Earlier this month, Caliva, a cannabis products maker, announced its very first beverage brand partnership with Mood33 that will help distribute and merchandise Mood33’s THC-infused drinks in California adult use dispensaries.
Caliva’s agreement with mood33 is aimed at giving Caliva a retail foundation for it to grow in within the rising cannabis-infused beverage market. This announcement came a month after Caliva acquired Zola (a plant-based beverage company), and appointed Chris Cuvelier, former Zola’s CEO, to the new role of Head of Beverage.
Talking to BevNET, Cuvelier highlighted Caliva’s intentions to develop its line of beverage brands and creating a portfolio of other partner brands, not different from the model of brands allied with Keurig Dr Pepper (KDP).
Cuvelier and team believe that today’s cannabis-infused beverage market has not been broken yet since it has merchandised in many dispensaries as an afterthought. Caliva sees an opportunity to add partner brands like Mood33 to their products since such brands have their own brand ambassadors that drive execution, merchandising, selling, and driving cannabis beverage awareness.
Mood 33 will be one of the several Caliva’s beverage partner brands. The company aims at keeping its portfolio small and continues to focus on getting the “best in class.”
In 2018, the cannabis beverage market was valued at $89 million. Zenith Global projects that by 2023, this will hit 1.9 billion or more. Caliva aims at dominating California, which currently makes the most extensive legal market of cannabis across the world. The company has its products in about 250 adult use dispensaries in the state and uses its own DSD network.
Caliva’s partnership also gives Mood33 access to the company’s direct-to-consumer market that Caliva intends to expand in a few months.
Mood33 was launched last June by BeyondBrands but was formerly founded by Eric Schnell, the former Steaz president, and the co-founder of LOFT, Michael Christopher. Currently, about 60 California dispensaries have the brand ready for sale. These include all 11 MedMen locations – one of the state’s leading cannabis retail chains – and has plans to double the number of its stores before the year ends.
Working with Caliva, Mood33 anticipates the growth of sales to more than 400% over the next one year, Schnell said. In the long term, Mood33 looks to expanding nationally and hopes to duplicate the Anheuser Busch and Coca-Cola model by contacting production facilities and networks of state-by-state distribution over the next 10 years.
Cuvelier and Schnell have known each other for many years now, they said, as they noted their mutual interest in the cannabis business that has always kept them in close contact since the recreational market started developing after the 2013 legalization. Cuvelier and Schnell also said that their experiences with building beverage brands were a robust drive to the recent partnership. Cuvelier lamented on inadequate beverage experience within the industry and noted that many persons entering the cannabis-infused beverage market are coming from technology fields or just want to join the green rush. Schnell indicated that Mood33 to has similar difficulties developing the brand.
According to Schnell, Mood33 found Caliva a perfect option as they understand beverage distribution. Starting up, Mood33 would spend much time and resources teaching their distributor how to distribute cannabis beverages, which doesn’t work well when building a brand.
Although the beverage category has been emerging slowly in the cannabis industry, Mood33 and Caliva aim at accelerating the brand’s presence in stores through educating consumers and retailers, and initiating a robust merchandising strategy.
Christopher feels that California is still in the transformation stage from medical cannabis to a recreational market, and dispensaries are starting to restructure their business models to serve a bigger customer base. Over the last one year, Mood33 has been working closely with retail partners to come up with beverage sets through offering co-branded coolers.
Retailers have shifted from the dentist office kind of experience where buyers stay in a waiting room and wait to speak to the budtender one on one. Now, retailers are breaking floor plans up, making dispensaries more open with shelves similar to those in normal beverage and food stores for customers to reach and interact with cannabis products, said Christopher.
This June, Mood33 is also set to launch two SKUs: the CBD heavy peace, which is a 20mg CBD, 2mg THC extract watermelon mint basil flavored drink, and a 10mg THC cherry limeade flavored energy drink with 130mg of natural caffeine from guayusa.
Michael Christopher also noted the tremendous potential home delivery has in playing a more prominent role in the business of Mood33, adding that there are still many California municipalities that are either yet to open licensed dispensaries, or have either banned the sale of cannabis for recreational use.
According to Christopher, home delivery of cannabis beverages in California through Caliva gives the brand a complete edge, more so in these early days where there are long lines in retail shops, high tax rates, and a black market place that the brand is competing against.