One of the many benefits of legalization is the opportunity to research and develop new ways of consuming cannabis. Cannabis-based beverages are an example, and the state of Michigan has taken notice. Michigan Marijuana Regulatory Agency Director Andrew Brisbo had noted in October 2020 cannabis-infused beverages were “an area of interest to a lot of processors in the industry.” In early January 2021, Michigan’s Marijuana Regulatory Agency officially released guidelines for THC-infused beverages, which may be available for sale at licensed marijuana stores once products are approved by the state licensing agency. As the Mitten State is not the first to consider this option (thank you Colorado and California), some paths to the development of cannabis drinks have already been forged.
Cannabis-Based Beverage Requirements
The state guidelines include an application and tracking process to ensure these specialty beverages are tested for terpene, pH and homogeneity before entering the market. In addition to drinks being exclusively non-alcoholic, extensive focus is placed on product safety, particularly in terms of eradicating potential contamination as well as confirming consistent THC potency, by limiting any THC degradation or increase to 15% through the shelf life of the beverage. Additional rules decree the use of “potable, tested and treated water,” and only preservatives that are FDA-approved. Current Michigan law does not allow any business or other entity which does not hold a Michigan Marijuana Regulatory Agency license to sell any marijuana products. Therefore, cannabis drinks are restricted to sales through marijuana shops only.
As of date, the state has not issued licenses for lounges or approved any marijuana-infused beverages for sale; consumption during cannabis events is also pending. Michiganders looking for the first cannabis-based beverages in the state should keep an eye on the city of Detroit. In the fall of 2020, the city passed an ordinance permitting the establishment of recreational marijuana shops and cafes within Detroit city limits, making this area a likely spot for new cannabis beverages to appear on shelves.
Growth in the popularity of cannabis drinks is partly attributed to those searching for alternatives to alcoholic drinks, as well as curious, new consumers who are more comfortable with drinking cannabis instead of smoking or vaping it. Beverages also have the benefit of being more socially acceptable than smoking. While consumers are new to this product type, the appeal of cannabis-infused beverages to those in the industry is obvious: sales of these drinks were up 40% in 2020, according to data from Seattle-based cannabis analytics firm Headset, and numbers increased from $67.8 million in 2019 to $95.2 million in 2020. Although this product type is still a small portion of the market, the cannabis-beverage share appears to be trending up in early 2021, with a 1.2% stake year-to-date.
New Cannabis Products in Michigan
New cannabis products certainly have fertile ground in Michigan. In the 2020 fiscal year, Michiganders bought more than $341 million worth of legal marijuana. Further, generous tax revenue from those sales is being disbursed to local governments and services. The Michigan Department of Treasury is allocating nearly $10 million as a part of the Michigan Regulation and Taxation of Marijuana Act to 38 cities, seven villages, 21 townships and 38 counties. Each began receiving payments from the Marihuana Regulation Fund for every licensed retail store and micro business in its jurisdiction. For the state’s 2020 fiscal year, each eligible municipality and county will receive around $28,000 for every licensed retail store or microbusiness, as more than $31 million was collected from the 10% adult-use marijuana excise tax. Combined with fees, $45.7 million is available for distribution. Additional distributions include $11.6 million to the School Aid Fund for K-12 education and $11.6 million to the Michigan Transportation Fund.
In reflection of the popularity of cannabis drinks, a new group has been formed to connect leaders in the cannabis and beverage industries. The Cannabis Beverage Council (CBC) was formed to “forge a new beverage market by harmonizing canna-beverage policies across the country,” ATACH President Michael Bronstein said in a statement. “At the repeal of alcohol prohibition in the 1930s,” Scott Coors of the Coors Brewing family said, “the industry came together to create an industry effort and agree on responsible consumption, policies and best practices. “ATACH’s new council for cannabis beverages is modeled after this concept, which is why I am a part of this historic moment.”
How would cannabis-infused beverages assist your business? Attend CannaCon, the nation’s leading business-to-business cannabis conference, to find out! The CannaCon goal is to grow the cannabis industry by educating cannabis business owners on all things related to cannabis and CBD. Trade shows feature a large exhibition hall with exhibitors from around the country as well as seminars delivered by industry experts. Join in Oklahoma City May 27th and 28th or in Detroit June 25th and 26th!