Beer Marketer's Insights
FOLO UP: Despite Ruling on Injunction, Outlaw Says It Will Pursue Case vs Adrenaline Shoc, KDP
Outlaw Energy may have lost bid in Delaware court to prevent launch of Adrenaline Shoc energy brand, but it’s continuing battle over brand it contends it should own a piece of. Tho ceo Jesus Delgado-Jenkins hasn’t been available for comment, co on Thurs issued statement to media saying, “Outlaw is disappointed by the Court’s denial of its motion, but the legal process continues and the court will have an opportunity to hear and decide on all of the facts and questions of law at trial.” As reported yesterday, Delaware Chancery Court judge rejected injunction request in stinging terms, saying Outlaw’s assertions in case “strain credibility” (BBI, Jun 19). Suit filed May 7 names A Shoc and its distribution partner Keurig Dr Pepper as defendants in its charge that they misappropriated recipe, branding and marketing plan in which it deserves ownership stake (BBI, Jun 18).
Weller may be only 2 years old, but it ranks as pioneer in bringing CBD-infused edibles to market, starting with coconut bites in 2017 and canned line of sparkling waters last year. At BevNet Live conference in NY last week, cofounder John Simmons alluded to his prior venture pioneering chai ingredient at Third Street Chai to outline challenges of building biz in highly fluid environment.
Co was founded by John Simmons, who’d founded Third Street Chai after back injury sidelined his bicycle-racing career, and Matt Oscamou, who’d created Frontier Bites brand at Frontier Snacks. The pair connected after Oscamou returned to Boulder from Calif seeking next idea. Simmons views state of CBD market as similar to what he encountered as chai pioneer, seeding brand in restaurants and ashrams in cities like Boulder, Santa Cruz and Portland, Ore, in fallow years before Starbucks made chai a household word. As is case currently in cannabis, a variety of approaches was possible: Third Street Chai launched at same time as Oregon Chai, with Third Street seeking to be versatile “Swiss Army Knife” vs Oregon Chai’s coalescing its identity around cinnamon-y flavor of its products. Same opportunity exists in CBD now, with some players employing chillout or relaxation tropes (as Recess, Dream Catcher and Kickback do), wide variety of others going with fun approach and a few adopting aesthetic, stylish, spa tropes as BevNet Live Showdown competitor Cloud Water does. Weller takes angle of offering wellness on demand, “more coach than couch,” via convenient, accessibly priced formats.
After raising $1.25 mil in equity from early-stage VC Harrison Metal, vehicle of former eBay exec Michael Dearing, the partners in 2017 launched coconut bites enhanced with 5 mg of hemp extract and sold in 5-pack single-serve bags, for 25 mg overall dose. They entered market where awareness of CBD was almost non-existent, and consumers were turning to products like undifferentiated tinctures. At first expo where Weller was exhibitor, “we were still answering the question, what is CBD?” Simmons recalled. Then last year they unveiled zero-sugar sparkling water CBD line in 12-oz cans containing 25 mg of CBD, in Watermelon, Black Cherry and Tangerine flavors. Also in mix are tubs of water-soluble CBD powders dubbed Barista Blend containing 10 mg of CBD per quarter teaspoon. Unlike other brands that have sought to avert regulatory flack by avoiding CBD moniker in favor of hemp, Weller is adamant about positioning itself as a CBD brand, positioned around calming, grounding effects that ingredient can confer.
In his BevNet Live presentation, Simmons offered frank assessment of myriad operational challenges confronting those who play in CBD at this stage. On product development front, flavor, solubility and stability continue to be challenges. It’s hard to make procurement decisions too, and brokers who pop up on Reddit and NextDoor “are no places to look for CBD,” he warned. Particularly before Farm Bill passed, it also was hard to find operational partners like copackers. There’s also considerable consumer education to be done, with adequate definitions lacking for key phrases like full spectrum and broad spectrum. Taking a leaf from the tincture makers, Weller sends practitioners to stores to educate consumers. Skeptical retailers also are demanding to see certificate of analysis (COA) and sometimes commissioning their own 3d-party testing of potency and presence of pesticides and heavy metals, to err on side of public safety. With both distributors and retailers, Weller is starting with small indies, then moving on to multiregion players while monitoring legal status on state-by-state level. Particularly since passage of Farm Bill, there’s been big influx of new brands, segmented across functions and form factors, and capital has finally begun to flow more freely know that SEC no longer views such investments as supporting illegal activity. Simmons’ advice on that front: raise money now, and prepare for a larger raise down the line as things further open up.
During brief q&a Simmons was asked what keeps him up at night. “Bathtub CBD, online CBD unregulated,” was his response.
Public markets still in feverish state over cannabis potential? Further evidence emerged today, when long-eroding shares of Lifeway Foods soared after Chicago-area kefir player that’s been struggling to grow said it would enter CBD segment “once it is legalized at the federal level by the FDA,” milestone that could still be years off. Tho most of Lifeway’s biz is centered around dairy-based kefir items, co said it would use its altdairy Plantiful trademark as vehicle for launch, offering Plantiful + CBD in biodegradable 3.5-oz bottle that contains 10 vegan probiotics and benefits of full-spectrum CBD. A portion of proceeds will go toward “restorative justice initiatives for those negatively impacted by US drug policy.” Lifeway ceo Julie Smolyansky made case that it’s logical area for wellness-focused company to extend, saying, “Mental health is as important as physical well-being, and CBD shows promise as way to promote lowered anxiety and stress relief. Science has shown that probiotics are natural inflammation reducers, and we believe that the addition of CBD will create an unmatched combination in the beverage space.” Announcement sent shares soaring 44% to 11-month high in mid-day trading, echoing response to other publicly traded bevcos like New Age that have thrown hat into ring, even tho path to full commercialization of CBD entries is very murky, with FDA only holding first hearing on subject a week ago and issuing no timetable so far on when it will complete analysis of ingredient. (It’s still operating with interim commissioner at helm too.) Plantiful, launched early this year in kids and adult versions, offers 10 g of protein and 10 vegan strains of probiotics, allowing LWAY to play in burgeoning plant-based milk space. As trading closed a little while ago, LWAY shares had subsided but still were at 6-month high.
Craft distiller was creating crowds at booth at recent cannabis expo by sampling range of whiskies and gins that include hemp seed in mash. Encountered at recent Cannabis World Congress & Business Exposition at NY’s Javits Center, co called Sono 1420 American Craft Distillers was claiming to be “only whisky in the world with hemp seed in the mash,” as range of what are positioned as “defiant spirits distilled with hemp seeds and flowers.” Among entries being sampled were 1420 BBN using mash bill of 70% corn, 15% rye, 10% milled hemp seed (it can’t be called “bourbon” because it’s not made with traditional grain – full name on label actually is 1420 BBN Spirits Distilled from Gains and Hemp Seed and Finished in Oak Barrels).
For those anxious to assuage any health concerns over cannabis, it might not be best metaphor to use. But New Frontier Data’s chief knowledge officer John Kagia is making a strong case of existence of a cannabis “contagion” that’s building interest in ingredient overseas far quicker than anticipated, even in developing nations like Zimbabwe and Kenya.
Speaking at BevNet’s Cannabis Forum in NY on Fri, Kagia offered picture of ingredient whose commercial use has gone global, with 60+ countries passing some version of cannabis legislation to this date. He described that several times as “contagion effect,” trend that’s “happening a lot more quickly than many of us had expected it to,” and putting him on the road presenting on opportunities not just in US and Canada but also Zimbabwe and Kenya, his own country of birth.
According to New Frontier’s research, the world already boasts 260 mil recreational cannabis consumers today, spending total of $344 bil. That includes $133 bil in Asia, $86 bil in N Amer, $68 bil in Europe, $37 bil in Africa and $10 bil in Latin America, per chart he displayed. Those #s don’t include therapeutic and industrial uses.
Market’s evolution is being shaped by several forces. Expanding legal access has much to do with contagion effect, when one country moves to legalization and similar countries are reassured not to see “raving maniacs roaming through streets” afterward. Word also is spreading about ingredient’s therapeutic efficacy thanks in part to efforts by WHO, UN and others within health community to perform or commission more substantive research. New-product innovation stoked by significant funding is upping presence of non-combustibles. And move away from joints is yielding more “cannabis-appropriate situations,” fostering social acceptance. And with younger consumers far more in favor of cannabis than those 65+, the trajectory will continue as their influence grows. There will be no putting genie back in bottle, Kagia said.
Among formats, concentrates (including vaporizers) have dramatically boosted their share over past 4 years, even as flowers have drastically declined. And new products are taking refined, premium approach. Among intriguing entries cited by Kagia is Canndescent flower brand that employs genetics for consistency and doesn’t employ strain names like Girl Scout Cookies but focuses on functions like sleep. Lucid Moods has become top-selling disposable vape brand in Colo, while Two Roots Beer “can’t keep up with demand.” He cited such other brands as Cannathlete training recovery serum and Foria menstrual cramp relief suppositories as sign of where category is going.
In Kagia’s opinion, viewing cannabis as comprised of medical and recreational segments is too simplistic. Major consumer survey New Frontier undertook late last year asked consumers why they consume cannabis and found broad range of responses: relaxation (66%), stress relief (59%), anxiety reduction (53%), sleep quality (43%), pain management (42%), falling asleep (40%), social experience (32%). His take: the market is “becoming increasingly nuanced, sophisticated and complex.”
‘Seismic Implications’ for Alcohol Question that’s been much on minds of regulators, alcohol marketers and distributors has been effect on alcohol. Most cannabis consumers drink alcohol quite regularly, New Frontier’s research shows. So what happens when both are legal? Kagia sees a bifurcation. Among young adults in an environment where cannabis and alcohol are equally acceptable, 54% believe cannabis is safer than alcohol, and therefore intend it to displace some of their alcohol use in the future, an insight that has “seismic implications,” Kagia said. Among key barriers is that of onset time: “waiting 45 to 90 minutes to get elevated can be problematic,” Kagia said, but some brands are getting to 10- to 15-minute range and even close to 5-minute mark. At that point, it “becomes a direct substitute.” Still, it’s not an entirely either/or proposition: he cited a “remarkable” cannabis-infused gin he’d encountered that might point to one product development avenue (we’ve encountered it too – see below).
Questioner wanted to know why, if consumers use both ingredients, the alc cos are so fearful. Kagia offered several rationales for why. For one, so far cannabis use has been occurring in isolation because there aren’t many public venues where it can be legally consumed. Once we see the advent of social spaces like lounges, cafés and bookstores “people will be making that choice, and we’re already seeing indications that people make that choice,” he said. Further, since New Frontier’s research shows that consumers view mixing alcohol and cannabis as being dangerous, they’re often choosing one or the other. He also noted there’s chance that young people won’t develop a palate for alcohol, keeping them away from category most of their lives.
Life on Earth is finally ready to launch hemp and CBD extensions of its Just Chill brand, but has decided not to proceed with planned acquisition of Wild Poppy juice biz. The news was contained in lengthy mea culpa to investors yesterday in which chmn/ceo Fernando Leonzo said plans for its branded businesses, which also include Victoria’s Kitchen and Gran Nevada Mio, were delayed because co’s legacy 3d-party distribution biz – which it intends to abandon – soaked up too much time and resources. Along the way, Leonzo offered latest evidence that rollup strategies often pursued by smaller bevcos can fail to yield anticipated synergies.
By now LFER has belatedly filed 10-Q statement and is ready to launch Just Chill Organic Hemp Beverages via half-liter plastic Amcor bottles as well as Just Chill CBD Essence Waters via half-liter straightwall bottles. Photos of the hemp line indicate it contains 20 mg of organic hemp seed oil as well as vitamins B6, B12 and C, in flavors like Watermelon Strawberry and Mango Passion Fruit, at 45 calories per bottle. Photo of essence water lineup suggests these contain 10 mg of CBD oil immersed in 9 pH water, in unflavored Original sku as well as Pineapple, Watermelon, Blueberry, Strawberry Kiwi and Cherry flavors.
Move comes as co has been adding rigor to governance via pair of new board members and addition of Trimino cofounder Peter Dacey as cfo. Further additions of seasoned bev people are imminent, letter indicates. It was strengthened board that questioned whether Wild Poppy deal was good move, prompting decision to abandon it.
Another Example of Rollups that Didn’t Pan Out It’s familiar trope among operators of small bevcos: assemble group of complementary brands to garner efficiencies that can support entire portfolio. Count LFER as latest to learn the hard way that it doesn’t always work out. Explaining more stringent view on M&A that co has now adopted, ceo Leonzo states in shareholder letter that acquisitions of Victoria’s Kitchen 3 years ago and Just Chill last year “were always viewed as an infrastructure move, but the problem was that these acquisitions did not generate immediate returns in helping the company with its own brands when it came to supply chain, retailer authorizations, long term relationships with club channel type retailers, key personnel or individuals that would have moved the needle with our own brands. We will not allow that to happen again.” So, no go on Wild Poppy.
Several weeks later than anticipated, the Lance-Collins-created Adrenaline Shoc finally is launching thru Keurig Dr Pepper system as clean upgrade over performance-energy leader Bang. What’s also called A Shoc made appearance this morning at KDP’s national sales meeting in Dallas, with plan to launch in company-owned bottling operations in Calif, Tex, Nevada, Colo and Chicago, as well as in Ariz via indie house Kalil Bottling, which recently saw departure of Monster Energy. Launch was greenlighted after Delaware court judge rejected injunction request by another former Collins vehicle, Outlaw Energy, whose ceo Jesus Delgado-Jenkins claimed Collins had misappropriated IP developed in his work at Outlaw and filed suit just ahead of planned May 15 launch. Judge forcefully rejected that claim, noting in oral comments that “defendants have made a compelling case that Delgado-Jenkins could not have reasonably believed that Collins had any intention of putting Adrenaline Shoc in Outlaw by mid-October and that Delgado-Jenkins had an ulterior purpose in seeking to secure for himself an equity interest in A Shoc during this period.” More on that in a moment.
Launch is significant on several grounds. It further heats up already vibrant performance-energy space led by VPX’ Bang Energy that’s drawn endemic rivals like C4 and response from Monster Beverage in form of Reign entry. As important, it offers KDP a credible do-over in premium, nicely growing energy segment in which co has barely participated over past decade via its own Venom brand and partner brands like Xyience and Hydrive, both acquired as part of Big Red transaction. And as creatine-less entry, it offers test of whether segment defined in part by use of creatine – and characterized by legal feuding among Bang, Monster and Thermolife over ingredient – can be cracked without what some users seem to view as defining ingredient, along with branch chain amino acids (BCAAs) and hefty caffeine payload of 300 mg or more.
For energy blend, Adrenaline Shoc goes with natural recipe associated with brands like Hiball, Runa and Guru that it positions as “smart energy,” blend of green coffee extract, yerba mate, guayusa and coffee fruit, for 300 mg of caffeine all told, per A Shoc prexy Scot DeLorme, serial entrepreneur who recently came aboard after 8-year run at Monster Beverage, which had acquired DeLorme’s previous venture, Pre prebiotic brand. A Shoc also contains electrolytes naturally sourced from ocean minerals and includes not just BCAAs but full complement of 9 essential amino acids. It eschews chemical preservatives, tho sweetener blend of sucralose and erythritol means it still falls shy of claiming all-natural formulation. It debuts in 8 flavors. SRP of $2.79 positions it as premium, and DeLorme made clear A Shoc won’t be doing the extensive BOGOs lately employed by Bang and its new challenger Reign to build traction. He noted that strong performance by Bang, Reign and other entrants have validated performance energy as a separate sub-segment, offering a great entry point for renewed KDP effort. “It’s an exciting time for KDP to be getting in,” he said. Graphics were created by freelance designer John Malloy, per testimony in lawsuit, and recipe was devised by Wild Flavors’ Nancy Vorbach.
Tho c-stores are main initial focus, grocers such as Kroger and HEB also have expressed interest in picking up brand, which should be fully national next year. To foster tight ties to KDP network, A Shoc has brought aboard several former DPS execs who’re intimately familiar with white system, including James Collins, 23-year DPS vet serving as svp for sales since Mar. Per testimony in suit, Adrenaline Shoc has spent $6.6 mil prepping for launch, with over 300K cases of product sitting in KDP warehouses awaiting go-ahead and co maintaining $124K monthly payroll of 11 employees.
Tho partners had intended soft launch on May 15 and formal launch on Jun 1, that was delayed after Outlaw Energy – brand created by Collins in which he holds sizable interest – sued them on grounds that they’d misappropriated branding, recipe and marketing plan developed internally at Outlaw. Suit apparently was filed just ahead of launch, on May 7, but was kept under seal until recently (BBI, Jun 18); BBI inquiry in recent weeks as to status of launch had gone unanswered, under gag order by his lawyers, as Lance tells us now.
In discussion last night, Collins heatedly described suit as money grab by desperate co that was losing $10 mil to generate sales of $1 mil, and that had been spurned in effort to have Outlaw brand picked up by KDP system. Ironically, Lance claimed, it was his injection of $10 mil in new capital to keep co going that had funded suit against him and KDP. “It’s a failed coup d’etat,” he fumed. Outlaw ceo Delgado-Jenkins “bit the hand that fed him.” He said he intended to pursue recovery of his $2 mil in legal costs plus damages for weeks of sales lost due to launch delay. Collins acknowledged he’d enlisted Delgado-Jenkins to serve as front man in securing needed trademark, on assumption that if it were known he was the buyer the price would have been higher, but said it was absurd on its face that he would have verbally agreed to incorporate brand into Outlaw portfolio, as suit claims. BBI has been unable to reach Delgado-Jenkins for comment today.
Oral ruling by Chancellor Andre Bouchard deemed Outlaw unlikely to succeed on claims based on “uncorroborated assertions” by Delgado-Jenkins, which judge said “strain credibility.” The judge further noted that the evidence was overwhelming that Collins developed Adrenaline Shoc on his own and independent of Outlaw.
Outlaw had argued that opportunity came on Collins’ radar in his role as Outlaw board member when co met with 7-Eleven last Aug 29 and c-store operator expressed desire for Outlaw to produce private-label alternative to Bang. (It pulled plug on idea on Oct 11, tho it recently brought Bang knockoff to market under Quake brand via Canadian partner – BBI, Jun 10.) But judge sided with A Shoc and KDP in saying that wasn’t decisive milestone in brand’s development, and he also found it curious that Delgado-Jenkins didn’t file the suit at that time rather than waiting months. The record reflects “that rather than taking issue with Collins developing Adrenaline Shoc outside of Outlaw, Delgado-Jenkins affirmatively sought to obtain a personal interest in A Shoc,” the judge said, per transcript. “Indeed, it was only after Delgado-Jenkins appeared to realize in April 2019 that he would not be an investor in A Shoc that the claims in this case were asserted. I do not believe that was a coincidence, and in my view, based on all of the objective evidence that Collins was pursuing Adrenaline Shoc as an independent brand outside of Outlaw using his own resources from mid-October forward, Delgado-Jenkins' uncorroborated assertion that Collins had been assuring him for many months that he would place the product in Outlaw simply strains credibility.”
In remarks, Judge Bouchard employs acronym we don’t recall having encountered previously in civil proceeding. “On October 20th, 2018, Collins texted Delgado-Jenkins what we have been referring to as the ‘NFW message,’ which stated in categorical terms that there was ‘no way’ Collins was ‘putting A Shoc in Outlaw.’” Collins then resigned from Outlaw board on Nov 9.
National Beverage and Celsius vet Vanessa Walker, who gets lotsa credit for parlaying longtime sparkling water La Croix into millennials’ darling brand, has been building team and client roster at Miami-based venture she’s set up called Millennial Brands. Venture aims to offer comprehensive suite of services for emerging brands that don’t just get the product to market, but help with difficult navigation challenges of establishing right retail and distribution mix at right cost, before brand is ready to pitch major chains with help of partner like LA Libations.
In development that may or may not put a crimp in KDP’s imminent launch plans for Adrenaline Shoc performance energy brand, Outlaw Beverage has sued KDP and A Shoc creator Lance Collins for allegedly misappropriating its design, recipe and marketing plan while he was a board member at Outlaw. Lance, of course, earlier created the Outlaw brand himself, as a successor to NOS Energy brand sold to Coca-Cola as part of Fuze Beverage transaction. Suit contends that key elements of what showed up as A Shoc were created by former 7-Eleven exec Jesus Delgado-Jenkins as he joined Outlaw team, as well as investor/director Doug Weekes, working with Wild Flavors, to develop highly caffeinated entry and secure Adrenaline trademark. The suit filed under seal last month in Delaware Chancery Court was derided by Collins, who told Bloomberg Law it “rests on a fanciful tale of imagined wrongdoing.” Tho full details of brand haven’t emerged yet, it’s believed to offer KDP a play in so-called performance segment dominated by Bang. Collins, of course, recently sold his Core Nutrition co to KDP and has retained role as key innovation ally to Big 3 soft drink marketer.
Director of co that owns brand mgmt co Cannabiniers and Two Roots Brewing outlined strategy at Cannabis Forum that calls for co to ride non-cannabis NA beers, teas, coffees and sparkling waters to conventional retail and follow those with cannabis entries once climate is more benign.
Speaker was Michael Hayford, cofounder, chmn & ceo of Lighthouse Strategies, whose holdings including Cannabiniers and Two Roots Brewing. Michael is serial entrepreneur (with affiliations that include managing ptnr at US Coffee & Tea Pod) who, operating dispensary at time his brother was stricken with brain cancer, “started looking at what’s under the glass,” figuring there was need for items that are “healthy, safe, fit the consumers, that was our goal.” Result has been rapidly expanding empire that’s made a splash with early non-alc THC entrant in Two Roots, which launched in Nevada and in Feb expanded to Calif.
By now, Lighthouse Strategies boasts 85K sq ft of real estate, including space used for cultivation, retail and other activities. It’s expanding its vertically integrated operations in Calif and Nev while fomenting plans to enter Mass, Mich, Ore and Colo later this year. In recent months it’s acquired 2 breweries (Helm’s Brewing in San Diego and Dads & Dudes Breweria in Colo) in which to plug in the European de-alcoholizing technology it earlier procured. Two more breweries are under letter of intent. And discussions “that I didn’t see coming” have co discussing jv in space with unnamed top-10 craft brewery. “Depending how that works out, we may add more breweries or may not need to,” he told audience at Cannabis Forum, which is put on by BevNet. Meanwhile, co joins select list that includes only Constellation Brands as co that owns assets in both cannabis and alcohol. All told, co is licensing in 5 states, working on 2 more, and is in talks with 3 multistate operators (MSOs) about jv’s. Goal is to have brand presence in 20 states, Hayford said. Meanwhile, co has spoken to 3 of largest Canadian players who’ve signed jv’s with alcohol players and “it’s possible by end of year we could be in one of their portfolios” in Canada, he told audience. Hayford isn’t shy about broader ambitions, aiming to assemble portfolio comprised of $250 mil in cannabis biz and $500 mil in bev production, including conventional as well as CBD- and THC-infused bevs.
Two Roots, positioned as “the best of craft and budz,” brews non-alc beers that use nanoemulsion process to render THC and CBD in consistent dosages that are more absorbable by body. Beers are boosted with electrolytes and B-vitamins and include entries like Enough Said, New West and Tropical Infamy, all with 5 mg of THC. “Welcome to the happier hour,” proclaim its ads. Two Roots also has on drawing board Just Society brand of cold-brewed RTD teas and coffees (using Bird Rock Roast coffee) as well as sparkling brand called Creative Waters. Overall objective is “normalization of cannabis consumption and social platform.” So during launch week of Two Roots in Nevada, Hayford said he contributed couple of cases of cannabeer to barbecue beer cooler and was heartened to see that, among participants age 21 to 75, “no one thought twice,” with Two Roots sometimes spotted on table next to a Dr Pepper.
Having broad portfolio spanning cannabis and non-cannabis segments gives co oppty to crack conventional retailers who’re still skittish about CBD items with less controversial NAs and non-alc beers, riding trend that’s seeing non-alc beers growing briskly in Europe as consumers embrace the beer for its flavor rather than its effects. That could work for CBD and ultimately THC, Hayford figures. So, why wait, he asked. (Realistically, he doesn’t see THC items getting to conventional retail for another 3-4 years.) Strategy is playing out with its role as first weed co to sponsor pro sports team, Las Vegas Lights soccer team, at whose stadium Cashman Field it sells non-THC versions of Two Roots.
To mastermind push, Lighthouse and its operating units have been assembling exec team from CPG space, including prexy/coo Victor Jerez, an architect by training who enjoyed solid run at Pernod Ricard and has been aboard since Feb. Last fall, Cannabiniers added to its board former PepsiCo East prexy Michael Lorelli (BBI, Nov 21). Dir of brewing operations is Kevin Barnes, formerly of Green Flash.
Tho it’s early days, Two Roots has performed well, first at dispensaries in Nev, now in Calif. When given prominent shelf placement near flower product, it’s outperforming flower and gummies formats. Hayford claims Two Roots pushed out decade-old players in a few months in Nev. Among rivals, he acknowledges that Lagunitas’ Hi Fi Hops is doing well in Calif, while Ceria is off to solid start in Colo.
As for prospective competitors in future, Hayford was frank about competitive advantage that current regulatory fluidity, for all its inconvenience, confers upon cos like his vs the giant bevcos and other CPGs. “We’ve got 3 years invested in creating a product that’s fast-acting, low-calorie, socially integrated,” he said. “But the strategics can outspend everyone. One thing we count on is regulations, every state has fences.” Or, as he said at another point, “As much as we want the federal laws to change, the big guys will be standing on the sidelines for some period. We’ve got time to move forward and capture market share.”