Original cannabis journalism for Canadians

What will it take to make cannabis beverages popular?

New regulations permitting the production of cannabis-infused beverages will come into effect later in 2019. (Cole Burston / Bloomberg files)

New regulations permitting the production of cannabis-infused beverages will come into effect later in 2019. (Cole Burston / Bloomberg files)

Cannabis-infused drinks have captured headlines in recent months, and it's easy to see why. Smoking or vaporizing cannabis is unappealing to many, but potable pot is accessible to people who are already comfortable with more popular drugs that come in liquid form, such as alcohol or caffeine.

But market data suggests cannabis beverages are currently a niche product, and existing cannabis consumers appear to mostly ignore them. (Investment analyst Jeff Khoshaba neatly explains the relative unpopularity of cannabis beverages in legal U.S. markets in this Twitter thread, describing them as "a gimmick in the eyes of the overwhelming majority of cannabis consumers.")

Here in Canada, a 2018 federal survey found that cannabis beverages were the least used cannabis products among respondents who used cannabis in the past year — just four per cent reported quaffing a cannabis drink. (Those numbers might go up later this year, when cannabis beverages will become legal for sale in Canada.)

Hill Street Beverage Co. chairman and CEO Terry Donnelly is betting that his company's future cannabis drinks can do better. Hill Street, which makes alcohol-free wine and beer, is one of the ten founding members of the Cannabis Beverage Producers Alliance, a new industry group for Canadian cannabis beverage manufacturers and ancillary companies.

Cannabis beverages for sale in the legal U.S. market are still a novelty because the technology to create the beverages is still being developed, Donnelly said in an interview.

"Nobody wants to drink a beverage, have it affect them two hours later, and then have it last for 24 hours," he said.

But new technology from Lexaria Bioscience, licensed by Hill Street and others, promises to make drinkable cannabis water-soluble so it performs less like edible cannabis and more like alcohol.

Donnelly says the technology works as advertised.

"I think what we want to do is give consumers a beverage… that tastes great, so that's the first thing, and then second, that mirrors the kind of social experience that we're used to."

Of course, the proof will be in the pudding. If Hill Street and others can successfully mass-produce tasty, alcohol-like cannabis beverages, perhaps consumers will change their minds about cannabis drinks.

But Donnelly is concerned that Ottawa's draft regulations for cannabis-infused food and drinks could stand in the way of mass-market success for Canada's cannabis beverage manufacturers. Among other things, those regulations would prevent cannabis beverages producers from branding their products using alcohol-related terms such as "beer" or "wine".

"We're going to have to invent an entirely new nomenclature to educate the whole population of Canada on safe consumption practices, with an entirely new set of words, if we can't use alcohol-related terms to describe our products," Donnelly said.

"How do I describe the difference between a cannabis-infused cabernet sauvignon and a cannabis-infused merlot?"

Strict proposed packaging regulations for cannabis beverages are also of concern to manufacturers, Donnelly said.

"Alcoholic beverages, generally speaking, already come in standard sizes, formats that consumers are very accustomed to. And we're hearing, from these regulations, a whole new set of shapes and sizes that don't align with our cultural norms," he said, pointing to things such as using child-proof containers instead of normal cans or bottles as an example.

The Cannabis Beverage Producers Alliance plans to use strength in numbers to lobby the government to rethink those regulations, Donnelly said.

"We share the same mandate (as government)," he said. "We want a safe industry for consumers, that's what we aspire to create, and we want to displace the black market."

Update: Clarifies date when cannabis beverages will be legal for sale in Canada.

Correction: Corrects number of members of the Cannabis Beverage Producers Alliance.


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Elsewhere on the Weed Wide Web

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  • Failure to deliver: The Ontario Cannabis Store's parent agency put out a tantalizing tender for same-day cannabis delivery couriers — and then cancelled it.

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