Consumers often turn to beverages when they’re looking for a boost, when they’re looking for relaxation, and for any need in between.

This innate capability also makes beverages an ideal platform for delivering cannabinoids, says Kenny Morrison, founder, VCC Brands, Venice Beach, CA.

“For thousands of years beverages have been an ideal delivery system for functionality,” he says. “Tea, kombucha, coffee, alcohol—we almost implicitly expect functionality from the things we drink.”

While cannabis beverages represent a small segment of the edibles market—and an even smaller portion of the overall cannabis market—their footprint continues to expand as consumers recognize their functional potential.

Kelly Nielsen, vice president, insights & analytics, BDSA, Boulder, CO, reports beverages made up about 6% of total edibles sales in states covered by the firm’s granular, product-level Retail Sales Tracking in the first quarter of 2021. Within beverages, drinks, including carbonated and non-carbonated drinks, make up more than 75% of beverage volume.

The category’s growth continues to accelerate. Dollar sales rose nearly 60% in the first quarter of 2021, compared to the first quarter of 2020. Additionally, BDSA tracked 10% more beverage SKUs in the first quarter of 2021 than it did the same time last year.

In the traditional retail space, including outlets such as grocery, convenience stores, and ecommerce, Nielsen says hemp-derived CBD food and drink products are still limited in availability, given the current legal landscape.

However, sales are growing, particularly through ecommerce. Nielsen says beverages accounted for 4% of CBD product sales in 2020, but that’s expected to hit 10% by 2026.

CBD Living, Corona, CA, has a robust ecommerce site for its CBD-infused products, including its still waters, shots, and lemonades.

“We find that consumables are in high demand statistically, both in stores and online, said CBD Living COO Sean McDonald. “After all, everyone needs to drink fluids every day.”

Manufacturing considerations

Successfully incorporating cannabis oil into a beverage formulation is a major challenge, given cannabis oil’s hydrophobic nature.

McDonald says CBD Living has been honing formulations for its proprietary water soluble technology for eight years. It’s designed to increase the absorption of cannabinoid molecules in the body for a quicker onset and a longer-lasting effect.

Meanwhile, Morrison says VCC brands started by using an ethanol tincture and then refined it.

“Our creativity, research, and pocketbook took it from there,” he says.

When it comes to flavor development, CBD Living says it listens to feedback from consumers and their wholesale customers.

“We also pay close attention to growing trends in the market,” McDonald says. “When we develop new products, we put them through small focus groups first to see what tastes the best.”

Morrison notes flavor profile development can be a long process that may require help from flavor suppliers.

“Beverage flavors have to be judged within the context of your cannabis emulsion, so organoleptic testing has always proven to require a real commitment from our taste buds and cannabinoid receptors. There’s only so much work you can do in a given day. It takes time,” he says. “Flavor houses have at times provided us a ‘cannabis flavor’ that we’ve used during R&D in place of an active emulsion. It allows us to hone flavor profiles without the psychoactivity which can be helpful but is not always ideal.”

Product innovations

CBD Living introduced its flagship product, CBD Living Water, in 2014 and has been refining the product ever since. Featuring 10 mg of nano CBD per 16.9-oz. bottle, the water also has an alkaline pH with the goal of decreasing acidity and inflammation in the body.

“When we originally launched CBD Living Water nearly eight years ago, dispensaries were the main stores we distributed to,” McDonald says. “Back then, dispensary customers were the ones who understood what CBD was and were looking for high-quality CBD products.”

Earlier this year, CBD Living moved into the THC realm, introducing two new brands: THC Living and Delta-8 Living. McDonald says the company saw growing demand in the dispensary market for THC products.

THC Living launched with three zero-sugar lemonades: Mango Lemonade, Pink Lemonade and Arnie 50/50, a lemonade and tea mix. Each bottle contains 100 mg THC (10 mg per serving).

“The response has been great,” he says. “There are many loyal CBD Living customers who are now taking part in our THC Living brand. They’ve been looking for a high-quality product with a psychoactive effect.”

In April, CBD Living launched the Delta-8 Living brand after six months of research and development. The line includes 100 mg Delta-8-THC lemonades in the same flavors, Mango, Pink and Arnie 50/50, as well 30 mg shots in Cherry, Grape, and Mixed Berry flavors.

“Shots are ideal for quick convenience and on-the-go consumption,” McDonald says. “These small-form products are fast and easy to consume. You get all the benefits of ingredients without having to consume a lot of liquids.”

VCC Brands also recently released a line of Cannabis Quencher shots designed to deliver targeted effects. Each featuring 100 mg THC, they’re available in three varieties: Old Fashioned Lemonade (daytime), Strawberry Lemonade (hybrid), and Nighttime Berry Lime with CBN.