The Barriers To Cannabis Beverage Category Growth
Jeff Maser from Tinley Beverages talks about the main barriers hindering the growth of the cannabis beverage category.
The cannabis beverage category accounts for just 1% of cannabis sales generated across the industry when compared to edibles and smoking. The beverage share of grocery store sales is 11%. If the cannabis beverage category would be the same as that, then it would be a $300 million category in California alone.
“There is tons of interest in cannabis drinks within press, and consumers, and just cannabis drinks in general. So, cannabis drinks seem like such a great idea to everyone, why is it just 1% of sales?” said Jeff Maser, Founder & CEO at Tinley Beverages. “It seems kind of strange, like why haven’t they caught on?” he added.
Maser took the stage at the first edition of the Cannabis Drinks Expo (July 25, 2019, San Francisco), and spoke about the 3 main barriers hindering the growth of the cannabis beverage category.
When cannabis beverages were newly brought into the market, the lack of science and technology involved made things a little hard. However, over a period of time, science has advanced the production of cannabis drinks - which in turn, has helped solve some of the scientific barriers that were there previously.
“Science is one of the barriers that the cannabis beverage industry has rapidly grown through in the past year or so,” said Maser.
Here are a few scientific barriers which have been solved
● Full flower effect
When cannabis beverages were new in the market, there was always skepticality behind them not having the ‘full flower effect’ like smoking does, so cannabis connoisseurs usually preferred smoking over drinking a cannabis beverage. However, thanks to technology and advanced science, cannabis beverages and edibles in general have the capacity of offering the ‘full flower effect’ that people are looking for.
● Rapid on-set and off-set
Another thing that was a barrier in the science side was the rapid on-set and off-set. So, at first, when cannabis beverages were being birthed into the industry, you had to sit around and wait for some time before you felt the effect of the beverage. But, once again, science and technology saw it through and now you don’t really need to wait around to feel something.
The taste of cannabis beverages has also changed over time. At first, the taste of canna-drinks was something that a lot of people didn’t enjoy, but over a period of time. Some people like their drinks to taste like cannabis, and others don’t - but now, thanks to new processes being invented, you now have the option to pick between the taste of your canna-bev.
● Clarity, Dispersion, & Self-Stability
Clarity, dispersion, and self stability are things that every beverage needs to have, whether it’s a canna-bev or not. However, it was something that producers and brands struggled with at first, but with the advancement of technology, things have changed and now cannabis beverages are able to achieve the right amount of clarity, dispersion, and self-stability.
● Dosage Consistency
Another thing which science has helped evolve in the canna-bev sector is dosage. But now, dosage consistency is very achievable, providing consumers a good experience with their cannabis beverages.
Regarding infrastructure, let’s say the cup is sort of full, but not completely full. What this means is that there have been problems which have been solved over time, but there are still spaces that need to grow and be worked on.
● Lack of infrastructure keeps prices high
One of the main issues that lack of infrastructure in the canna-bev world causes is that it keeps the prices of the drinks high. Let’s take a look at beer for example. You can buy beer at any store for prices as low as $1-$3, and that’s because there’s a huge amount of beverage infrastructure that has been built across the United States for the last, let’s say, 100 years. This has what has brought down the price. The main problem is that, that type of infrastructure is not available to cannabis beverage companies just because they don’t have the right licenses on them, and they don’t want to forfeit their current bottling business to get into or expand into cannabis. A lot of cannabis beverage companies use manual ways of bottling, and that really hinders in keeping the prices down.
“I think this is one of the key barriers that is keeping the sales down” - Jeff Maser
To solve this issue, scaled facilities are being built by cannabis beverage companies and co-packing companies to reduce prices. Maser announced the upcoming Tinley facility which is being built in Long Beach, and while that is being built, they’re also facilitating in a medium sized facility in Desert Hot Springs.
In the beverage industry, distribution is more than just trucks. One of the main focuses of distribution is DSD, which stands for Direct Store Delivery. DSD is a form of distribution that includes the regular physical logistics, and also the shelf design maintenance. When you go into a store, and you see beverages in the fridge and on the shelves, it’s not the clerks who put them there. It’s the distributors who get to decide what goes where.
So when it comes to cannabis beverages, the shelf infrastructure that exists at the point of purchase is where the canna-world lacks. So for example, when you go into a store, the checkout counter usually has a fridge around it with drinks - because drinks are sort of an impulse buy for consumers and they are mostly brand driven. When it comes to drinks, consumers usually know what they want, or what brand they want to pick up. So if there’s a fridge at the check-out counter at dispensaries, then consumers would be inclined to pick it up and give it a shot.
Even though there are a lot of dispensaries and lounges popping up across the legal states, there is still a lack of retail presence for cannabis beverages. A lot of dispensaries end up loading up on edibles and smokeables, but beverages is where they lack in. This once again leads back to infrastructure, as beverage shelving is something that dispensaries need to look more into.
There also aren’t a lot of licenses available for on-premise cannabis beverages, which also makes retail presence an issue.
Listen to Jeff Maser talk more on the Cannabis Industry