Boston Beer Company Joins Growing Cannabis Beverage Market

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As interest in cannabis drinks continues to grow, Boston Beer Company (the maker of Sam Adams) recently announced plans to introduce a line of THC-infused non-alcoholic teas, joining a number of other beverage companies in this growing market. The new product line, called TeaPot, will not yet be available in the United States. Boston Beer begins the launch of TeaPot in Canada in July and plans to expand across the United States and globally as the regulatory landscape develops. Boston Beer’s entry into the cannabis beverage space is strategically tailored, through the creation of a subsidiary to operate in partnership with Canadian-based entities that will supply the cannabis for TeaPot and manufacture and distribute the product. This approach leads to a more agile operation than if Boston Beer were trying to control the entire supply chain.

Companies entering the emerging cannabis beverage market face a variety of challenges, including regulatory uncertainty and inconsistency. Although sales of THC are not federally legal in the United States, a majority of states have legalized marijuana for adult or medical use, and a growing number specifically allow the sale of cannabis-containing beverages, subject to varying requirements. Canada, where Boston Beer is introducing TeaPot, currently limits the volume of cannabis-infused beverages an individual can possess to around the volume of five twelve-ounce cans – although proposed regulations could increase that limit. Another impediment to faster industry growth is infrastructure – in Canada and most states that allow such sales, only licensed cannabis establishments can sell beverages containing THC. These establishments sometimes have to buy equipment to store refrigerated drinks that are much less concentrated, and therefore bulkier, than the gums, tinctures and other cannabis products they sell.

Consumer demand is another variable influencing the cannabis beverage market – and this demand is expected to increase. Pandemic-related restrictions on gatherings have somewhat slowed the rise in demand, as consumers consume cannabis beverages much more often in groups than when alone; as these restrictions continue to ease, cannabis beverage sales will likely increase accordingly. Additionally, Boston Beer and other companies view cannabis drinks as an alternative to both alcohol and other forms of marijuana – these drinks do not share the social stigma of smoking and generally contain less THC. than edible products, so they are likely to appeal to a wider audience. As the cannabis market and regulatory landscape continues to develop, many more companies are likely to join Boston Beer in creating THC-infused beverage offerings.

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