Canopy Growth CEO Bruce Linton On The Future Of Cannabis BeveragesFebruary 5, 2019
Smiths Falls, Ontario-based cannabis producer Canopy Growth Corp. has catapulted to prominence since Constellation Brands took its initial stake in the company in October 2017. With Constellation now holding a 37% interest in Canopy via a $4 billion investment completed last year, the two partners are busy developing cannabis-infused beverages, intending to have them ready for launch when edibles and drinkables go legal in Canada later this year. In the nine months through September, which ended before Canada’s recreational rollout on October 17, Canopy’s sales grew nearly 50% to C$72 million ($55m).
Canopy founder, chairman, and CEO Bruce Linton tells SND that Canopy and Constellation have their beverage concept ready to go and are currently building a bottling plant. The cannabis drinks are expected to roll out under Canopy’s flagship Tweed brand—which also offers dried flower and gel cap cannabis products—and will have varying effects, from uplifting to relaxing, depending on the occasion. Linton envisions a future in which consumers can visit a bar and have a “Tweed and Tonic.”
“Constellation has been very helpful in how to think about making a bottled beverage that’s elegant and thoughtful,” Linton says. “We have, on a combined basis, a great product and brand targeting the right segments.”
The cannabis beverages that have begun to come to market in legal states in the U.S. tend to have about 10 milligrams of active ingredients, Linton notes. “That’s quite a lot of cannabis,” he says. “We’ve spent a lot of time thinking about how to make a beverage that’s clear, is zero-calorie, has managed flavors and taste, and has a low dose with a rapid onset so that people can have a second one if they choose.”
Speaking to the topic of market dynamics in the early days of Canada’s recreational cannabis category, Linton says he expects the retail landscape to expand and solidify looking ahead. Initially, it’s been an uneven retail rollout across the country, with some provinces like Alberta opening dozens of outlets and others like British Columbia and Quebec opening only a few.
“By late 2020, I think there will be a few hundred stores built out,” Linton predicts. That will increase points of availability, but more importantly it will provide more opportunities to educate the consumer, he explains. “Right now, what we’re seeing in the product mix is that we’re going from dried cannabis flower to the Canadian version of the cannabis gummy bear—our gel caps. They have a uniform dosage from 2.5 to 10 milligrams. That sort of product is in more demand because it doesn’t involve smoking,” he says.
Regarding the supply shortages that have been reported across various Canadian provinces since legalization, Linton says Canopy is ramping up its output. “We’re seeing no let-up in demand,” he observes. “We’ve had people working seven days a week in fulfillment and packing—three shifts for 24 hours a day continuously since late September. We’re trying to support the physical stores more than the online channel, because that’s where you have the opportunity to educate the purchaser.”
Linton will be among the speakers at the 43rd Annual Impact Marketing Seminar, to be held March 7 at the Pierre Hotel in New York City. Limited tickets are still available.—Daniel Marsteller & Mary Keefe
|LEADING CANNABIS COMPANIES—Revenues and Updated Share Prices|
(millions of Canadian dollars)
(billions of U.S. dollars)
|1 Revenues for the 9 months ending September 30, except for Aphria (9 months ending November 30) and Hydropothecary (9 months ending October 31)
2 Revenues converted from U.S. to Canadian dollars. Source: IMPACT DATABANK