Business
Could Cannabis-Infused Beverages Ever Overtake Beer and Wine Sales After Federal Legalization?
Would the country ever consume more weed-infused beverages than beer or wine?
In all new legal market structures, you will find consumers yet to have indulged in any form of cannabis, despite the steady pace at which adult use is getting legalized. The use of drinks could pose a simple and friendly method of delivery to new users. According to reports by New Food, Jake Bullock, founder, and CEO of Cann, a company that deals in cannabis-infused drinks, said that the beverage sector is among the fastest developing in the marijuana industry.
Bullock stated that the company is trying to produce something unrestricted and fresh that has never been tried before. He added that the aim of the firm is not to draw marijuana smokers from their joints. Instead, it is to attract alcohol drinkers from their beers.
AN EXPANDING MOVEMENT
In areas that have legalized cannabis for recreational use, THC-infused drinks are found on the same shelves as other drinks like wine and beers. This raises the question of whether producers of alcoholic drinks should be worried about competition from cannabis-infused drinks. These questions were answered by experts in these industries in a November 2021 report published by Winemag.com.
Colleen McClellan, a trained sommelier and the provincial director of client solutions in Datassential, which is a prominent food and drink insights platform, anticipates business openings in the THC-infused beverages space. She said she thinks that we will keep seeing more interest and use in these drinks as other states soften the regulations.
McClellan forecasts that brands will keep entering the THC beverage space, ultimately leading to a merger.
She says that there are some consumers that relish the use of marijuana THC-infused products because it gives a useful benefit minus the hangover effect. In the United States, consumers’ knowledge of THC drinks increased in 2021 by over 9%, and now 51% of adults over 21 years affirm experience with them, according to a recent report by Datassential. The organization also discovered that THC drinks have the most amount of awareness and interest among older generations.
This may be because of the progress the marijuana industry marketing has achieved over the last decade. In a lot of cities in the United States, going into a dispensary is similar to entering a swanky cafe or an apple store. Cannabis has never been so customized as now when you can pick the strength, strain, and method of use, just like a bag of coffee beans.
According to the Global Cannabis Beverages Industry, a report released by Reportlinker.com last January noted that the global marijuana beverages market was valued at 799.8 million dollars in 2020 and is predicted to get to a new level of 2 billion dollars by 2026, increasing at a CAGR of 16.9%.
As found in the report, the alcoholic portion is readjusted to an amended 15.7% CAGR for the duration of the next seven years.
In the meantime, the non-alcoholic portion is predicted to increase at a 17.5% CAGR to get to 1.6 billion dollars by 2026.
CANN’S CURRENT ACTIONS
Cann, at a fundraising event last February, corroborated a 27 million dollars Series A financing round from existing investors such as Imaginary Ventures, new institutional capital, also from a new roster of celebrity investors like Adam Devine, Sara Foster, Zoey Deutch, Nina Dobrev, Rosario Dawson, and Jordan Cooper.
To add to this landmark financing round, Cann also announced its first international expansion with the launching of the brand in Canada. Jake Bullock said that more than three years ago, they were informed that consumers did not want THC in drinks and that, at best, they were a novelty. However, their expansion to Canada and this fundraiser show that microdose drinks have come to stay. Adults around the world are eager for an alcohol alternative that certainly provides a social buzz and also puts taste first.
BELIEFS OF EXPERTS IN THE MARKET
Morgan McLachlan, master distiller, chief product officer, and co-founder of AMASS, a beverage company that specializes in Botanics-based adaptogenic beverages. Recently, she helped in developing Afterdream, a marijuana-infused non-alcoholic spirit that was created to achieve what the company depicts as a mind-mellowing, limb-loosening high that imitates the feeling gotten by a potent cocktail, that she believes will appeal to people who drink alcohol also.
McLachlan says non-alcoholic beverages and marijuana beverages are the most rapidly growing sectors of the beverage market, with sales rising from 67.8 million dollars in 2019 to 95.2 million dollars in 2020.
She added that the use of recreational cannabis by adults is a rapidly expanding market, and non-alcoholic drinks have even a more swift growth, and that both low and no ABV sectors have risen 506% since 2015 and are expected to attain 280 million dollars in earnings this year. Analysts at Distill Ventures reported that 58% of consumers drink more soft drinks than last year.
Even with this growth in the market, Jim Higdon, chief communication officer and co-founder of a Kentucky-based company that manufactures full-spectrum hemp oils named Cornbread Hemp, does not think traditional alcohol, beer, or wine producers need to be worried.
Higdon says that THC drinks still have a place. However, the place is likely not in the hands of a wine enthusiast with a refined palate as the objective customer for a cannabis beverage is either a person who wants to reduce their alcohol consumption or a novice consumer searching for a non-smoking alternative to consuming marijuana.
It is also his belief that the prosperity of THC-infused beverages will eventually depend on their taste. He also believes marijuana drinks might not be the best appeal to wine enthusiasts to bring them over to weed.
CONCLUSION
We cannot decisively say that the introduction and sale of cannabis will overtake the normal alcohol like beers and wines or spirits, despite the increasing popularity of cannabis. There are still some individuals who prefer to take the regular alcohol to cannabis and others who haven’t tried weed at all. Not until the sale of THC-infused beverages becomes widespread we won’t really know.
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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