Molson Coors to exit CBD market in the US

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/davidtrood
Pic:getty/davidtrood

Related tags: cannabis beverages, Cannabis, Cbd

Molson Coors will unwind its Truss USA joint-venture and exit the CBD beverage business in the United States at the end of this year.

The beverage giant cites a lack of certainty over federal legalisation of cannabis products: resulting in an unwillingness from other stakeholders (such as retailers and distributors) to take on CBD brands.

Difficulties in launching and scaling CBD products

Truss USA a joint venture between Molson Coors and cannabis producer HEXO Corp launched in 2020​ (mirroring their continuing Canadian joint venture which was launched in 2018​).

The goal was to 'forage a new space at the intersection of the beverage world and the CBD frontier', with their premium, non-alcoholic beverages and beverage drops. 

In contrast to the Canadian joint-venture, Truss USA has been focusing solely on CBD beverages (never exceeding 0.3% THC) as per US regulations. 

Hemp-derived CBD water Veryvell​ was launched in Colorado in January in 2021, with Truss USA now shipping to 26 states including Alaska, Arkansas, Colorado, Connecticut, Florida, Iowa, Kentucky, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia, and West Virginia.

However, the company does not see enough potential in the category over the near-term to keep operations running: in particularly noting the difficulties in scaling up the business as it would hope to do in an emerging beverage category.

“While several US states have legalized cannabis products in recent years, including a handful in the recent election cycle, there remains no near-term pathway to federal legalization, leaving uncertainty in the market,” ​says the company.

The FDA recently sent out a raft of warning letters to certain CBD-infused brands: creating what appears to be an 'aggressive' position against brands which fail to market their products clearly.

While Truss USA was not one of these companies (and its announcement to shutter US operations came before the FDA warnings), the crackdown illustrates the continued regulatory minefield and a patchwork of state regulations​ that CBD brands face.

“That’s left some chain retailers and distributors hesitant to accept CBD beverage brands, complicating distribution and making the path to profitability a challenge.”

Should the regulatory landscape in the US change, however, the company says it would be prepared to re-enter the space.

Importance of scale

Meanwhile, Molson Coors and La Colombe Coffee Roasters have jointly agreed to end a distribution agreement for the latter’s RTD coffee drinks in March, with La Colombe combining operations for its RTD coffee business with its bagged coffee and cold brew coffee multi-serves.

Molson Coors says the decisions in RTD coffee and cannabis will allow the company to ‘invest more time, energy and resources behind spaces outside the beer aisle that offer the most growth potential’, such as ZOA in the energy drink space, Five Trail in the full-strength spirits space, and Topo Chico Spirited, a forthcoming offering in the spirit-based ready-to-drink cocktail space. 

The company also continues to test and trial other non-alcoholic beverages via its partnership with L.A. Libations.

“Not every project or innovation will meet our ambitions. What’s important is that we learn from each and build capabilities that will serve us well into the future,”​ Pete Marino, Molson Coors’ president of emerging growth, said in an email to US distributors said.

“The key for us is to go big behind what’s working and smartly pivot out of what isn’t working from a scale standpoint, like CBD beverages.”

Hear from Truss Canada and L.A. Libations in our beverage innovations webinar

Don't worry if you missed last week's Beverage Innovations webinar: with speakers from Truss (Canada), L.A. Libations, Rabobank, GoodSport and Nerd Focus! You can still catch up on demand for FREE here.

Related products

show more

ADM Sustainability & Integrated Supply Chain

ADM Sustainability & Integrated Supply Chain

ADM: Gain an Edge with Global Consumer Trends | 07-Nov-2022 | Technical / White Paper

Wondering how to meet your climate goals? Find out how through increased investment in regenerative agriculture and other programs ADM can help you reduce...

2023 Global Consumer Trends Report

2023 Global Consumer Trends Report

ADM: Gain an Edge with Global Consumer Trends | 07-Nov-2022 | Insight Guide

Are you keeping up with the latest consumer trends? Uncover the 8 key global growth drivers shaping the future of innovation in ADM’s 3rd Annual Global...

Great mouth feel with plant-based appeal

Great mouth feel with plant-based appeal

ADM | 26-Oct-2022 | Case Study

Put Stabrium™ to work for you. After extensive development comes our Stabrium™ portfolio with the body, thickness and mouthfeel consumers expect in dairy...

Our supply chain delivers your climate goals.

Our supply chain delivers your climate goals.

ADM | 25-Oct-2022 | Product Brochure

We put food on tables the world over. So, we’re investing in building a more sustainable supply chain. Our supply chain starts with regenerative agriculture...

Related suppliers

Follow us

Products

View more

Webinars