Minnesota Cannabis Beverages – A Taste of the Future

What if I told you there was a place where you could get THC beverages at your local store, the same place you get your groceries for the week?  Or that you could go to your favorite restaurant and have your choice between wine, beer, hard alcohol, or a THC drink?  That this same place didn’t experience an increase in crime, car accidents, illness, and domestic abuse?  And that the cannabis beverage category was not only creating jobs, it was also responsible for hospitality and food & beverage services making up for lost revenue during COVID?  That the worst thing that’s happened is perhaps some people have ordered a little *too* much dessert?

And what if I told you this place already existed…and it was Minnesota?!

“THE WILD WEST” — NOT THAT WILD!

If you’ve been following the cannabis beverage market like I have, you’ve heard about the “Wild West” that is the unregulated hemp D9 market in Minnesota – but what I experienced during my visit for 4/20 activations was far from the “Wild West.”  Instead, what Minnesota has created, particularly for the beverage category, is a “taste of the future.”

Prior to my arrival, I had been following local beverage brands like Trail Magic and some larger cannabis brands that had embraced hemp D9 like Happi, Wunder, and Cann. I had read about how hemp D9 products, including beverages, were legally able to be sold “everywhere,” but I was skeptical.  Sure, it’s legal, but that doesn’t mean “everywhere” is going to carry those products. But when I was checking into my hotel (a Marriott property) and had the expected the “What brings you to town?” conversation, I was met with two infused beverage options available for purchase at their bar and, one was even available at their lobby convenience market for guests.  Even a patron at the bar leaned over and chimed in, “That one’s really good, too.”  I was almost at a loss for words because usually I’m met with a million cannabis 101 questions or my personal favorite – “Cannabis beverages exist?”

Not only that, I was also told that restaurants and lounges were seeing an increase in food orders, plus the beverages were being ordered to-go in 4-packs, so the overall revenue coming into these establishments was going up because of the addition of the hemp D9 options. Within one hour of my arrival, I was already finding that THC beverages were not only here, but more accessible and accepted than I had expected.  Little did I know, this was just the beginning.

THE FUTURE OF RETAIL: CANNABIS AND ALCOHOL SHARING SHELF SPACE

A couple of hours later, my gracious host and cannabis beverage content creator colleague, Bri Smith, picked me up for dinner where we were meeting the owners of Natreum, a Hemp & CBD Wellness Center that carries these hemp D9 beverages.  Before we got to talking shop, I spotted the tabletop beverage menu — “THC SELTZERS” with 4 options at various dosages listed right above the wine selection.  I knew that breweries were producing and selling their infused beverages at their locations, but for some reason this hit me.  I could hear myself saying slowly in my head, “THC BEVERAGES. AT A RESTAURANT. THAT HAS A LIQUOR LICENSE. AND THEY ARE COMFORTABLE SELLING AND OPENLY PROMOTING THC BEVERAGES!”  Of course, I ordered one, and while I was beaming with excitement, Instagramming this experience, everyone else was just going about their business.

This is their normal.  And that is what I wasn’t prepared for – the normalcy of THC beverages being available everywhere.

As we sipped our infused beverages, I learned that Natreum currently has the most infused beverages of any retail store with nearly 70 SKUs.  SEVENTY.  I nearly spit out the drink I was so excited to order!  I thought, “That must be a mistake,” but then they mentioned another retail location had 50.  When you’re constantly being reminded that the legal cannabis beverage space is only 2% (on average) of the current market and your local dispensary has 10 SKUs from 3 or 4 producers, hearing these numbers doesn’t compute.  The next day I was going to have the opportunity to see it for myself.

And see it I did.  Natreum hosted a 25-person cannabis beverage industry pre-4/20 event (produced by Bri Smith, Ghislaine Ball, and Elizabeth Sage) at their lounge.  We were celebrating the fact that for an unregulated market, Minnesota was making the beverage category look (and taste!) so damn good.  In speaking with the “boots on the ground” responsible for growing the Minnesota market, I learned that some brands saw great success selling their products at salons and other non-traditional retail locations, restaurants were selling these beverages “to-go,” and that Natreum did in fact have 70 SKUs available for purchase “to go” or to be consumed onsite at their “Flower Bar,” which was lined with refrigerators.

WHAT THIS MEANS FOR FUTURE BUSINESS

Perhaps an unforeseen benefit to the “unregulated market” in Minnesota was that the brewers were able to not only produce their own beverages, but offer co-manufacturing and co-packing services to other brands.  This might not seem like a big deal, but anyone working in the regulated market can tell you that there is a bottleneck due to the limited number of licensed co-packers available in many markets.  Bottling and canning lines are expensive, so you’re in luck if you find a co-packer that can do beverage in a regulated market and you don’t have to fork out the cap ex to cover equipment costs, not to mention having experience working the machinery*.  Even then, since beverage is such a small percentage of the market, beverage is often not a high priority.

Brewers have experience working in a regulated market, and they have more to lose if they are working with hemp D9.  A mistake could lead to their other licenses being suspended or revoked, so you know they are going to make sure they do it right.  But they also make beverages day-in and day-out, they know all about can liners and how to work with various ingredients, flavors, terpenes, emulsions, etc. – Hops and cannabis are agricultural siblings, after all. This depth of experience allows these hemp D9 drinks to hit shelves more quickly and scale. That’s how you get 70+ SKUs in market in about 7 months’ time.

I had been in Minnesota for just over 24 hours, and as I laid in bed that night, I thought, “It’s going to be hard to go back to a regulated market after this,” because in Seattle I have to go to a dispensary, and there are limited options for beverages.

4/20: A TASTE OF THE FUTURE

The next day was 4/20, and we had planned a visit to another THC retailer, Dabbler Depot, where we were scheduled to host a LinkedIn Live at their studio to talk about hemp D9 beverages in Minnesota.  The Dabbler Depot also sold hard alcohol, beer, wine, and more.  There was also live sampling, product and swag giveaways, a food truck ready and waiting in the parking lot — and no need to stop at an ATM like you would at a dispensary, because you could pay with a credit card.  Again, these seem like little things, but they are often restricted in regulated markets (varies by state).  We continued to two additional 4/20 events, same experience — alcohol and THC beverages coexisting without any of the “adverse side effects” (crime, abuse, illness, etc.) commonly pinned on THC.  THC beverages are an expected offering at many establishments.  When it comes to infused beverages, 4/20 is Minnesota’s every day.

As a cannabis beverage enthusiast and a representative of the Cannabis Beverage Association (CBA), I can tell you that the lifestyle Minnesota has created for cannabis beverages is what we’ve envisioned for the future.  It’s a case study, social and economic, that can set an example for other markets, the country, and the world.

That said, regulation in Minnesota is inevitable and necessary from a consumer safety standpoint. Regulation is only bad when it’s done poorly.  The trick is screwing it up “the least,” as best put by Bob Galligan, Director of Government and Industry Relations at Minnesota Craft Brewers Guild, who is working with brewers, manufacturers, and regulators to hopefully achieve just that. Collaboration and compromise are key. It won’t be perfect right out of the gate, but we need a starting point that doesn’t attempt to put “the toothpaste back in the tube,” while maintaining the environment created without stifling the growth and/or hurting these businesses.

FINAL THOUGHTS ON MINNESOTA’S POTENTIAL IMPACT ON THE INDUSTRY

The cannabis beverage market is ‘small but mighty,’ and as a result, we collaborate and work together because “Rising tides lift all ships.”  Minnesota’s beverage market is a rising tide, demonstrating just how mighty the category can be.  The CBA is looking to support Minnesota regulators, even submitting feedback with this last version of the regulations, as they develop their guidelines.  If Minnesota succeeds and influences other markets, cannabis infused beverage becomes a top 3 consumption method sooner rather than later, and maybe we do get closer to Boris Jordan of Curaleaf’s beverage prediction of 50% of the market.

Back in Seattle, I’m quickly reminded that I’m not in Minnesota anymore as my friends and I plan dinner out where I won’t be able to order a THC beverage with my meal.  Don’t get me wrong, I love my wine, but this past week was my first trip where I didn’t consume a single alcoholic beverage, simply because I had the option to consume THC beverages everywhere I went.  No hangover or foggy mornings, went to all the meetings and social outings, came back from a work trip actually refreshed…

So, is Minnesota giving us a taste of the future?  “You Betcha!” — and it tastes (and feels) so good!

*NOTE: There are some experienced beverage co-packers in regulated markets, but just like most things, they are not all created equal.

Thank you to all the brands and organizations that made this experience possible: Ganjier, Natreum, Dabbler Depot, Can Can Wonderland, Chill State, Cann, Wunder, Happi, Cantrip, You Betcha!, Moxy Hotel (A Marriott Hotel), North Infusions, Plift, Trail Magic, Stanley’s Bar Room, Crested River, BLNCD, Nibbana.