Michigan's cannabis market is demonstrating robust growth and versatility, particularly with an annual sales figure that surpassed $3 billion last year, making it one of the largest in the United States. However, a particular segment within this broad market—THC-infused beverages—though gaining traction nationally, remains relatively underexploited in Michigan.
Despite representing a mere 0.34% of the state's $286.8 million in recreational cannabis sales last month, local entrepreneurs see significant potential. Emerald Canning Partners, a Mount Clemens-based venture formed by cannabis producer Pleasantrees and Blake's Hard Cider Co., is strategically focusing on this nascent segment. The company recently invested $6 million to establish a 20,000-square-foot canning operation at the old Gibraltar Trade Center, aiming to tap into the growing demand for liquid cannabis products.
Michigan's per capita cannabis sales are among the highest in the nation, with more than $300 spent annually per person. In contrast, THC-infused beverages and tinctures have only scratched the surface of this burgeoning market. Nationally, THC beverages are becoming more popular as consumers look for alternatives to alcoholic drinks, driven by a trend towards healthier lifestyle choices and the novelty of cannabis-based products.
In response to these market dynamics, Emerald Canning Partners plans to not only contribute to but also stimulate the Michigan market by aiming for a 2% to 3% market share, which would equate to roughly $60 million to $80 million in sales based on last year's figures.
One of the primary hurdles faced by Emerald Canning is the restrictive regulatory environment in Michigan, which limits the sale of THC-infused beverages to licensed dispensaries. This contrasts sharply with states like California or Colorado, where such products can also be found in grocery stores and other retail locations. Matt McAlpine, president of Emerald Canning, emphasized the importance of accessibility, suggesting that to effectively compete with alcohol, THC beverages need to be sold alongside it in conventional retail settings.
At their Mount Clemens facility, Emerald Canning replicates traditional beverage production techniques but with a cannabis twist. The process begins with reverse osmosis water, crucial for maintaining product integrity given the sensitivity of THC to oxygen exposure. Emerald Canning uses advanced technology to minimize oxygen levels in their beverages, ensuring a high-quality end product. The facility is equipped to produce a variety of THC-infused beverages, including teas, seltzers, and ciders, each tailored to different consumer preferences and potencies, ranging from mild (2 mg of THC per can) to more potent offerings (up to 20 mg per can).
Despite the slow regulatory pace, which currently hampers quicker market entry compared to traditional beverages, Emerald Canning is optimistic about its future. The company has already started to increase its operational capacity, currently producing about 400 cases daily with plans to double this output. This scale-up is part of a broader strategy to not only meet existing demand but also to prepare for potential regulatory changes that could broaden their market.
In addition, Emerald Canning is continuously innovating its product lineup. It recently introduced a new 7.5 mg THC seltzer named Buzzn for Lume Cannabis Co., which has been well-received in dispensaries. The company also plans to launch THC-infused drinks for a national beverage brand soon, further diversifying its portfolio and outreach.
As Michigan continues to adjust its regulatory framework for cannabis, companies like Emerald Canning Partners are positioning themselves at the forefront of the THC beverage market. With substantial investments in production capacity and a keen eye on consumer trends, Emerald Canning aims to not only capture a significant share of Michigan's cannabis market but also to set the standard for what cannabis beverages can offer to both seasoned consumers and those new to cannabis.
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