Seeing the iconic PBR logo on a cannabis-infused beverage in the beverage aisle might be just the distinctive marketing advantage PBR has been looking for. Pabst Blue Ribbon has struggled for market share for years and this move could signal a period of rapid growth in the North American Market. PBR launched its first infused beverage last week through a licensing deal with Pabst Labs, a new California cannabis company founded by former Pabst employees and industry experts.
Even though cannabis infused beverages account for only a tiny fraction of the overall cannabis market this could be an industry wide game changer. Sales of adult-use infused beverages in California brought in $3.4 million in September 2020 and when you compare that to the $40 million in sales for edibles for the same month you can see the disparity. Edibles had their ramp up period and great things are expected from the infused beverage market as well. Infused beverage sales in California in September were nearly double from a year earlier while edible sales grew by only a little over 50% during the same period.
The combined adult-use infused beverage market for California, Colorado, Nevada, Oregon and Washington State were $7.9 million in the month of August, with California accounting for the bulk of sales. That’s an increase from $2.3 million in August 2017, when major beverage companies started to make the leap into cannabis. During that same month, Lagunitas Brewing Co., now owned by Dutch brewer Heineken, partnered with California cannabis concentrate company AbsoluteXtracts, a collaboration that would go on to produce Hi-Fi Hops, a nonalcoholic beverage infused with THC and CBD.
Other mainstream alcohol companies are using partnerships to enter the cannabis sector. Constellation Brands who market Corona, Modelo and Ballast Point, acquired a 9.9% stake in Canadian producer Canopy Growth in October 2017 and increased its investment in 2018 and now holds a 38.6% stake. Molson Coors and Hexo Corp. formed Truss Beverages to produce infused beverages for the Canadian market and Anheuser Busch InBev, the world’s largest brewer, and Canadian cannabis producer Tilray formed a joint venture in December 2018 to produce nonalcoholic infused beverages.
To date big brands like such and Budweiser Coors have been unwilling to place the word infused on their cans or bottles. How has Pabst been able to pull it off?
In the licensing agreement no money changed hands, the brewer doesn’t have a financial stake in Pabst Labs and will not receive proceeds from the sales. With these moves Pabst hopes to avoid regulatory issues given that marijuana remains illegal under federal law. “Until the legal landscape changes, we can’t produce this in-house,” Seamus Gallagher, Pabst Blue Ribbon’s senior brand manager, told CNN Business. The deal does, however, position Pabst to capitalize on the cannabis market if and when the plant is legalized at the federal level. Now that the category has a direct major brand, it will be interesting to watch and see when other major beverage companies join the migration.
Cannabis Grow Builders has been involved in the emerging legal Cannabis Industry as a builder and developer of grow facilities since 2016. Daniel Stevenson and his team work with Cannabis Entrepreneurs and Solopreneurs to maximize the potential in their business while remaining on the cutting edge of constantly changing governmental regulations. Please reach out to us at 916-933-7333, via e-mail at firstname.lastname@example.org