Big Beer and crafty entrepreneurs work to expand their reach into the next functional fad: hemp-infused beverages.
As a non-psychoactive alternative to its federally illegal counterpart known as THC, CBD has been adopted by the wellness industry in the form of lotions, tinctures, and gummies. The rapidly increasing availability of CBD products paired with the growing health trend in the US has opened minds to hemp products – and space for their sale in the beverage industry.
Renown for its health benefits, CBD enthusiasts tout the substance’s ability to reduce anxiety, aid in sleep, and alleviate pain and inflammation.
Could it be that CBD spritzers and sodas replace alcoholic drinks as a functional favorite? Not so fast. But entrepreneurs and big beer companies alike are finding opportunities in the booming CBD market.
Marcus Charles, CEO, and owner of cleen:craft, a CBD beverage startup, sees a trend. “If you look at the number of drinks sold, the next generation of folks, they just don’t drink as much,” he told SIP Northwest.
In fact, The Wall Street Journal reports that U.S. consumption of alcohol dropped by 0.7 in 2017 and an additional 0.8 percent in 2018.
Add those stats to fact that industry analysts estimate that the CBD category will grow into a $1 billion market by 2020 – $600 million of which is thanks to CBD beverages – and it becomes clear why large and small companies alike are hopping in.
Big Beer Reaches for Canna-Beverages
While soft drink companies like Coca-Cola and Pepsi are hesitant to attach their names to adult-oriented beverages, big beer companies are eagerly making their move.
Last year, Anheuser-Busch, makers of Budweiser, Busch, and a host of other alcoholic products, announced they were teaming up with Canadian medical marijuana company Tilray to research hemp-infused products. Notably, the beverages would be non-alcoholic as the mixing of the two substances is currently prohibited by law.
Citing increased demand for nonalcoholic beverages, Coors jumped at the opportunity to fill the niche. A Coors subsidiary called Apothecary Dram stocked a nonalcoholic CBD infused soda on its shelf in Denver. Dubbed Colorado’s Best Drinks (CBD for short), the beer behemoth is offering CBD-infused root beer and cherry cola flavors to start.
Conveniently located California brewery Lagunitas upped the ante by creating a CBD and THC beverage they dubbed Hi-Fi Hops, available in its home state and Colorado, 2 out of the 10 states where recreational marijuana is legal.
And Constellation Brands, owners of Corona and Svedka, struck a $4 billion deal with Canadian hemp company Canopy Growth, which has been granted a permit to grow and produce hemp products by New York state.
Challenges Bubbling Up
As an emerging industry, the hemp-infused beverage sector is not without its challenges.
Most notably, CBD is not water-soluble, oil and water don’t mix. This means that the creation of CBD-infused beverages that are truly effective requires an extra step. Companies need to use a binding agent so ingested CBD has the same effect when consumed sublingually.
The second challenge is navigating the hazy and constantly evolving legality of CBD-infused products. The Alcohol and Tobacco Tax and Trade Bureau has recently announced a process for getting hemp-infused drink products and labeling approved. If not followed, they may face a cease and desist, as Invasive Species Brewing did when launching its craft beer infused with cannabis terpenes oil.
“Tee Corley graduated with a degree in Humanities & Culture from Hampshire College in 2012. Since then, she’s written professionally for B2B marketing agencies, online publications, and contributed articles to best-selling books. She is curious, adventurous, and ambitious. With an apparent inability to accept how people “should” behave in society, she has thru-hiked two long-distance trails and continues to travel as much as possible.”