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Report on Business Cannabis Professional Truss’ targets for cannabis-infused beverages raise industry eyebrows

HIGHLIGHTS
  1. Molson Coors and Hexo-backed Truss plans to have several cannabis-infused drinks on Canadian shelves by mid-December, and is aiming for a market share up to 30 per cent
  2. Industry expert Brian Sterling points out cannabis-infused beverages make up barely 1 per cent of sales in U.S. states with legal cannabis markets
  3. Flavoured sparkling waters, spritzers and “terpenes and tonic" are among the products Truss is preparing to launch in the Canadian market following testing in California

Truss Beverages believes the Canadian market for cannabis-infused drinks could be more than 20 times the size of existing markets in the United States, but at least one leading industry expert is skeptical.

Brett Vye, CEO of the joint venture between brewing giant Molson Coors Canada and Quebec-based licensed cannabis producer Hexo, told Cannabis Professional the “opportunity is between 20 and 30 per cent of cannabis sales today absolutely” in an interview this week. Brian Sterling, president of SCS Consulting who advises most of the major food and beverage producers in the country, finds the target difficult to believe.

“Is it possible? Well, even leprechauns are possible; but I don’t see it,” Mr. Sterling said via e-mail.

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Available data from the United States support’s Mr. Sterling’s skepticism. Seattle-based analytics firm Headset published a report earlier this year based on sales in Colorado, Washington, Nevada and California, and found cannabis-infused beverages accounted for just 1.1 per cent of total legal marijuana sales over the course of January and February of 2019.

That is not a function of limited consumer demand, Mr. Vye argues, but simply evidence of limited product quality.

“If you look at the beverages that are available in those markets, in Colorado or even in California, the taste and experience is not really good at all,” he said. “Taste and obviously the experience with onset and offset are very inconsistent so when we look at those states in the U.S., we have tried all the products and nobody is doing it well.”

Truss has invested in technology that will help ensure an onset time of between five and 15 minutes and an offset time of roughly two hours, Mr. Vye said, not unlike alcohol. The company is also working with what he described as “two of the top flavour houses in the world” to ensure better taste, though he declined to name them or provide any details on the technology investment.

Product testing is currently underway in California, Mr. Vye said, noting such tests are still not allowed in Canada. The tests go beyond the user surveys that are common in the consumer goods industry, he explained, involving quasi-medical steps such as taking blood samples.

Canadians will get to experience the full line of Truss products as of Dec. 16, Mr. Vye said, noting the company was already prepared to launch as of the original target date of Oct. 17. Those products will include flavoured sparkling waters, spritzers and a twist on the classic gin and tonic cocktail that Truss is calling “terpenes and tonic”, in reference to the oils found in cannabis plants that are responsible for the unique flavour profiles of various strains.

“Then obviously with Molson Coors being one of our major investors, we can’t launch a beer, but we do have a surprise in that category that we are working on that you will be very impressed with,” Mr. Vye said.

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Pricing is still being “finessed”, he said, but noted comparable products in the United States range from US$8-US$12 for a 330ml product roughly the size of a pop can.

Mr. Sterling said Mr. Vye is right to point out new technologies can address the current challenge of onset-offset times, as existing products can take more than an hour to kick in and the effects can often last for several hours before wearing off, but he argues “it will take more than technology to create such a large market share.”

“The major issue is consumer naïveté and social stigma,” Mr. Sterling said. “Those take time and [money] to solve.”

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