Article by Jeff Lagerquist,
In the booze business, summer is “showtime.” Warm weather packs patios. Backyards fill up for barbeques. Absent a global pandemic, the trend is about as reliable as sand at the beach.
For Canopy Growth (WEED.TO)(CGC), the world’s largest cannabis company backed by the American purveyor of summertime staple Corona beer, the next few months are going to be an important test for its pot drinks. Investors will get to decide if the company’s beverage bet is paying off as cannabis fights an uphill battle for a home inside Canadian coolers.
Buzz about an alcohol-disrupting cannabis drink from Canopy gained traction as booze behemoth Constellation Brands (STZ) pumped billions into the Canadian pot producer in the summer of 2018.
Initially set for release in early January, the company launched Tweed Houndstooth & Soda, a sativa-dominant fizzy drink with notes of its Houndstooth cannabis strain, in mid-March. A second drink under the company’s Tweed banner hit retailers on Monday, an indica-dominant ginger ale.
Bill Newlands, Constellation’s chief executive officer, has taken a shining to the word “game-changer” to describe the new offerings that Canopy has long-claimed sets it apart from rivals in the sector that have been slower to pursue drinks. Newlands repeated the term in an interview with Yahoo Finance on Tuesday. It’s meaningful praise, given his demonstrated willingness to publicly shame Canopy’s lacklustre performance.
Both of Canopy’s drinks on the market today have two mg of psychoactive THC, enough for most people to catch a moderate high within a few minutes before deciding if they want to pull the tab on another slender black can.
Data from U.S. legal states recently cited by CIBC shows drinks command only one to two per cent of cannabis sales. However, the category is growing fast, showing an uptick during the COVID-19 pandemic.
For Canopy, sales have been brisk so far, according to Paul Weaver, the company’s director of innovation. He said Houndstooth & Soda sold out quickly in most markets, although he wouldn’t say how much inventory was ordered by provincial distributors.
Last fall, Canopy revealed its initial lineup of 13 infused drinks, ranging from cans of sparkling soda to multiple serving bottles of distilled cannabis for mixing into a drink of choice.
Canopy told Yahoo Finance Canada this week that Houseplant Grapefruit, a sparkling water with 2.5 mg of THC per can developed under Seth Rogen and Evan Goldberg’s pot brand, will be next to launch “in coming weeks.”