With cannabis edibles, topicals, and extracts hitting the shelves in December 2019, Canada has a rare opportunity to become a leader in cannabis-infused beverages this Christmas season. Marijuana remains federally illegal in the United States, and the FDA has only just only begun exploring a “potential” framework for CBD in foods and drinks. Time is once again on the side of Canadian cannabis companies—but will they be able to execute, given the branding restrictions and the supply chain issues plaguing Canada’s cannabis industry?
Cannabis Companies Prepare For Cannabis-Infused Beverages In Canada
Despite limited news on cannabis-infused beverages in Canada thus far, the market for cannabis-infused beverages is expected to be significant. According to Deloitte, the Canadian market for cannabis-infused beverages is expected to be $529 million in its first year, while the U.S. market for cannabis, CBD, and hemp-infused drinks could grow to over $1.4 billion by 2024, according to global food and drink consulting firm Zenith Global.
Although these numbers pale in comparison to the amount Canadians spent on alcohol in 2017 (approximately 23.2 billion), it would be an impressive start for an industry still in its infancy.
While household names like Tilray and Canopy Growth have made headlines in the past regarding their activities in the cannabis-infused beverage space, it’s Truss—the joint-venture between Molson Coors Brewing Co. (NYSE: TAP) and HEXO Corp. (TSX: HEXO) (NYSE-A: HEXO)— that is most vocal about its intention to dominate cannabis-infused beverages in Canada.
Via BNN Bloomberg,
“Molson Coors Brewing Co.’s cannabis joint venture plan to start selling multiple types of pot beverages on Canadian shelves the first day they can legally be sold, though they won’t contain alcohol.
“Truss plans to offer everything from water to a ‘beer-like product’ and maybe even hot beverages. It has flexible production lines so it can pivot if one type of beverage isn’t selling, [Jay McMillan, Hexo’s vice president of strategic development] said.”
While it remains to be seen just how many cannabis-infused beverage SKU’s Truss and its competitors actually bring to market, one thing is for certain…
Generic packaging rules for products like cannabis-infused beverages will make it difficult for companies to stand out on a shelf.
Terry Donnelly, CEO of the Vancouver-based Hill Street Beverage Company, put it best when criticizing the packaging requirements for cannabis-infused beverages in Canada:
“If I was to come to your home and bring you a bottle of cannabis infused wine as a gift, do you want me to show up with that bottle of wine looking like toilet bowl cleanser or do you want it to look like a beautiful bottle of wine . . .”
Canada Is The Ultimate Proving Grounds For Cannabis-Infused Beverages
Canada’s regulatory agility has once again provided Canadian companies with an opportunity to become a leader in the global cannabis industry. It is now up to Canadian cannabis companies (ie. Tilray, Canopy Growth, HEXO, and others) to create cannabis-infused beverages that resonate with Canadian consumers based on their quality, not their packaging. Companies that manage to do so are not only likely to dominate cannabis-infused beverages in Canada, but anywhere else in the world as well.