Cannabis-infused beverages to be sold in state next summer
Illinoisans looking to drink their weed will soon have more cans to slide into their beverage fridge.
Canadian pot firm Canopy Growth, which is partly owned by beer and spirits company Constellation Brands, announced Thursday that its line of cannabisinfused beverages will be available in Illinois and California next summer. It has partnered with New Yorkbased Acreage Holdings, which holds cannabis manufacturing and retail licenses in multiple states, to make and distribute the product in the U.S.
The nonalcoholic beverages, currently sold in Canada, contain THC, the main psychoactive chemical in marijuana that produces the high feeling.
While Illinois dispensaries already sell some THCinfused beverages, the bigname backing of Canopy Growth’s line of drinks could help the products reach a larger pool of consumers and attract people looking for alternatives to alcoholic beverages.
The cannabis industry has high hopes for drinkable weed. The global cannabis drinks market is estimated to reach $2.8 billion by 2025, up from $1.2 billion this year, according to Grand View Research.
Canopy Growth says its cannabis formulations are “sessionable,” a term often used to describe easy-drinking, low-alcohol beers that can be consumed for extended periods. Many THC-products on the market have higher concentrations and aren’t meant to be consumed in their entirety in one sitting.
In a news release, the companies said they “look forward to bringing a sessionable infused beverage offering to U.S. consumers that will more closely liken itself to current beveragealcohol serving sizes.”
Acreage Holdings, which has an agreement to merge with Canopy Growth when federal legalization of marijuana occurs in the U.S. or other rules change to make it permissible, plans to sell the beverages in its own dispensaries and those operated by competitors. Acreage operates two Nature’s Care dispensaries in Illinois, one in Rolling Meadows and another on Chicago’s Randolph Street restaurant row, which opened this week.
THC products in any form can legally be sold only in licensed dispensaries.
Acreage intends to roll out the beverages across all markets where recreational marijuana use is legal, starting next summer in Illinois and California. Recreational marijuana use, permitted in 11 states, in January became legal in Illinois, which is “a huge growth market,” said
Howard Schacter, vice president of communications for Acreage.
Weed in drinkable form is regulated the same as other cannabis products. In Illinois, taxation is tiered according to the amount of THC and there are limits on the amount of THC you can purchase in a given day, said Michele Scott, a cannabis analyst with market research firm Mintel.
About 28% of U.S. consumers say they’ve tried cannabis-infused nonalcoholic beverages in the last year, but 44% are interested, Scott said. Lack of availability, options or variety could be reasons for the gap.
“I’d expect to see this number climb, especially as bigger brands get into the space and are producing high-quality products,” Scott said.
Canopy Growth said it has sold more than 1.7 million cans of its THCinfused beverages in Canada, where recreational weed use is legal nationally. Its Tweed brand includes the carbonated Houndstooth and Soda, which contains 2 milligrams of THC per serving and whose effects may be felt “in as little as 30 minutes,” its website said. Other drinks are based in tonic or ginger ale.
Constellation Brands, whose beer business is based in Chicago, made a big bet on cannabis when it bought a stake in Canopy Growth in 2017. The Corona parent this year increased its stake in the weed company to 38.6%.
Canopy Growth lost $124 million during the quarter ended Aug. 31, amounting to a $34 million loss for Constellation’s equity stake, the booze company said Thursday in announcing its second-quarter earnings. But Constellation said it is bullish on Canopy’s growth and believes cannabis beverages will be a key driver.
“We believe that beverages and other Rec 2.0 products will attract new consumers to the market and further drive conversion from the illicit market,” Constellation CEO William Newlands said on the earnings call.