Marijuana Business Magazine May-June 2019

Marijuana Business Magazine | May-June 2019 58 Beverage Mixes a Viable Option Global liquor and beverage giants have bet big on cannabis-infused drinks, despite the fact they account for only about 1% of legal recreational marijuana sales, according to industry data. While infused beverages aren’t chipping away at sales of flower or concentrates, they do have potential for mass-market appeal, making it an attractive new product category for manufacturers to explore. In general, however, there’s a prohibitive capital outlay for the equipment and technology needed to play in the beverage sector—particularly for manufacturers that bottle or can beverages in-house. Beverage products can also be less shelf-stable because low temperatures can degrade cannabinoids. There are additional challenges throughout the supply chain, including the heavy weight and bulky size of beverage shipments for distribution, and the fact that some cannabis-infused beverages should be refrigerated throughout their life cycles to maintain exceptional quality. Infused product manufacturers can circumvent those obstacles with mix- and-serve beverage powders that—with fewer challenges in manufacturing, dis- tribution and sales—can capture market share in a red-hot product category. Atlas Edibles, for example, worked with chemists with decades of bio- technology experience who used an encapsulation formula to create a line of flavored water-soluble beverage mixes that dissolve in liquid. Water-soluble beverage mixes have high bioavailability, which makes them as attractive as their liquid counterparts. Because they come in packets, they are more compact than cans and bottles and, therefore, easier to transport and store. Also, the products don’t have to be refrigerated, which extends • There was higher-than-average growth last year in the number of CBD products on the market. By year-end, more than 50% of all tinctures and sublinguals and roughly 45% of capsules and topicals on shelves had only CBD or higher ratios of CBD to THC, according to Headset's Liz Connors. • Popular product forms are creams, transdermal patches, sublingual tablets, tinctures and beverages. • These products appeal to older consumers, women and wellness-minded consumers, which means they have the opportunity for growth. SHARE OF PRODUCTS THAT ARE CBD OR CBD-FOCUSED TAKEAWAYS Source: Headset Tukan's products are named Recover and Focus to relay their desired effects to consumers. Courtesy Photo Products 2018: 21% 2017: 19% BEVERAGES 2018: 53% 2017: 47% TINCTURES & SUBLINGUAL PRODUCTS 2018: 14% 2017: 11% EDIBLES

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