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The Beverage Industry Bets Big on Cannabis-Infused Creations
By: Fast Company
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As the cannabis industry continues to go more mainstream, entrepreneurs are on the lookout for the next niche market. Edibles have been done every which way, CBD-infused lotions and body care products are now touted by the likes of Kathy Ireland and Meryl Streep, and even “King of Instagram” Dan Bilzerian has a vape line.


So, what remains?


“Consuming CBD through oils, gummies, or tinctures isn’t ideal for daily life,” explains Benjamin Witte,  founder of Recess, a CBD and “adaptogen-infused” sparkling water company. “There was a massive opportunity to bring CBD and adaptogens to new product formats, primarily functional beverages.”


CBD oil (or cannabidiol), unlike THC, does not contain any psychoactive properties. The extract has been used for years for anything from arthritis pain management to anxiety relief and insomnia cure.


Recess, which comes in fun fruity flavors like peach and pomegranate citrus, contains 10 milligrams of the cannabis extract known for reducing stress and inducing a Zen-like feeling. Basically, it’s a more relaxing version of La Croix, if your seltzer habit ran you $4.99 per can. It even arrives in beautifully designed pastel hues that fit right alongside your Pamplemousse in the fridge.


Much like its name, Recess is all about taking a break during one’s day to reset and rebalance with CBD, to “help us adapt to stress, and focus,” says Witte via email. “It’s what we wish that 2 p.m. coffee would do for us.”


 

The new company is not the only one of its kind, but its herbal focus will likely draw the health and wellness set that has embraced the trend. Dirty Lemon, a functional beverage brand that’s become an Instagram sensation, combines fruit juices with CBD for a “mild euphoria.” A Dirty Lemon rep reports that its first production run of 12,000 bottles sold out in just two days in June. Since the launch of its CBD line, the company acquired more new customers than any other product to date, with new customer growth 60% higher than any other product launch.


Several breweries, including Lagunitas and Blue Moon creator Keith Villa, have also announced weed-based beverages. In August, Constellation Brands (Svedka vodka, Corona) invested $4 billion in cannabis producer Canopy Growth, less than a year after taking a 10%  stake to develop a line of nonalcoholic, cannabis-infused drinks.


Even Coca Cola reportedly wants in.


“Explosive source of revenue”


“I think a lot of both the emerging and established food and beverage companies see CBD as a potentially explosive source of revenue as the next great functional ingredient,” explains Jeff Klineman, editor-in-chief of BevNET.com, “while THC’s strengths are largely viewed through a recreational lens.”


While CBD seems the more obvious choice for wider consumer consumption, other brands see greater potential in the dispensary market, where THC accounts for 90% of all sales. (THC, otherwise known as tetrahydrocannabinol, is the chemical compound in cannabis responsible for getting one high.)


The THC beverage market is predicted to grow, says Kleinman, but the sector has its challenges. These companies need to adequately tweak and communicate the level of concentration in each bottle, as well as attest to some sort of consistency across the market–similar to alcoholic “proof,” only for psychoactive components. Currently, the average shopper has no idea what consumption of a 12-ounce can means in terms of how “euphoric” or relaxed they’ll feel.


“Intensity is one barrier,” says Kleinman. “The other issues are less format-driven and more environmental–how will the regulatory side impact consumption patterns? How about retail? Can these products be served in a bar? In a cannabis-only bar? These questions will have a lot of influence over the final predominant format for product usage.”


This past summer, Eric Schnell of Beyond Brands cofounded Mood33, a sparkling spiked tonic that retails for $8. A little more luxe than its competitors, the “better-for-you” line combines sophisticated flavors like green tea, dried lemon peel, and rose hibiscus flowers. There are three distinct flavors centered around moods (Joy, Passion, and Calm), each with varying degrees of both THC and CBD.


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This article was published on Fast Company. A link to the original piece appears after the post. www.fastcompany.com
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