With over 30 American states and the District of Columbia having legalized marijuana use in some form and Canada on its way to nation-wide legalization this summer, the cannabis industry is set to skyrocket in the coming years. However, these new legalization laws are posing a threat to the alcohol industry as more consumers are transitioning towards cannabis use and decreasing their alcohol consumption. Noting this trend, Molson’s Blue Moon craft beer inventor, Keith Villa, has launched a new company called Ceria Beverages that specializes in producing THC-infused non-alcoholic beverages.
Villa launched his Arvada, Colorado-based company just three months after he left his 32-year long career as Head Brewmaster at MillerCoors. The company will be one the first ever beverage companies in America to produce non-alcoholic varieties of THC-infused beverages. According to Villa, Ceria Beverages has an advantage in this market because their products will be utilizing THC – the psychoactive ingredient found in cannabis – whereas other cannabis beverage companies primarily use cannabidiol (CBD), the medicinal cannabinoid found in marijuana.
“CBD is not the component that most consumers look for,” Villa told Brewbound. “It certainly has its merits… But the THC is what gives people that buzz, which is similar to the alcohol buzz that people get from beer, spirits and wine. A lot of consumers of cannabis look for that buzz.”
According to Villa and his wife Jodi, they have invested a “significant” amount of money to launch their new company. Keith will be the head Brewmaster at Ceria while Jodi will serve as the CEO of the company. The duo is also partnering with InterContinental Beverage Capital (IBC), which is a reputable beverage advisory firm, for operational help and assistance in identifying accredited investors.
Ceria’s beverages will come in a variety of strengths depending on the effect that consumers want after consumption. The beverage company will be sourcing their cannabis extracts from Colorado-based cannabis research company, Ebbu, in order to create beverages that deliver a “chill, blissful or energizing” euphoria to consumers. In addition, Ebbu will be able to provide Ceria with extracts that have a cannabis taste – for consumers who enjoy the taste – as well as extracts that do not have the taste.
“We can dial in exactly the sensations that people want,” he said. “If people want a CBD sensation where they feel sort of tired and chilled and relaxed, we’ll be able to give them that. If they want a really great THC experience — it’s the end of the week and they want to relax responsibly with their friends and party — we can deliver that too.”
These new THC-infused beers will come in three strengths – light, regular and full bodied. Villa said that his products will stand out in the cannabis industry because current edible offerings do not educate consumers on their potency. Ceria’s beverages will have a labelling system that is similar to ski slopes, where they will be using leaf symbols to identify the strength of each beverage. A green leaf symbol will be used for beverages made for novice users with one to six milligrams of THC per 12 oz. bottle. A blue leaf will be used for intermediate beverages that have around 10 milligrams of THC per bottle. The most potent beverages with 15 milligrams of THC or more will be labeled with one or two black leaves. The beers will be sold individually or in four packs in licenced dispensaries in Colorado.
Ceria has not yet identified a price point for these products but Villa said that they will be more expensive than regular beer. This is because Ceria’s cannabis beverages are taxed more heavily and are more expensive to produce.
“It’s going to be more expensive than beer, but it will be an affordable luxury for those people who want to have an alternative to alcoholic beer,” he said.
Villa hopes to expand his business in other legalized states, however, because of state laws Ceria cannot ship cannabis products made in Colorado to other states. This means Ceria would have to set up manufacturing facilities in every state in which the company wants to sell their products.
“The fact is since it’s a state-by-state operation, we can’t set up shop in one state and have a presence across the nation in the state’s where it’s legal,” he said. “We almost literally have to set up shop in each state.”
Ceria is not the only company investing in the cannabis-infused beer business. In October, Constellation Brands – one of the world’s largest alcohol manufacturers – invested $191 million in their 9.9 percent minority stake of Canopy Growth, a Canadian cannabis company, with the intention of producing non-alcoholic cannabis beverages as well. Former Chief Marketing Officer of Budweiser, Chris Burggraeve, also co-founded Toast, a startup that plans to launch a cannabis-infused Scotch whisky this year. In addition, alcohol companies like Molson Coors Brewing Co., Anheuser-Bush InBev NV, Diageo Plc and Pernod Ricard SA are interested in the cannabis market as well.
With the recreational cannabis market forecasted to be worth $50 billion by 2026, it is no surprise that the alcohol industry is interested in investing. This is a smart move for them especially because the marijuana industry has the potential to take away $2 billion in sales from the alcohol market.