‘Set to explode’: Cannabis-infused drinks step into the spotlight

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Interest in cannabis-infused drinks continues to fizz in the wake of the Coca-Cola Company’s announcement that it may consider adding cannabidiol (CBD), the non-psychoactive chemical found in cannabis plants, to drinks.

CBD, which may be 2018’s trendiest ingredient, is already used in dozens of wellness products, including beverages. But when a multinational corporation expresses interest in spreading CBD drinks to the masses, the reverberations can rock investment groups, stock prices and other beverage companies, even weeks later.

Happy Apple is a cannabis-infused apple cider made by Tarukino. (Courtesy photo)

“When you see the big CBG (finance and business) companies getting involved, their vision is that laws are going to continue to evolve and change in a manner favorable to cannabis products,” said Scott Riefler, vice president of science at Tarukino, a Seattle-based beverages and edibles company. “It brings a lot of energy to the space and validation of shifts in social norms and social standards.”

Tarukino makes products infused with both THC, the well-known psychoactive cannabinoid found in cannabis plants, and CBD. It’s just one of nearly a dozen cannabis companies already serving up specialty drinks. The company has a partner in California that will launch their drinks in the Golden State by early 2019. In Washington State, Oleo makes a CBD powder that can be dissolved into water.

California, the world’s largest cannabis market, has seen rapid expansion in the cannabis-infused drinks market.

Sprig sells THC and CBD infused sparkling drinks; Kikoko blends organic teas with CBD; Cannawine infused CBD into wine; CBD Living Water uses tech to enhance its water; and Kickback cold brews CBD teas and coffees. Humboldt Distillery recently announced its holiday drinks lineup includes a vodka infused with locally grown cannabis sativa.

Lagunitas Hi-Fi Hops brand, launched in June 2018, is a joint product by Petaluma-based Lagunitas Brewing and Santa Rosa-based CannaCraft. (Lagunitas Brewing)

In June, Lagunitas Brewing Co. announced the release of Hi-Fi Hops, a cannabis-infused hoppy beverage. The drink, which comes in CBD and THC varieties, is sold only at licensed dispensaries.

Perhaps the noisiest entry into the cannabis-infused drinks market came from Colorado-based New Age Beverages, which is reportedly set to launch a national rollout of cannabis infused drinks.

Even in the era of legalization, questions about the legality of adding cannabis compounds to edible products persists. In July, a memo released by California lawmakers made it clear that CBD oil derived from hemp could not legally be added to food for humans or pets. Cannabis proponents say this type of regulation is misguided and based on a poor understanding of CBD’s effects.

“It has been misunderstood and shouldn’t be classified as it is. It is 100 percent safe,” Saul Kaye, chief executive of iCAN Israel-Cannabis, a pharmaceutical company that invests in cannabis products and solutions, told Emerald Report over the summer. “CBD is more like a wellness product today than a pharmaceutical. It’s going to be the next additive in everything. Just like Omega 3 or Vitamin D. It’s going to be in everything.”

In September, the DEA moved some CBD medicines off Schedule 1, the most restrictive category for controlled substances. It was the first time the agency has acknowledged the medicinal benefit of a cannabis compound.

“CBD is growing faster than cannabis in the U.S. and will soon be a $22 billion industry. It’s been flying under the radar but is set to explode, having profound impacts on consumer packaged goods and pharma,” said Brightfield Group.

This file photo shows GW Pharmaceuticals’ Epidiolex, a medicine made from the cannabis plant but without THC. (AP Photo/Kathy Young, File)

The FDA hasn’t approved any CBD products beyond epilepsy drug Epidiolex. But some cannabis and financial experts believe that with state laws shifting, CBD will further impact the markets.

“It is no secret that we view the infused-beverage vertical as a major disruptor within the cannabis sector,” Danny Brody, VP of Investor Relations of The Green Organic Dutchman Holdings told Money Morning. “Soda sales are on the decline; beverage giants will be looking to diversify, de-risk, and enter this key market segment at an accelerated pace.”

Moreover, the social tide around CBD changed rapidly and cannabis-infused drinks are entering the mainstream spotlight. When these drinks hit supermarket or liquor store shelves, they will truly become part of the culture.

Riefler at Tarukino says he sees a day – not too far from now – when folks will pass over a cold beer and grab a CBD or THC drink instead.

“Think about the BBQ culture or an afternoon where people traditionally drink alcohol – beer or wine or wine coolers. Cannabis drinks offer an interesting alternative particularly in the low-dose platform. You can have a beverage that has essentially the same effect as a beer does but without the baggage that alcohol brings,” says Riefler. “Cannabis drinks are something you can drink all afternoon.”