Molson Coors' CBD Drink Could Be A 'Stepping Stone' To THC

This article by Alex Halperin was originally published on WeedWeek, and appears here with permission.

Beer giant Molson Coors is launching a line of CBD-infused beverages in Colorado, making it perhaps the highest-profile company to enter the U.S. market for products containing the compound. This week’s announcement came days after Democrats won control of the U.S. Senate in the Georgia runoff elections, creating a business climate observers widely believe will be friendlier to cannabis.

The brand, Verywell, is launching under Truss CBD USA, a joint venture between Molson Coors and Canadian cannabis company Hexo. The sparkling beverage contains 20 mg of CBD, zero calories and will be available in three flavors. 

Twelve ounce cans will reportedly sell for $3.99. Verywell drinks containing both THC and CBD are already available in Canada. 

CBD was federally legalized along with hemp in the 2018 farm bill and is sold openly in many states and online. However, the U.S. Food and Drug Administration has not approved its use as an additive to foods and beverages, likely keeping many big retailers and consumer packaged goods players out of the market. 

Colorado regulates CBD as a food additive, which could contribute to perceptions that it is one of the less risky markets for a major company to launch a CBD product. 

“As legislation changes and the FDA starts to paint a clearer picture of what is and is not allowed, we are going to see many more moves like this be made in the U.S.,” said Madison Fiore, director of growth at marketing agency Hawke Media.   

Verywell’s arrival is more evidence that big companies have their eyes on the cannabis market. Josh Wand, CEO of ForceBrands, an executive recruitment platform for mainstream and cannabis brands, described the dynamic as “No one wants to be first and no one wants to be last.” 

Alcohol and tobacco companies, which have experience dealing with regulated products, are widely considered likely to be early entrants. 

Tobacco giant Altria, parent company of Marlboro, has quietly positioned itself in the space. Numerous additional global alcohol companies have established partnerships with cannabis players in Canada, where the plant is federally legal.

Rick Batenburg III, Chief Investment Officer of Colorado-based venture capital firm Cliintel Capital, sees the Verywell launch as primarily a “stepping stone” for Molson Coors to enter the American THC market. (Truss didn’t immediately return a request for comment.)

While CBD is now a multi-billion dollar market in the U.S., Batenburg is bearish on the compound. He called it cannabis’ “bastard child” due to its low barriers to entry, a too-subtle effect on consumers and insufficient differentiation between brands. 

CBD beverages are selling “poorly” Batenburg said, though he acknowledged Molson Coors has the resources and marketing know-how to potentially outperform competitors.

Read the original Article on WeedWeek.

Benzinga's Related Links: 

• Why The Drinks Market Will Be The Next Big Sector In Cannabis
• Joe Rogan Partners With Kill Cliff To Create Flaming Joe CBD Beverage
• Más de WeedWeek en español en El Planteo