Molson Coors and HEXO Launch CBD Beverages in Colorado
Move over, beer. CBD beverages are moving in.
Molson Coors Beverage Company recently announced that it is joining up with HEXO, a Canadian marijuana company, to bring nonalcoholic hemp-derived CBD beverages to the US market.
The joint venture, called Truss CBD USA, will help Molson Coors expand its reach beyond the beer aisle (and hopefully make up for falling sales in that market) by making a name for itself in the rapidly expanding CBD beverage space.
Truss CBD USA’s manufacturing plant will be based in Colorado, but the company hasn’t announced a date for when customers can expect to see their products hit store shelves. A statement released by Molson Coors and Hexo, though, has revealed that, in the short term at least, only residents of Colorado will have the chance to try them.
The decision to limit sales of their beverage to the state of Colorado may not seem to make much sense, but according to Pete Marino, Molson Coors president of emerging growth, the logic behind this choice has to do with the leadership the state has taken on CBD regulation:
“We chose Colorado because of its established regulatory framework for CBD and we plan to approach any opportunities in full alignment with our commitment to commercial responsibility, transparency, and compliance.”
The key words there are “transparency and compliance.”
Because the US Food and Drug Administration (FDA) has yet to agree on a comprehensive regulatory framework for CBD, it’s still unclear whether CBD will be allowed as an additive to food and beverages (in the US) in the future.
According to Zenith Global, US sales of cannabis-based drinks are rapidly achieving mass-market appeal and are expected to surge to over $1.4 billion in 2023 – and that’s with some regulatory restrictions remaining. So this is clearly a growth market.
The state of regulatory limbo, though, puts CBD companies in the tenuous position of investing in products that may be outlawed, or more strictly regulated, in the future. Because how do you comply with rules that haven’t been created yet?
Keeping the production and distribution of their CBD beverages within a state that has already ruled CBD to be a lawful additive to food and beverages allows Truss CBD USA to make their way into a lucrative market, without putting themselves at risk of losing a valuable investment.
Truss CBD USA is just the latest partnership of the two companies involving CBD beverages. The first, Ontario-based Truss Beverages, will soon bring cannabis-infused, nonalcoholic beverages to the Canadian market. This alliance forms the basis for the continuing partnership, according to Sebastien St-Louis, CEO and co-founder of HEXO:
“Molson Coors and HEXO have already built a great partnership in Canada that we believe will produce some of the best adult non-alcohol beverage brands in the Canadian market,” said St-Louis in a news release. “I am thrilled with the opportunity to bring those learnings to Colorado, under the leadership of Molson Coors, Powered by HEXO.”
So what form will these hotly awaited CBD beverages take? According to Marino, Truss CBD USA will leverage its Canadian counterpart’s lineup of CBD-infused beverages in the new joint venture in Colorado.
Truss Beverages has yet to announce a full list of its planned offerings, but the first of six planned products (still waiting to land on shelves in Canada) is Flow Glow, a sharply marketed CBD-infused spring water beverage.
According to product marketing, the company “takes pride in being specialists, and not generalists, who are focused on doing one thing and only one thing really well: creating the world’s best crafted cannabis beverages.”
If the first partnership is any indication, however, creating the world’s best CBD beverages can be a bumpy road.
Problems with both packaging and flavoring have caused major hiccups in Truss Beverages’ production plans and extended the release date for Flow Glow in Canada.
The recent discovery that aluminum cans can draw cannabinoids out of suspension in the liquid has created delays for several CBD beverage companies. And getting the flavor right has also apparently been a challenge.
Of course, the new, US-based joint venture will benefit from the experience gained from these early attempts, so there’s reason to hope that Colorado will see Truss CBD beverages hit the market with fewer snags to slow production.
For other states wanting to attract major ventures like this one, there’s another lesson to be learned. Having clearly defined regulations creates a safety net for CBD companies and is an investment magnet in an otherwise risky industry.