Adam JacksonTilray Brands (NASDAQ: TLRY) (TSX: TLRY) will introduce a line of hemp-derived delta-9 THC drinks in “key markets” in the U.S. next month.
According to a Tuesday news release, the company formed a new business unit, Tilray Alternative Beverages, to implement moves like this.
Tilray didn’t specify the markets where the products will be launched, but it did mention that its Happy Flower brand will get its start in Texas and Louisiana in partnership with Emergent Beverage.
Each of the four drinks contains 5 milligrams of hemp-derived delta-9 THC per can. The company said that they’re designed to provide consumers with “a familiar, convenient and delicious way to relax and unwind.”
Tilray said it will leverage existing infrastructure with its subsidiary Manitoba Harvest, which makes various hemp-derived goods like hemp hearts, hemp protein and granola and is “sold globally and in approximately 17,000 retail stores across North America.”
While hemp was legalized under the 2018 Farm Bill, the legal status of products containing hemp-derived THC remains unclear, with regulations varying widely between states. But several cannabis companies have found ways to capitalize of the regulatory gray area.
In addition, beverages and other hemp-derived have seen a growing appetited in states where the marijuana industry has been more limited, either to medical only sales or outright banned, such as the South. Up north, Minnesota put up an entire regulatory framework with a goal to harmonize a market for craft hemp-based drinks.
Several existing cannabis operators have been taking advantage of what appears to be a more lenient and accepted cannabis channel. HighBridge Premium and Belushi’s Farm, for example, teamed up to put out their own line of infused beverages with national production at Surly Brewing in Minneapolis. Their roll-out strategy is similar to Tilray’s: targeting select states initially with plans to expand to up to 15 states by the end of the year.
Absent federal action, marijuana will remain exclusively controlled by various state regulatory regimes, while hemp takes orders from the USDA. Economist Beau Whitney recently told GMR that hemp beverages have essentially helped allow the craft brewers, in places such as Minnesota and elsewhere nationally, stabilize revenue “and save their businesses.”
The 2018 Farm Bill is due for an update, however, as the continuing resolution passed a year ago expires on Sept. 30. However, no final bill has been agreed to as yet. That leaves players’ inways into hemp an upside for possibly another year.
Other measures being introduced in Congress may also change the federal rules around intoxicating hemp products. A slew of U.S. attorney generals called for Congressional lawmakers to “address the glaring vagueness created in the 2018 Farm Bill that has led to the proliferation of intoxicating hemp products across the nation and challenges to the ability for states and localities to respond to the resulting health and safety crisis.”
