Lagunitas retools cannabis drink as Sonoma County company aims to capture growing market
More than five years ago, Lagunitas Brewing Co. toyed around with a cannabis-infused drink in combining hops with marijuana buds in a flavorful pairing.
The foray was not surprising. The Petaluma-based brewery became a pioneer in the craft beer marketplace by producing very hoppy India pale ales marketed with a stoner-friendly vibe.
Founder Tony Magee noted that he would “wake and bake” most days before heading to the brewery.
In its quest, Lagunitas teamed up with CannaCraft, a Santa Rosa-based cannabis production company, to enter the market. In 2017, the two produced SuperCritical Ale, a hoppy beer brewed with terpenes, the aromatic compounds of essential oils that were extracted from both cannabis and hops.
The brewery also helped out CannaCraft with its vaping products for its AbsoluteXtracts line that carried a beer-like aroma.
A year later, the two unveiled a much more ambitious gambit: Hi-Fi Hops, a hop-flavored tonic water that contained THC, a principal psychoactive chemical in cannabis. That product in a 12-ounce bottle could be only sold in licensed dispensaries within California and later became a top-seller based on having the Lagunitas name behind it after cannabis became legal for recreational use in 2018.
CannaCraft makes and cans the product at its plant because alcohol producers do not want to lose their federal license because cannabis is still illegal on the federal level.
But the drinks marketplace has dramatically changed over the past few years, especially as hard seltzer became a $5 billion business that has taken a sizable portion out of traditional beer sales.
The change has now spilled over to the cannabis segment.
The two companies have now revamped their product ― switching from bottles to cans and introducing more aroma notes of citrus and berries to its lineup. Next month, they are shipping out HiFi Sessions, a canned sparkling water with more tropical flavors that includes a low-dosage drink specifically targeted for those who are curious but still hesitant about cannabis beverages.
“As more consumers entered the marketplace, there was confusion: Is this a beer?” said Paige Guzman, chief marketing officer for Lagunitas, which is now fully owned by Heineken International.
The company found that more customers were looking at such cannabis drinks from a wellness aspect, whether it would be the soccer mom ditching her chardonnay for the product that has no calories and no threat of hangover to those who want a drink akin to tea to wind down before bedtime for a good night’s sleep.
“Every night, consumers have a choice: What do I want to use to relax?,” Guzman said. “As we have watched this evolution, we wanted to reflect the evolving consumer needs.”
The result? Three revamped products with a range of potency.
There is Hoppy Chilln, which features notes of tropical citrus fruits and contains 10 mgs of THC. In the middle is Hoppy Balance that has 5 mgs of THC and 5 mgs of cannabidiol, or CBD, a cannabis compound that has been used more as pain relief to treat aches.
The new entry-level drink is called Cloudberry, with tart and juicy flavors that has 2 mgs of THC and 2 mgs of CBD. A single can will cost $7 and four-packs will sell for $28.
The Cloudberry drink was designed for those looking for a micro-dose consumption as every individual has a different tolerance toward THC and that such a lower option will allow the buyer to tailor to his or her comfort level, Guzman said.
“What works for a medical patient versus what works for a stressed-out mom might be two very different things,” she said.
The low-dose option should be popular given the receptiveness to such drinks at the Solful dispensary in Sebastopol, said Eli Melrod, chief executive officer and co-founder.
“There is definitely a market for very, very mild low-does products,” Melrod said. “It’s great for alcohol replacement in a lot of ways.”
The cannabis drinks segment had the biggest growth of the past year out of all the different categories at Solful, Melrod said. In fact, the new Solful store that will open in Santa Rosa across from Montgomery Village in the spring will have three times the refrigerated drink space than the Sebastopol location because there are so many new products coming into the market, he said.
That’s supported by market research within this still-nascent industry.
The products have to be produced within each of the 37 states that allow for medical use of cannabis because interstate business is still illegal. In addition, 18 states and the District of Columbia permit adult use with California being the largest market.