Fruit Punch tickles the most palates. 

Headset attempted to compare the prices people are willing to pay for beverages across states, but couldn’t find any correlation. For example, Tea, Coffee, and Hot Cocoa are amongst the highest priced items in Nevada, but of the lowest-priced items in Washington. Headset speculates that there is a different brand landscape in each state that attributes to these nuances in what people are willing to pay.

Getting “Buzzed Over Stoned”

In 2017, 100mg THC infused products made up most of the market share at 90.9%; in 2019, it’s dropped 67.1% and has been replaced by microdosed formats in the 0-5mg range. This leads Headset to conclude that “consumers are more interested in getting buzzed than stoned.” If people are indeed using cannabis-infused beverages for alcohol-replacement, they are likely consuming multiple beverages in one sitting, as they do beer or wine. Despite speculation, Headset projects that there is “a lot of room for low dose beverages”.

The Who and Why of Infused Beverages

Perhaps surprising, the Silent Generation is the largest consumer of infused beverages in Colorado, while in Nevada, enjoyment of these beverages is more evenly distributed across age groups. It makes more sense when you remember that in Colorado, drops, mixes, elixirs and syrups are of the leading product categories, which makes it easy for people of the Silent Generation to easily dose cannabis in a cup of tea.

POS data collected by Headset suggests that cannabis-infused beverages are an impulse buy or an add-on item. People buying beverages are usually purchasing pre-rolls or edibles and throw in beverages as a last thought. Beverages are most commonly bought alongside edibles, suggesting that beverages are more appealing to those who do not prefer to smoke or combust their cannabis.

CBD is Having Its Moment

CBD infused beverages are currently holding at 25% of the infused beverages market share, according to Headset. With the passage of the U.S. Farm Bill of 2018, hemp-derived CBD products could be a threat to THC-infused beverages that can now be sold in coffee shops and retail stores.

Crack Open a Cold One

The cannabis-infused beverages market isn’t yet massive but shows a great opportunity for cannabis and CBD companies to get in on the ground. Headset has concluded through their analysis of 4 states that tracking and predicting data trends across states is not linear, and that piecemeal, state-by-state legalization affects sales. This shows that brands in individual states are shaping the markets of those states. Had cannabis been federally legalized, it would be easier to notice more consistencies across consumer preferences. 

Headset predicts that sodas will continue to grow, as will mocktails. People are now getting into lower dose beverages, recognizing that it’s rare that people can consume a 100mg beverage in one sitting. 

While Headset was reluctant to name cannabis-infused beverages as an alcohol replacement, several data points such as lower doses and the rise in popularity of sodas show that cannabis-infused beverages are becoming part of social circles and scenes.

 


Video StaffJuly 22, 2019

9min34200

This interview was recorded on June 25, 2019, at the MJ Link Micro Investor conference in New York. 

Debra Borchardt, Editor-in-Chief, Green Market Report:

Dixie Brands Inc. (OTCPK:DXBRF) just got approved for Oklahoma, its sixth state. Joining me now is the CEO, Chuck Smith. So, very exciting, Oklahoma, your number six state and a pretty good patient population there, right?

Chuck Smith, CEO Dixie Brands:

It sure is, Debra. It’s about 130,000 patients, very broad qualifying conditions, so that makes it kind of perfect for a company like ours, has a very big product portfolio. We can really serve a lot of different patient needs with our existing product set.

Green Market Report

Your product, I have to say, it tastes good. That’s one of the issues that we have with beverages.

Chuck Smith

So, you could say it tastes great.

Green Market Report

Ok, it tastes great. So many of the cannabis beverages, they just make me cringe, and they taste awful, but your product doesn’t. It tastes good.

Chuck Smith

Well, thanks very much for that. I think all of our products taste really good, and that’s something we’re proud of, but that’s also why we’ve been around for nine years. Having nine years to actually perfect the formulations, understand how to work with the oil, understand how to bring the right kind of flavor profiles together in a great responsible way, but also attractive packaging, I think that’s a cornerstone of Dixie Brands. As we evolve, the consumer is demanding that too. We have to continue to evolve that technology to make sure that the products are consistent, reliable, and taste great in every single state that we market it to.

Green Market Report

You recently reported your earnings. Your revenue’s phenomenal. It was up 137%, so your sales are growing tremendously. I did want to ask you about your net losses, $6.6 million. Quite high. A lot of that was compensation, but to your point, you said the company’s been around for nine years. You just went public, so a lot of people put in a lot of hours to get this company to the point of going public, right?

Chuck Smith

Sure, but to be clear on the compensation, the number is a component of that, and this is the crazy thing, unfortunately, I guess, about being a public company. When we issue stock options to our employees, we actually have to capture the expense of those options. It doesn’t mean that the employees are out now driving Ferraris because they’re locked up for a three-year vesting schedule, but the company has to actually book that loss associated with those options that we gave. So, that’s really a non-cash expense, but it’s expense nonetheless that we’re going to do because we want to incent our employees through options to make them part of the company and owners and rowing the boat in the same direction that we all are towards success.

Green Market Report

I think that’s great that you’re able to explain that because for a lot of people, they see that, and they see that net loss number, and it’s frightening, but when you explain it like that, it’s like, “Oh, okay. All right,” so everybody’s getting like you said, an investment within the company, which creates a lot of stickiness with your employees.

Chuck Smith

We want the employees to share in the upside of the great growth this company is going to have and the great success. It’s been nine long years, and this hasn’t been an industry that’s easy for anyone. So, now that we’re in the public eye and have access to capital markets, I expect a great growth for the company and ultimately, a great success. Like any company that’s building, you’re going to have to make investments. Those investments sometimes drop to the bottom line as losses, but the reality is every investment we make now in infrastructure or people or our routes to market are all designed to generate revenue. We’re not spending a lot of time having to do things just to catch up to others in the market. I think our portfolio is broader and more established than anybody else in the industry.

Green Market Report

Beverages. It seems like everyone’s slapping CBD oil in their beverage, and that now, they’re a CBD drink. What are your thoughts on that?

Chuck Smith

We’ve been in the CBD business for three years ourselves. However, our focus has been on dietary supplement formatted products both for humans, Aceso Hemp, and in that case, we have a couple of different types of product formats including an effervescent powder, which is kind of like an Emergen-C if you’ve ever had one of those.

Green Market Report

Love Emergen-C.

Chuck Smith

It’s a great product, indication-specific, high efficacy. On the other side, we have a great company that we own called Therabis, which targets CBD wellness to pets, primarily dogs, and we just introduced our cat treat. We’re very comfortable with these products because we’ve built them, Debra, against FDA supplement standards. Even though the FDA, as of today, doesn’t allow CBD in food and hasn’t made a ruling on supplements, we’ve built them from day one against that stringent level of standards. Now, we don’t have a CBD water yet, and frankly, the FDA is not giving us much comfort that they’re going to allow mass-market distribution of CBD in water and food, and I think that’s yet to come. As we get more guidance and clarity on that, you could expect Dixie to be at the forefront of that.

Green Market Report

So you’ve gotten Oklahoma. Is your goal more state expansion?

Chuck Smith

Yes, so we had said at the beginning of the year that we were going to open up between four and six new states that would be adding to the four states that we already have. So, our goal is really in between eight and 10 new states. Oklahoma is our sixth. We expect to be releasing product there by September, so that’s a pretty fast turnaround. In Michigan, we announced that deal at the beginning of February and had the product on the shelf the end of March, so we know what we’re doing, we know how to get the product into the market. With Oklahoma as our sixth state, you could expect to see one or two more announcements here probably over the next 30 to 60 days. That’ll really bring us into that eighth state and growing territory.

Green Market Report

Fantastic. We will keep an eye on Dixie and Therabis for our good pets.


StaffJanuary 15, 2019
drink.jpg?fit=960%2C583&ssl=1

5min21032

Mainstream consumer goods companies continue to throw out their fears of the cannabis industry and instead are embracing all things CBD (cannabidiol.) Last week it was the shoe chain DSW (NYSE: DSW) that signed on with Green Growth Brands (CSE: GGB) to sell its CBD products in the shoe stores. Today Tilray announced it was going to work with Authentic Brands and provide the CBD for its over 50 brands of goods.

These companies are pursuing topicals for skin like foot creams, lip balms, and muscle rubs.  CBD beverages though also show great promise for big brand companies. Cannabis research company Brightfield Group said in 2019 to look to continued CBD growth in mainstream retailers and more CPG (consumer packaged goods) companies are entering the space.

The beverage company New Age’s announcement of plans for a new line of CBD-infused beverages – a reveal that caused stocks to surge 528% is a sign that CBD is banging down mainstream products doors said Brightfield.

The only problem is that CBD tastes, well, funky. It’s usually described as having a bitter, earthy taste that takes some getting used to. The key to getting CBD beverages accepted by mainstream consumers will is fixing for the taste problem.

Seattle-based Tarukino developed an emulsion technology called Sorse. that has solved for consistency and taste by encapsulating cannabinoids in a water-soluble form that is odorless, tasteless and dissolves in water.

“The cannabis beverage industry today consists of products that smell like cannabis, taste bad and have an effect onset that takes longer than 20minutes. Tarukino solves all these issues,” said CEO Howard Lee.

The company has teamed up with California-based Caliva to bring cannabis beverages to the market. Caliva already produces flower, pre-rolls, and vapes and is known for its wellness options. Its products focus on motivating the mind, steadying the body, and inspiring creativity. Now it’s tinctures and beverages will use Tarukino’s technology in an exclusive agreement.

“After extensive due diligence, we are confident that Tarukino is the right nano-emulsion technology company to partner with,” said Dennis O-Malley, Caliva’s CEO.

According to sales rankings this past summer from Headset, the Caliva ranked as a top brand across its three product categories: pre-roll, flower, and vaporizer. In the pre-rolled joint category, Caliva led the rankings in the top five slots with its House Doobies, Dogwalkers, Super Sessions, and Toasties. In the cannabis flower category, the top four spots belonged to Caliva as well, with the company’s breakout hit Reef Leaf taking the top slot.

“Our rankings have become a key indicator of quality and scale in California,” says Cy Scott, CEO of Headset. “The category, segment, brand, and product trends continue to tell the narrative of the growth in the California cannabis market, and looking at real-time sales data, Headset is identifying which companies are establishing themselves as the major brands as this market evolves into the world’s largest cannabis economy.”

The first beverages are expected to be available for purchase in the first quarter of 2019 in the San Jose store.

 


Anne-Marie FischerNovember 9, 2018
mood33.jpg?fit=750%2C600&ssl=1

7min46210

“Beverage companies are already placing bets on cannabis-infused beverages,” says Ryan Smith, CEO of LeafLink, and industry-leading B2B e-commerce platform, “They present an exciting new frontier.”

While places like Canada have started off slow in allowing regulated products into the market, places like California have an already thriving infused food and beverage market, with products like colas to infused drops to kombuchas to functional beverages flying off the shelves and into the hands of the health-conscious consumer.

A Notable Rise in Popularity

Infused-beverages sales in legal states are on the rise and are demonstrated by year over year results. Flowhub, a POS company, has indicated that beverage sales have increased 88% year over year from 2016 to 2017, with that trend seemingly continuing in 2018. When Flowhub compares data from the first half of 2018 against data from the second half of 2017, beverage sales have increased 18%.

According to LeafLink, these are the industry leading beverages:

  1. Pearl 20 Minis by Tarukino in California
  2. Sprig Lemon Tea 20mg CBD & Sprig Original 10mg THC by Sprig in California 
  3. Orange Kush Soda 10mg by Keef Cola by K.I.N.D. Concentrates in Arizona
  4. 100mg Passionfruit by HIGHDRATE by Evergreen Herbal in Washington
  5. “Yippee Ki-Yay” – High Energy Blend Drops by ZOOTS by Bronnor in Colorado
  6. “Waking Giant” – 10 mg (Sativa) by Mirth Provisions in Washington

“Purchasing trends on our platform have shown an accelerating shift toward branded, consistent products that resemble recognizable consumer packaged goods,” says Smith of the growth in popularity in cannabis-infused beverages. “They are incredibly discreet, hide the taste of cannabis well, and provide a fast-acting dosage without the guesswork of a typical edible,” adds Smith.

A Health-Conscious Driven Demand

Move over kombucha! As a representative for mood33, a cannabis-infused “functional beverage” herbal tonic company says, “We know that the modern consumer is actively searching for ways to reduce their alcohol consumption and the adverse effects that come with overconsumption, drunk driving, and hangovers.”

“Once consumers realize that cannabis can be consumed like an alcoholic beverage via products like mood33, we will see even more demand for cannabis beverages – as we expect the cannabis beverage category to consist of 20-25% of the overall market share within the next 5-7 years due to these developments and elements of market/category maturation,” mood33 adds.

The news has been rife with beverage companies eyeing the cannabis market, with the likes of Coca-Cola and now Pepsi moving in on the promises for infused beverages. Earlier this year, Constellation Brands (STZ) made a huge investment into Canopy Growth Corp (CGC) that Moody’s referred to as a speculative bet.

These investments and partnerships “have brought tremendous awareness to the nascent cannabis beverage category, and we predict every sophisticated cannabis company will have a cannabis beverage program in the coming years,” says mood33.

mood33 is hyper-focused on providing a cannabis beverage consumption experience for everyday people: the stressed-out soccer mom, the overworked professional, the sore runner, and the health & wellness/fitness maven.

The Global Future for Cannabis-Infused Beverages

The deals being made between cannabis and food and beverages industry big-wigs are something to pay attention to. While cannabis-infused beverages are not permitted in Canada’s legal market yet, these deals indicate that cannabis-infused beverages can have a global demand outside of established legal markets.

“There is great opportunity for the Canadian industry to offer a wider variety of products to serve patients and consumers with different preferences, while capitalizing financially,” says LeafLink’s Ryan Smith, “The demand for non-smokable product categories like beverages will only increase as long as people pursue the wellness benefits of cannabis.”

As for mood33’s plans, they want to see cannabis-infused beverages hit the mainstream: “we are eager to help develop a national framework where manufacturers and marketers can develop mainstream inspired, regulated cannabis food and beverage products that could one day sit on a Whole Foods shelf.”

 


Don't Miss This Week's Exclusive News

Our team will cultivate the cannabis industry’s critical news and deliver it directly to your inbox every Friday. Don't miss it. Subscribe Now.

We respect your privacy. See our privacy policy.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 3 hours

Rise & shine. It’s Merger Mania in the industry this beautiful $HEXO $CURLF @Curaleaf_Inc…

@GreenMarketRpt – 3 hours

$CCHWF They missed, but only by a smidge and the quarter was really solid. #Cannabisstocks…

Back to Top