Despite the slow pace of legalizing cannabis at federal level, some of America’s largest operators have been looking for ways to increase their revenue and profit. Recently, much of this attention has been focused on hemp beverages. They’re not all taking the same path.
Just this week, Florida-based Trulieve Cannabis Corp. (OTC: TCNNF) (CSE: TRUL) launched Onward – its nonalcoholic, THC-infused cocktail line – with a “crawl, walk, run approach,” which is the same strategy CEO Kim Rivers credits for the company’s early success in Florida’s medical cannabis market.
“This isn’t a fly in the night.” Rivers was adamant that we were not going to approach it in this way. We are approaching this with the goal of growing a product line within Trulieve.
While currently available online to ship to 36 states, she said, initial distribution through Total Wine & More locations in Florida was specifically chosen to generate consumer feedback and data in markets where the company (CSE: TRUL) (OTCQX: TCNNF) already has operations.
Trulieve wants to keep the whole vertical – developing, producing and distributing hemp beverages – in house. Trulieve’s hemp beverages come in cocktail flavors and three dose levels: 3 mg, 5mg and 10mg. Consumers can access batch testing results.
Rivers described a development program that lasted an entire year and was aimed at filling in the gaps of existing hemp drinks.
Rivers stated, “We found a gap in current products and we saw that our capability to be a leader with education as well as our competence and honestly within the THC market is able to differentiate us.” She did not provide any specific projections on the market for this product.
Green Thumb Industries’ (OTCQX GTBIF), a Chicago-based MSO, is taking a new approach. The Chicago-based MSO is making external investments, such as its stake in Agrify’s Señorita brand. The company can maintain a wall between their state-licensed hemp operations and its cannabis operations.
Kovler stressed that GTI doesn’t sit on the sidelines when it comes hemp: “We want to maximize shareholder value and maintain maximum flexibility.”
What lies behind the strategy of action?
In a legalized business it would be foolish not to list the company on Nasdaq, which can demonstrate how much THC will grow in this country. Why not do it with a Canadian business where there are no investors who can purchase the stock? Kovler said.
But both executives are pursuing the same goal: alcohol customers. In the wake of the slowing down in alcohol sales, especially among younger drinkers and cannabis executives, they see an opening to reach the cocktail crowd.
Green Thumb noted that Señorita is now the “exclusive THC beverage available for purchase” at Chicago’s music venue The Salt Shed, which draws in more than 600,000 people annually. Rivers made reference to Trulieve “targeting the alcohol consumer, and working on that conversation about transitioning away from alcohol and towards a hemp THC beverage.”
We put a lot into the formulation, and we really ensure that our brand, ingredients and customer experience are top-notch. Rivers said.
While the real prize for both operators would be federal legalization, intoxicating hemp beverages offers a growth opportunity amid uncertainty in Washington, D.C. – another topic the two CEOs are divided over. Rivers remained cautiously optimistic about Trump’s administration dealing with “inequities that state legal operators” while Kovler has seemingly given up on federal redemption.
Kovler was blunt when he said, “We’re not optimistic about changes coming from D.C.” Take a look at Kennedy and his appointees. In the huge growth markets that nobody else controls, we will instead play offense.
We think that the DEA has been corrupted, misguided, and is out for lunch. It’s not a popular opinion – it’s controversial – but it guides how we allocate dollars … Being on an island away from our peers is welcomed over here, no problem.”