Rolling up sales: Cannabis industry wants expansion of weed-infused drinks

When cannabis beverages first hit the market in early 2020, industry players saw the products as a way to bolster flagging revenues and attract new consumers who otherwise might not purchase pot products.

However, restrictive regulations prevent manufacturers from selling the beverages in a familiar way, producers say, and make it difficult to appeal to would-be consumers.

For example, alcohol drinkers are shocked to hear that many cannabis beverages can’t be purchased in six packs, according to Cannabis Council of Canada president and chief executive George Smitherman.

“They’re like, ‘What do you mean there’s a limit? Nobody limits how many bottles of tequila I buy. In fact, if I bought a lot, they might even offer to help me to the car,'” he said.

“Over here (with cannabis), we’re in a different world.”

Cannabis companies and advocacy groups are pushing Health Canada to change regulations curtailing the sale of pot-infused beverages.

According to Sean Webster, Canopy Growth Corp.’s head of government and stakeholder relations for Canada, the problem lies in regulations that limit customers to no more than 30 grams of dried cannabis or its liquid equivalent, 2.1 litres, per transaction.

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Single cannabis beverages sold in Canada must also contain no more than 10 mg of tetrahydrocannabinol (THC), pot’s psychoactive component.

This limits people from buying more than five 355mL cans of pot drinks with 2 or 2.5 mg of THC in each, but allows them to purchase nine of Canopy’s Deep Space beverages, which come in 222 mL cans with 10 mg of THC, said Webster.

“It’s frustrating for the consumers and…frankly for the retailers, because they’re the ones where the rubber hits the road and they have to try and explain this to the consumer,” said Webster.

The Cannabis Council of Canada said the same restrictions allow shoppers to purchase 17 cannabis vape cartridges with a combined 5,950 mg of THC or 100 bottles of marijuana oil spray with 50,000 mg of THC in a single transaction.

“The reality is they got the formula wrong,” said Smitherman. “This is the most egregious and quirky aspect of that formula. It’s just off.”

He and others worry the formula could also pose a safety concern because it encourages companies to launch products with higher THC levels but less volume or liquid.

Through recent consultations, Health Canada said it heard that public possession limits for cannabis beverages “may create an inconvenience for consumers” and inadvertently encourage some to purchase other products.

It is now actively considering the input received from those consultations, spokesperson Andre Gagnon said in an email.

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Canopy has recommended Health Canada increase the maximum possession limit to 48 units of cannabis beverages, irrespective of weight or volume of the unit.

Truss Beverage Co., a joint venture between Molson Coors Canada and licensed producer Hexo Corp, isn’t seeking an allowance for a specific number of beverages to be sold.

However, chief executive Scott Cooper said, “whether it’s 24 or whether it’s 48, we think those fall well in the realm of responsible consumption and responsible purchase.”

Those asking the government to reconsider its laws say the current policy is making it even tougher for cannabis companies, which have faced significant headwinds in the last few years.

Before and during the COVID-19 pandemic, many closed facilities, laid off hundreds of staff and embarked on restructurings as they got a clearer sense of how much demand for cannabis there was in Canada and tried to bring ballooning expenses in line with revenues.

When the health crisis began, the country’s first few cannabis beverages were launching, but stores in many provinces were forced to temporarily close to quell the virus. Cannabis companies had to urge people to shop online or through curbside pickup.

“It’s been a very challenging business. It’s not for the faint of heart,” said Smitherman.

Cannabis beverages and edibles were supposed to provide some relief from the challenges because industry observers believed they would attract casual, new or unlikely pot users.

Cooper, Webster and Smitherman are encouraging people to participate in a Cannabis Council of Canada campaign, asking the public to write to their federal members of Parliament demanding “more reasonable” regulations and soon.

“Timing is of the essence,” said Smitherman. “There’s a tremendous amount of loss opportunity associated with this.”