(Toronto) When cannabis-infused drinks were legalized in Canada in 2020, cannabis growers expected these drinks to flow through the summer as consumers flocked to the new product category.
Posted yesterday at 4:47 p.m.
Those hopes were dashed, however, when the COVID-19 pandemic forced stores to close in March, while the following year was spent dealing with a hodgepodge of health regulations. Still, Dave Schlosser believes long-awaited summer demand is on track to materialize this summer.
“We believe this will be the summer of cannabis-infused drinks, because people want to go out, want to socialize, want to try new things,” said the new president and CEO of Truss Beverage, a joint venture between the giant brewery Molson Coors Canada and cannabis producer Hexo.
The surge of optimism comes as public health restrictions ease around mandatory mask-wearing, performance venue capacity limits and other measures that have helped reduce gatherings in places where consumers would have able to relax with a cannabis-infused drink.
These sentiments are also supported by policies being considered by the federal government, which would change the way the cannabis content of drinks is calculated – allowing consumers to purchase more drinks in a single purchase without exceeding the legal possession limit. in public, which the industry demanded.
The comment period on the changes ends Tuesday, around the same time Truss will begin unveiling 15 new drinks available for purchase this spring and summer. The new products will join a list of 18 Truss beverages already sold under the XMG, Little Victory, Mollo, House of Terpenes, Veryvell and Bedfellows Liquid Arts brands.
While data from cannabis market research firm Headset showed XMG was the top cannabis beverage brand between January 2020 and 2022, with sales totaling 16 million in Ontario, Alberta, British Columbia and in Saskatchewan, the category as a whole has so far failed to meet expectations.
The problem of taste
For years, cannabis drinks have been advertised as a way to appeal to novice or casual marijuana users, despite the difficulty of masking the bitter notes of cannabis. Cannabis flowers remain the top-selling product by a significant margin, accounting for approximately 49% of sales, or more than 195 million, in Ontario between October and December 2021 alone. During the same period, beverages accounted for only 2% of sales, or about 7.6 million.
Cannabis drink sales are weak in part because the drinks are still considered a “novelty” by many and are not sold in spaces like bars or restaurants, said Lisa Campbell, the company’s chief executive. cannabis marketing Mercari Agency.
“For cannabis drinks to really take off, they will need to be consumed in social settings,” she said.
Mme Campbell found that top-selling cannabis drinks often contain 10 milligrams of THC or are sodas, which are growing in popularity.
But for every success, there is a disappointment. Many sugar-free drinks are struggling to gain traction since without the sugar, it’s less easy to mask the flavor of cannabis, she pointed out.
“There are a lot of weirder, more specialized cannabis drinks that taste gross,” observed Ms.me Campbell.
Several players are also withdrawing from the market. Labatt Breweries of Canada bowed out earlier this month when it announced it would be ending Fluent Beverages, its soft drink company whose products contain some of the active ingredients found in cannabis.
Actor Seth Rogen’s Houseplant brand, known for its sparkling waters containing 2.5 milligrams of THC, also left the country in September, after ending its partnership with Canopy Growth.
“Margins are so low in cannabis right now that you only really stay in the game if you really dedicate yourself to it,” Ms.me Campbell.
She notices more corporate mergers, acquisitions and retooling operations as they develop more realistic product expectations, especially on the edibles side.
Strong flavors and less sugar
But the coming months will mark a change, Schlosser believes.
To drive growth to expected levels in the cannabis beverage market, Truss is launching XMG ALT Grape and XMG ALT Black Cherry beverages, each containing 10 milligrams of tetrahydrocannabinol (THC), the psychoactive component of marijuana. They’re sugar-free and calorie-free, which sets them apart from 70 per cent of the top 10 selling cannabis drinks in Ontario, which contain at least 13 grams of sugar, Truss pointed out.
“There are two big things consumers are asking us. The first is really strong, bold flavors, and then the second is…a little less sugar,” Schlosser explained.
“What we learned in the first two years is that the more complex the drink, the harder it is for consumers to know what they’re getting, so we wanted it to be really simple. »
XMG sodas in cola, foam soda, orange and root beer flavors will also appear in late spring, alongside those with blue raspberry and lemon iced tea.
Their marketing will be one of the first achievements of Mr. Schlosser, who took over as head of Truss after the departure of its former chief executive, Scott Cooper. The latter went to Hexo in the wake of the departure of the company’s co-founder and CEO Sébastien St-Louis, in October, when the company saw its losses swell.
Mr. Schlosser, who was previously Truss’ chief financial officer, doesn’t seem fazed by the turmoil nearby.
“The fact that I jumped into this role wasn’t really a transition actually,” he said. “For me, it’s just exciting. I can touch on a lot of things that I haven’t had to touch in a while, like day-to-day activities. »