The next frontier in cannabis consumption could be carbonated, and perhaps chugged from a familiar looking 12-ounce can. Although the product category is nascent and heavily restricted, big business is already bullish on bud-infused beverages.
Through what is currently a licensing agreement between New York-based cannabis company Acreage Holdings and Ontario-based Canopy Growth Corporation, a cannabis company that is nearly 40 percent owned by Chicago-based beverage company Constellation Brands, Acreage will soon be producing non-alcoholic cannabis beverages that contain THC from plants homegrown somewhere in Illinois and sold at its Nature’s Care dispensaries in Chicago’s West Loop and suburban Rolling Meadows. Acreage, through its subsidiary In Grown Farms, has an 80,000 square foot cultivation facility in Freeport, Illinois.
“We believe THC-infused beverages is a game-changing category for U.S. cannabis,” said Howard Schacter, vice president of communications for Acreage, which has an agreement in place to eventually be acquired by Canopy Growth Corporation. That complicated deal is contingent on if and when cannabis becomes federally legal, or to some degree less restricted, in the United States.
In the meantime, the politically connected company that includes former U.S. House Speaker John Boehner and former Canadian Prime Minister Brian Mulroney on its board of directors will continue to sell cannabis in the multiple states where it is licensed. The forthcoming Tweed Houndstooth and Soda will also be sold in its California locations.
“We are excited to bring best-in-class brands and products to the market, which we anticipate happening next summer,” Schacter said.
THC beverage market expected to triple by 2024
London-based cannabis market research firm Prohibition Partners estimates that combined cannabis beverage sales in the United States and Canada will reach nearly $2 billion in 2020 and nearly $6 billion by 2024. While consumers in more mature marijuana markets like Colorado, Nevada, and California are the most active buyers today, beer companies with global brands are betting on significantly wider demand.
Constellation, which makes Corona and Modelo, invested more than $4 billion for its stake in Canopy in 2018. While Canopy is still bleeding cash, branding partnerships with famous stoners like Seth Rogan could help it reach untapped markets. Petaluma-based Lagunitas Brewing Company, a subsidiary of Amsterdam-based Heineken International, sells Hi-Fi Hops in Colorado and California dispensaries.
Just yesterday, Milwaukee-based Pabst Brewing Company announced that it would lend its iconic “Blue Ribbon” name to a lemon-flavored THC-infused beverage to be sold initially in Southern California. But budget beer buyers should beware: A case of this stoney PBR will cost $120 before taxes.
Form factor may take some getting used to
Ann Keefner, a former Illinois sales director for Boston-based cannabis company Ascend Wellness Holdings and who also spent 11 years with Boston Beer Company, the brewer of Sam Adams, is skeptical about the potential of THC-infused beverages.
“I don’t believe in it,” she said, noting that dosing practices are far from standard.
“In the early days there was a cola beverage that was 20 ounces and had 100 milligrams,” of THC she said, a potency that could put the most experienced cannabis connoisseur on the couch indefinitely.
Beverages produced by larger companies have smaller amounts of THC, typically a more tolerable 2 to 5 milligrams. Still, given the highly personalized imbibement period of most cannabis users, as well as the generations-old practice of throwing back a few to watch the game, it’s unclear at what point consumption becomes too much too fast.
Beer and bud veteran Keefner says her operation will focus on cultivating and producing flower and oils, and let others go after the beverage market.
“It’s not in our model to sell any of that,” she said.