Tapping into pot
Brewers get ready for green light on cannabis-infused drinks
Could a taste for pot-infused drinks mean Canadians sip less beer?
With an October deadline for legalizing cannabisinfused drinks and food, brewers aren’t taking any chances.
Across the country, brewing companies ranging from corporate giants such as MolsonCoors to smaller craft brewers such as Toronto’s Cool Brewing and Hamilton’s Collective Arts Brewing are dipping their toes into the pot water. To those brewers, fending off potential new competition simply makes good business sense.
“If you’re looking at buying a recreational beverage, you could choose beer, wine or spirits or coolers. Or you could choose something infused with cannabis. You’re fighting for share of stomach,” said Kevin
Meens, head of corporate development at Cool. The Etobicoke-based brewery has already been making hemp-infused Millenium Buzz beer for years. Now, though, they’ve applied to Health Canada for a licence to extract THC and CBD oils from dried pot plants, which they’d then be able to infuse into drinks.
Whatever those drinks are, however, they wouldn’t contain any alcohol; mixing booze and pot will still be a no-no come October. That means the drinks produced could be anything from fruit juice-based concoctions to de-alcoholized beer.
“I think the category is going to be leaning more toward flavoured beverages. I don’t know how much of it will be beer infused with cannabis. It will be a part of the market, but how big? I don’t know,” Meens said.
Just how big the overall market will be is also up in the air, as is who the customers will be. Big brewing companies are entering the market in an era when their traditional mainstay brands have seen market shares sliding for years. Craft breweries might be better positioned to take advantage of the new opportunity, Queen’s University marketing professor Ken Wong says. Wong suspects cannabis drink consumers will be a lot more like craft beer consumers than people who drink big brewery products.
“People want to know where things come from. There are all sorts of different varieties. That really plays more into the hands of craft brewers than the big ones. There are significant diseconomies of scale in this sector,” Wong said. “Big brewers have to sell the same product across the country.”
While waiting for the green light for their extraction licence, the team at Cool — and other brewers — are keeping an eye on proposed amendments to Health Canada’s cannabis regulations. Public and industry feedback on the amendments closes Feb. 20, but the exact date when the final regulations will be unveiled isn’t known. Among the biggest concerns? A proposed amendment that would mean food and drink companies couldn’t use their existing facilities to produce cannabis edibles or drinks, unless it was in an entirely separate building. Health Canada says that amendment is aimed at preventing cross-contamination of regular food with cannabis, as well as preventing food and cannabis spoilage. But brewers warn it would make things prohibitively expensive for smaller companies.
“If this requirement stays, it would mean that big multinational companies will dominate this space, and I don’t think that should happen,” said Matt Johnston, co-founder of Collective Arts, which earlier this month announced it had applied for a license to produce and sell cannabis-infused drinks under a new sister company called Collective Project Limited.
While he didn’t explicitly say Collective Arts wouldn’t go ahead with the project if the requirement stays, Johnston said it would “significantly increase” the potential cost of the new venture if they needed to build a separate facility.
There are technical challenges, as well, for brewers getting into cannabis beverages. For instance, trying to get the drink’s effect not take quite so long to deliver, said Cool’s Meens.
“When you have an alcoholic beverage, it starts to affect you in 15 or 20 minutes. With an infused cannabis beverage or edible, it can take 45 minutes or an hour,” Meens said.