What's up with weed beverages?

Pour one out for your buds.

The Broccoli Report 
Monday, January 11, 2020
Time to read: 7 minutes, 24 seconds. 1482 words.

Good morning!

Everyone talks a big game at the start of the year—bold resolutions (“cutting down” on my cat’s snacks and my midday flower intake), ambitious goals (20k Broccoli Report subscribers!), and grandiose projections for the months to come (interstate commerce could happen before federal legalization). We’re going to talk about one of those projections today: whether or not weed beverages are on track to become the next big thing and what’s happening now in the drinkable weed space. 

I’m particularly excited about this Friday’s newsletter: a roundtable of four brands and content creators talking candidly about how they do social media. From the nuts and bolts of working with an agency to influencer seeding and what it takes to pull off everything yourself, each perspective taught me something new about the myths (and ugly, algorithmic truths) of digital engagement. If you aren’t already, become a paid subscriber to receive all our dispatches.

Drinking Buds: Investigating the buzz around weed beverages.

Right now, my inbox is packed with press release subject lines like, “Are Cannabis Beverages The Next New Thing?” and “2021: The Year of The Cannabis Beverage.” These emails include links to analysts supporting the claims with impressive projections showing the weed beverage segment reaching $2.8 billion per year by 2025. The slew of celebs investing in Cann and the Pabst Blue Ribbon cannabis-infused seltzer back it up, too, in their own way. 

However, when you look at the data, I’m not so sure that it’ll be that easy.

In Headset’s most recent industry report on consumer habits (with data from participating retailers in California and Washington that includes 500,000 products), beverages represent a mere 1–2% of overall cannabis sales. Tinctures are more popular in every consumer demographic. 

THC beverages have a tricky form factor. It’s one thing to divvy up a brownie or gummy, but it’s something else to try and measure smaller amounts of a liquid that may or may not have its cannabis content equally distributed throughout. Take Calexo, a delicious carbonated drink hailing from California. The 22 oz. bottle contains 10mg of THC, so when I poured a shot-glass sized amount for a friend with a very low tolerance, I couldn’t imagine they’d feel more than 1mg. They felt way more than that; they got uncomfortably high. Maybe I should’ve shaken it up longer before pouring; maybe the testing was flawed—in any case, self-dosing is nerve-wracking when it comes to the least familiar form of cannabis edible. 

I can more easily wrap my head around the low-risk, CBD-side of things. Still, it’s going to take damn good branding to make up for the cost difference between, say, enjoying a $7 single-serving Vybes versus putting a few drops from a bottle of CBD tincture into a month’s worth of tasty beverages. Ian Monat, the CEO and founder of Rhythm CBD Seltzers, left the wine industry for the hemp space. In a December press release, he talked up the sector’s potential:

“The $2 billion hard seltzer boom indicates the desire for a ‘lighter’ beverage with unique flavor profiles. Some new hard seltzer products even contain functional ingredients like antioxidants, meaning consumers are looking for added health benefits in their beverages, even alcoholic beverages. To that end, in 2021 I foresee more CBD seltzers being merchandised alongside the kombucha and other wellness or anti-inflammatory products on the shelf.”

I’m inclined to agree. But for THC drinkables, it’s more complicated. Our bodies digest them as edibles, which makes it hard for them to serve as a one-for-one substitute for an alcoholic beverage. To compete with alcohol, weed drinks need to hit faster so that people feel the effects more quickly, and they need to include options that can be drunk in quantity. Session IPAs are designed with a lower alcohol content so that people can enjoy drinking more than one or two during a leisurely afternoon, and it would be cool to see a cannabis drink that allowed for this type of consumption. As last week’s paid subscriber newsletter pointed out, there is demand for low-dose THC that remains to be served—low-dose drinkables could be well-positioned to capture some of that market.

Besides opportunities in product development, I think the sector’s growth in 2021 will depend on consumption lounges reopening and getting established in newly legal states, as well as whether the “Cali sober” phenomenon of a more-weed, less-alcohol lifestyle continues to build momentum. I’m not sure that cannabis beverages will eat into the market share of edibles or flower all that drastically this year, but I can say that drinkable weed and hemp is a very exciting, innovative space to explore right now.

Here are some current highlights:

  • Low-dose sparkling waters are a big, saturated part of this market. From adult-use (THC-touching) brands like Cann and the Delta-8 THC Wunder to CBD versions from brands like Fountain, Mad Tasty, and Recess, you can find cannabinoid-infused seltzers in about every flavor combination imaginable. Their popularity parallels twenty-somethings’ love affair with hard seltzers like White Claw.

  • A company called Aqua Vitea makes a 25mg CBD kombucha, and House of Saka is cornering the nonalcoholic, weed-infused wine market. I’m still not sure who exactly populates that market, but I do think it’s a cool option for those trying to curb alcohol habits. 

  • The “CBD spirit” approach of brands like Aplós is very interesting, treating these concentrated liquids as liqueurs you add small amounts of to cocktails or any beverage. With happy hours continuing to take place at home, these kinds of ceremonious beverages can give consumers a little taste of the adventures in libation they’re missing more than ever.

  • ALT liquid THC boiled things down to the purest form: literally just a small vial of what looks like THC water (but tastes slightly metallic), with a 1mg cap for the 5mg vials and 2mg cap for the 10mg vials to help you measure each dose. Easy to dose, but the taste is hard to hide unless you bury it in something strong.

  • Offfield pre-workout supplements are an intriguing reminder that drinkable products need not be liquid. The company’s “plant enhanced drink mix” contains CBD, CBG, and other minerals and vitamins that can be mixed into your water bottle like a powder formula supplement. 

  • Although the wellness-oriented can always drop CBD tincture into their tea, not everyone loves the flavor or texture of oil in their tea. Brands like Good Company Tea, Empress Tea, Lagom Teas, and even beauty brand Frigg have worked out ways to infuse the herbs or tea bag itself, offering a true CBD tea experience. With mainstream brand Traditional Medicinals’ new line of hemp-infused tea launching last year, I imagine more tea launches are on the way in 2021.

  • Same goes for CBD coffee. Willie Nelson’s brand Willie’s Remedy, Buddha Beans, and Green Roads sell classic bags of beans, but it’s shocking that we haven’t seen a bigger coffee roaster release a CBD-infused offering. Perhaps we will this year. Sträva gets points for meeting customers where they're at with Keurig and Nespresso-friendly options for their infused ground beans, but demerits for doing so via lots of single-source plastic. The single biggest concern for future entrants to the CBD coffee game is finding a name that can compete with that of the cold brew brand, Mary Joe.

One-Hitters: Cannabis News at a Glance

  • Florida’s medical marijuana market turned out to be the nation’s fourth-largest cannabis market by the end of 2020. With more than $1.2 billion in sales, the state trailed only top adult-use states California, Colorado, and Washington. 

  • A setback in New Jersey: sponsors of two bills designed to implement cannabis legalization and decriminalize possession have withdrawn their support, citing problems with proposed amendments. State Assemblyman Jamel Holley, who sponsored the legalization bill, explained the dramatic reversal this way: 

“In the 11th hour, the governor has proposed legislation that will disproportionately and unfairly hurt communities of color. The governor can’t hold legislation hostage in an effort to further target over-policed communities and place a de facto tax on poor people whose children may suffer from drug abuse and addiction. This proposal is regressive, draconian and ethically perverse.” 

  • Missouri Rep. Shamed Dogan has filed legislation that would place an adult-use cannabis legalization measure on the state’s 2022 ballot. The measure also directs the state to release anyone incarcerated for “non-violent, marijuana-only offenses that are no longer illegal in the state of Missouri,” and it would require that courts expunge all related civil and criminal records within 60 days of the ballot’s passage.

  • The CDC released updated literature on the dangers of driving impaired. If you follow the fine print to their methods of enforcement, you’ll see the most recent document outlining how to detect marijuana use (2015) cited describes the most notable effects in this order: “tremors, incomplete thoughts, marijuana odor.” 

Off to think incompletely.
Lauren Yoshiko