Cannabis Drinks Cos. Say Their Time is (Finally) Here

Mark Faicol said an unlikely source convinced him that cannabis drinks could have massive market potential.

Faicol, who previously worked for beermaker Pabst Blue Ribbon (PBR), is the brand manager for the recently-formed Pabst Labs, an independent company that manufactures THC-infused seltzers under the licensed PBR name. Faicol said his mother, who spent 40-plus years working in the medical field, had never before shown an interest in experimenting with cannabis. When she saw one of the seltzers from Pabst Labs, though, she became intrigued.

“That’s when I truly believed there was definitely something here,” Faicol told WeedWeek on Thursday. “That really hit home.”

A lot of others apparently also believe in the potential of the infused-beverage market, which is projected to account for $2.8B in global sales by 2025, according to market research firm Grand View Research. The global market was valued at $174M just two years ago.

While infused beverages have been around for several years, they’ve mostly struggled to compete with other edibles, in part because of their difficulty to manufacture, their high prices and poor reviews on taste. Despite those challenges, some of which are being solved by science, operators are excited about an opportunity to innovate in what they see as a mostly untapped space. 

“Really, the possibilities are limitless,” LaToyia Rucker, president and founder of Michigan-based cannabis company Calyxeum, said this week during a National Cannabis Industry Association business summit. “It’s a billion-dollar industry and I think major and minor players are all going to try to get their hands in the pot. I’m really excited.”

‘Familiarity brings comfort’

There has already been significant investment in the THC-infused beverage marketplace.

Molson Coors, Anheuser-Busch and Constellation Brands, whose portfolio includes Corona and Modelo, are among several major beverage manufacturers that have invested millions of dollars into the industry in Canada, where cannabis is federally legal.

Faicol, with Pabst Labs, said that makes sense, given those companies’ expertise. No North American market has legalized products containing both alcohol and THC.

While Pabst Blue Ribbon is only licensing its name for the Pabst Labs seltzers and has no financial stake in them, Faicol noted that much of the Pabst Labs team has experience developing and innovating with PBR, which has been around since 1844. 

Having a major name like PBR in the space is a “game-changer,” Faicol said, adding that the PBR name and its history should help Pabst Labs connect with consumers. The Pabst Labs seltzers launched in California in October.

“Familiarity brings comfort,” he said. “I think people are going to be a lot more willing to try something new from a brand that they trust.”

Jamie Pearson, the president and CEO of Bhang Corporation, which sells a variety of cannabis and CBD products, suggested the infused-beverage market was primed to take off, particularly as scientific advancements improve the ability to better control taste and the onset time for drinkers to feel the effects of the THC or CBD.

“The future is in cannabis edibles and beverages,” she said.

Growing the market

Among the challenges with producing THC-infused beverages is that cannabis oil does not mix with water, so manufacturers must find the right recipe to come up with consistent taste and texture. They typically use emulsion technology to mix the substances and regulate their effects.

There are benefits to manufacturing infused beverages, as well. Perhaps chief among them is that consumers are already used to drinking in a variety of settings and won’t face the stigma-related concerns that can come with smoking or vaping.

Industry insiders seem to be mixed on whether future beverages will include both cannabis and alcohol.

Some don’t envision regulators ever allowing such a mix, particularly before more research has been done, while others see the pairing as a natural progression.

Yarrow Kubrin, the founder of Special Teams Consulting, falls in the latter camp.

“It seems to be two leisure activities that have been being paired by the populace irrespective of regulatory restrictions for a really long time and I do believe that once those restrictions are lifted, we probably will see hybrid products that do have alcohol in them,” he said while moderating the NCIA discussion. “I think the alcohol beverage companies aren’t just looking to have a supply chain play, I think they also think that at some point there might be cannabis-infused beer.”

Faicol, with Pabst Labs, said his company had no current plans to move in that direction, but his team would continue to monitor regulations to see “what happens in the next months and years to come.”

Before concerning himself with that, though, he said his focus will remain on helping to grow the current marketplace.

“We stand behind not only our product, but the space, and we’re looking to be hopefully the catalyst and the brand that really unlocks the potential in the category,” he said. “We’re happy to continue to grow the space along with the other players in it.”