One of the hottest segments in the beverage industry is the increasing popularity of seltzer waters. Among the fastest growing consumer discretionary sectors is the recreational marijuana industry. A Durango collaboration is looking to tap into the popularity of both markets.
Jonny Radding and Aaron Miles of Durango Organics have joined with Matt Vincent of Ska Brewing Co. and Ska Fabricating to produce Oh Hi Beverages, THC-infused sparkling seltzers, which should be hitting recreational marijuana dispensaries in Colorado beginning in mid-March.
“We’ve known each other for a while. We were good buddies at Fort Lewis College in the early ’90s,” Vincent said. “Jonny’s been wanting to put together a beverage for the marijuana industry for a while. I’m incredibly excited about this. I think we’re ahead of the game.”
Vincent said he thought the trio was on to something when, after a meeting to discuss formation of Oh Hi with Radding, he heard that Constellation Brands, the maker of Corona and El Modelo beer, had invested $4.8 billion in Canadian dollars to up their stake in Canopy Growth, a Canadian cannabis company that makes cannabis-infused beverages and sleep aids.
“I thought, ‘Oh, wow, we may have stumbled across something pretty big here,’” Vincent said.
The collaboration traces its roots as far back as 2010, when Vincent and Radding first began discussions about some kind of joint effort using Vincent’s knowledge of canning lines and launching brands with Radding’s and Miles’ knowledge of the marijuana industry.
Vincent said his first thoughts were of things such as dry marijuana in cans. Eventually, the trio began discussing beverages.
“When they began talking about sparkling seltzers, that’s when a light bulb went off above my head. That’s totally up my alley,” Vincent said.
Oh Hi will come in four flavors: grapefruit, lemon-lime, pomegranate and ginger basil limeaid, with each 12-ounce can containing 10 milligrams of water-soluble THC. Radding said a single can will retail for between $7 and $9.
Using water-soluble THC in the sparkling seltzers prevents any marijuana taste or after-taste. The ginger basil limeaid, in addition to 5 mg of THC, will also have 5 mg of cannabidiol, or CBD.
Brainstorming for flavors began in March 2017, with the trio researching the most popular flavors for sparkling seltzers and then developing recipes for their beverages, sans the THC.
“We knew the THC wouldn’t change the flavor,” Miles said.
The drinks then had to pass the taste test with the trio and friends before the recipes were finalized. Brendan McClatchey his been hired as Oh Hi “seltzier.”
“We had a whole list of potential flavors – mango, passion fruit – that we eventually whittled down to four flavors,” Vincent said.
On Monday, the trio had its first canning run – lemon-lime – for Oh Hi Sparkling Seltzers. The small-batch runs produce 3,000 cans per run. Oh Hi will produce all four of its flavors before releasing the beverages to the recreational marijuana market in Colorado.
A big stumbling block for Oh Hi was development of a childproof lid for the cans.
Oh Hi went to Tread Global, a Denver manufacturing firm, for development of the childproof top. The firm, Radding said, kept the rights to the childproof lid so it would be in position to work with other makers of THC-infused beverages down the road.
Zachariah Johnson, vice president of business development for Tread Global, which largely provides engineering to bring inventions to market, said little design work had been done on child-resistant lids since the 1970s until Colorado’s legalization of recreational marijuana in November 2012.
An increasing share of Tread Global’s work has come from product development for the legalized pot industry in Colorado in the last three years, Johnson said.
“It doesn’t come along very often that you have a new $1 billion industry come to market,” he said.
Tread Global sees applications for using the childproof top for other THC-infused beverages for clients in Colorado and other states and nations with legalized pot, particularly California and Canada.
Radding said he believes Oh Hi is one of only about 20 THC-infused beverages now on the market in any state with legalized recreational marijuana.
A market segment for THC-infused energy drinks has emerged, and Radding said several THC-infused sparkling waters are on the market in California.
But the trio believes Oh Hi will be the first THC-infused sparkling seltzer in Colorado.
Vincent said increased competition in sparkling seltzers at this point would be a benefit because the category is so new that a big issue for Oh Hi will be getting shelf space at recreational pot shops.
“There’s a famous quote: ‘A rising tide lifts all boats,’” Radding said.
Vincent said the problem is similar to one the craft beer industry encountered early on when it had a tough time getting shelf space in liquor and grocery stores.
Oh Hi, given the state-specific laws overseeing the marijuana industry, will be available only in Colorado initially. But the trio said eventually they would like to establish Oh Hi manufacturing facilities in every state with legal recreational marijuana.
Oh Hi also plans to develop CBD-infused sparkling seltzers, which would be legal across the United States, but that project is down the road.
In addition, Vincent said competition is much more intense for nonpsychotropic CBD-infused beverages, which can be shipped across state lines.
“We think this is going to be big,” Radding said. “But we don’t have any idea how big it will be. This is all pretty new. We don’t have any data to give us any indication.”