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Canada’s Cannabis Beverage Marketers Eye Expansion In 2021

January 4, 2021

It has been more than two years since recreational cannabis was legalized in Canada. According to Stats Canada, the market’s first 12 month period (October 2018-Sept. 2019) saw total online and retail sales of non-medical cannabis in the legal market hit C$908 million ($705m)—with Ontario (C$216.8 million), Alberta (C$195.7 million) and Quebec (C$194.9 million) as the top three provinces. Total retail sales for May-September 2020 alone exceeded that amount, reaching C$1.13 billion ($877m), and are growing steadily each month.

The so-called Cannabis 2.0, which began in late 2019, opened up the market to products like edibles, drinkables and vape cartridges, further expanding opportunities. Beverage companies in particular are eyeing the potential of the drinkables market as THC-infused beverages expand their presence in Canada. They’ll also soon have more widespread availability in the U.S. Two companies at the forefront of the Canadian drinkables market are Canopy Growth and Truss Beverage Co., which have accounted for nearly all of the nascent category this year.

According to Canopy, its portfolio of THC-infused beverages accounts for about 70% of the drinkables market, with labels including Tweed, Houseplant, Deep Space, and the newly released Quatreau, a CBD-infused sparkling water. “We’ve sold just over two million beverages into the boards and provinces year-to-date,” Canopy’s former global head of beverages Andrew Rapsey recently told SND. “For context, the entire THC beverage market in the U.S. was four million cans. Given that Canada’s population is about the size of California’s, that’s an incredibly encouraging stat for us.” (Rapsey subsequently announced he was leaving the company, to be replaced by former ConAgra executive Tara Rozalowsky, as Canopy’s vice president of beverages and edibles.) Canopy counts Houseplant (C$5 a 355-ml.) and Deep Space (C$8 a 255-ml.) among the its top-performing brands, and anticipates that it will be able to help double the market share of drinkables to 3%-6% moving forward.

Truss Beverage Co., another leading drinkables purveyor, is also underwritten by a major beverage supplier: Molson Coors. The brewer formed a joint venture with cannabis producer Hydropothecary Corp. (HEXO) in August 2018 to develop non-alcohol cannabis-infused beverages, taking a 57.5% controlling stake in Truss. “It’s been three months since launching our cannabis beverage portfolio, and in the past four weeks, our internal data platform indicates that we’ve achieved a 34% market share nationally. We see cannabis beverages as an entirely new beverage category that’s only just ramping up,” says Chaman Sandhu, Truss Beverage Co.’s marketing and digital lead. “As the national cannabis market also continues to evolve next year, we expect both consumer demand and various beverage offerings to increase substantially.” She notes that of the five Truss brands currently on the market, Mollo (C$5-C$6 a 355-ml.), House of Terpenes (C$8 a 355-ml.) and Little Victory (C$6-C$10 a 355-ml.) are generally the most popular, with more innovation in the pipeline for 2021.

“Right now, cannabis infused beverages represent only about 2% of total cannabis sales. Our focus is to make sure we secure availability of our products across Canada so we can connect consumers to this segment of the business,” says David Prodanovic, general manager, Kindred Canada at Breakthru, noting that Breakthru sees beverages as a critical point of entry to attract new consumers to the cannabis space.

The new category is in its infancy, which means that new labels from major suppliers will continue to roll in. Fluent Beverage Co., the joint venture between AB-InBev and Tilray, launched Everie, its first CBD-based beverage in Canada with .05mg THC in December of last year, with more THC-infused brands slated to follow.

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