Cannabis Beverages Might Not Be the Next Big Thing After All
Aurora CEO says the proven cannabis market is not in drinks.
From the outside looking in, the concept of THC-infused beverages was a shoo-in at becoming the next big trend in cannabis. Not only did it seem that every major beverage company from around the globe was looking to jump into the scene and rip off a piece of the action, but market analysts even came forward with reports that told the tale of riches to be had from the sale of stoner sips. Some also suggested that these drinks were for the cannabis consumer of tomorrow, and if cannabis companies weren’t selling drinkable weed in the foreseeable future, they would end up bankrupt and living under a bridge. However, that was last year. Although we have seen the addition of some THC-beverages showing up in the American market (Canada still can’t legally sell them until October) it almost seems that the hype has petered out and is fading away.
Some of the attrition in hoopla could be because cannabis companies are finding out that there just aren’t as many customers interested in sipping buds as they initially believed. To hear Aurora Cannabis CEO Terry Booth tell it, that’s precisely what has happened as far as his camp is concerned.
Earlier this week, Booth explained to analysts during an investment conference call that he and his people were starting to second-guess the enthusiasm for THC-infused beverages. Apparently, Booth just isn’t convinced — at least not anymore — that this is the direction the cannabis consumer is heading. “The proven market is certainly not in beverage,” he said, according to Yahoo Finance. “There are not going to be any cannabis bars like there are alcohol bars any time soon.”
This has not always been Booth’s opinion. You might remember that Aurora was taking meetings with several large beverage companies last year from Diageo Plc, maker of Crown Royal and Guinness Beer, right down to the queen mother of carbonated libations – Coca Cola. Or at least that was the rumor. The word on the street was that Coke was in “serious talks” with Aurora about creating a CBD-infused beverage, but almost as quickly as that news started to spread it was shut down by Coke’s top dog. CEO James Quincey said back in October of 2018 that the beverage company “doesn’t have any plans at this stage” to get involved with the cannabis industry.
But other beverage-cannabis partnerships have taken place over the past year, one of which is a huge deal. The first international brewing company to go balls deep into the idea of bringing cannabis beverages to life was the maker of Corona and Modelo, Constellation Brands. The company has invested billions of dollars with Canopy Growth to become one of the first to offer such a product on the Canadian market. The goal is to test THC-beverages in the northern nation and be one of the first to jump into the U.S. market once marijuana goes legal at the national level. There is now even a contingency deal in place with an American firm (Acreage Holding) that could also technically allow the brewer to become one of the largest cannabis-beer companies in the United States. Of course, all of this depends on Congressional enthusiasm for ending pot prohibition. And as far as we can tell, there isn’t much. But that’s another story for another time.
No, it’s true, there is no Corona of Cannabis yet – not even a nifty brand name or any indication of whether it is close to ready for market, or how it might taste.
In fact, flavoring seems to be a large part of the problem when it comes to producing THC-infused beverages. A report from the Wall Street Journal suggests that companies are struggling to make a weed drink that doesn’t taste awful, funky and in the not-so-pleasant ballpark of urine or soap. We can’t see there being a huge market for something like that. Another problem is creating a THC-infused beverage that is water-soluble so it can metabolize in a person’s system like alcohol. Otherwise, consumers might experience some of the panic moments that they have when consuming other cannabis edibles. So achieving a 10-minute onset time is the goal. The only problem is some of the chemicals needed to make cannabis drinks take effect quicker also contribute to the bad flavor. It’s almost as though the cannabis plant just doesn’t want to be liquified.
It could be all of these headaches associated with the production of cannabis beverages that has Aurora ready just to keep kicking it old school. For now, smoking is still the most popular form of consumption, so why mess with a good thing — right? But there are problems with smoking as well. A recent poll found that even some cannabis users are bothered when they catch a whiff of marijuana smoke in public. There is also the question of where stoned socialites might eventually go to partake. Are we going to establish consumption lounges all across the country like they’re doing in Vegas or is a more logical option to find a way to incorporate it in with the bar scene? These questions are far from being answered, and it remains to be seen how it will all shake out. There is no doubt that marijuana needs a social component for it to become as widely accepted in the same way as alcohol. And cannabis beverages seemed like the product that could take us there.
This is not the case, according to Booth and Aurora CCO Cam Battley. They say while there might be a customer base for wellness beverages — CBD-infused recovery drinks like Gatorade — there doesn’t seem to be much interest coming from the consumer public for getting high through the consumption of weed drinks. “On the intoxication side of the fence with respect to cannabis drinks, the market is just not there. It’s not proven to be a popular item anywhere,” Booth said.
Cannabis consumers are, however, still stoked about vapes and edibles, the two cannabis executives explained. But as far as investing resources getting into cannabis drinks, it’s just not worth it to them. “Considering the anticipated relatively low market share of these products, we are not rushing this,” Battley said.
TELL US, would you try a drink that was infused with THC?