Molson, Hexo grows its cannabis beverage portfolio

Competition in the cannabis beverage market is due to heat up as a company backed by Molson Coors Canada launches a group of pot drink brands over the next few months.

Truss Beverage Co., a joint venture between the brewer and Ottawa-based cannabis company Hexo Corp., unveiled five brands today that it hopes will conquer the market and appeal to emerging tastes.

"From a consumer perspective, we've only seen interest continue to grow in the sector and we think the timing is perfect as we're coming to market and beverages," said Scott Cooper, Truss's president and chief executive in an interview.

Truss's extensive push into the sector comes in a year when the cannabis drinks space has experienced an uptick in new products.

Cannabis retailers are already selling Everie products from Fluent Beverage Co., a joint venture between Anheuser-Busch InBev and B.C. pot company Tilray Inc., A1 Cannabis Co.'s Basecamp cannabidiol iced tea and Aurora Cannabis Inc.'s Drift citrus shots.

Also on the market are sparkling grapefruit water from Houseplant--actor Seth Rogen's brand--and beverages from Canopy Growth Corp.'s Tweed.

Truss entered the pot drink space in December, when it partnered with Flow Alkaline Spring Water to launch goji-grapefruit and raspberry-lemon waters infused with cannabidiol (CBD), a compound found in cannabis.

Cooper says its new brands include Little Victory naturally-flavoured sparkling beverages and House of Terpenes sparkling tonics with botanically-sourced terpenes--aromatic oils that flavour cannabis.

Veryvell, an existing Truss brand that currently offers cannabis extract drops, will centre around cannabidiol products and wellness, while XMG and Mollo will focus on drinks that are geared toward special occasions.

Many of the beverages have a low to medium dose of CBD or tetrahydrocannabinol (THC), the active ingredient in cannabis that helps produce a high.

While some companies would shy away from launching five brands at once, Cooper said Truss made a deliberate decision a year ago to be different.

"We went into it with the thought of let's try one or two brands and see how it goes and we really got into it," he said.

"This category needs that leadership and we needed to create that structure and the breadth of offerings to really help breakthrough."

Making cannabis edibles, including drinks, taste good is key to most companies' strategies, which depend on attracting casual or first-time pot users to bolster sales from heavy users. These newcomers may easily be turned off by the thought of smoking weed, but drinks that taste more like fruit have long been considered a gateway for these consumers.

Truss studied the market and discovered about 43% of those who tried a cannabis beverage did so because it meant they could consume pot without smoking it.

Drinks can also attract cannabis consumers who find the smell of smoke a major barrier to enjoying it in a social setting.

Almost 75% of those surveyed said they don't like the lingering odour of cannabis flower and 76% don't consume cannabis because they don't feel traditional methods offer enough dosage control.

For Truss to take advantage of that opportunity, it figured out how to mask some of the strong taste of cannabis that could turn a first-time or casual drinker off with flavours such as lemon, black cherry and mango-pineapple.

"We were looking at technology and trying to understand emulsification because cannabis is an oil and doesn't blend (naturally with) water, so that was a key challenge we had to solve," said Cooper.

"Around bioavailability, (we were) ensuring that we had a product that consumers can absorb into their body in a reasonable time frame."

It was only then that the drinks could start being produced in a Belleville, Ont facility.

Now that they are ready for store shelves, other obstacles have come along: first the COVID-19 outbreak, then a U.S.-imposed tariff on aluminum, which Truss uses to can some of its beverages.

Neither worry Cooper.

Aside from small construction delays, COVID-19 hasn't caused material effects on Truss, he said.

Though the pandemic has kept many Canadians home and cutting back on shopping trips, Cooper was convinced consumers could be enticed into trying Truss's new drinks through advertising, social media and online orders.

The 10% tariff, he said, was also far from a concern.

"We have a warehouse full of cans," he said. "We're not worried about that. We're well ahead of that game."