First Cannabis Drinks Expo draws producers from multiple industries to discuss fast-growing market

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After a long day of work, nothing takes the edge off like a glass of … cannabis?

That’s what many attendees at Thursday’s inaugural Cannabis Drinks Expo near San Francisco might have told you.

With cannabis legalized statewide, the trade show at the South San Francisco Conference Center saw cannabis companies and a bevy of other beverage makers and service companies show off their wares. The expo also featured informational sessions that included North Bay cannabis experts.

Krystal Walters from Santa Rosa-based CannaCraft hyped Hi-Fi Hops, a hops- and cannabis-infused sparkling water made in concert with Petaluma-based Lagunitas Brewing Co. The product is available in about 280 dispensaries statewide.

Santa Rosa-based BevZero also had a stand on the floor. The 28-year-old company specializes in dealcoholizing wine, getting some of its product from North Bay producers.

A company representative working the booth said the company had recently begun branching out to cannabis companies, providing them with the dealcoholized liquid that they could then infuse to make cannabis beverages.

Alcohol, cannabis and beverages were also part of a discussion in the afternoon session. It included a panel moderated by Omar Figueroa, a cannabis lawyer with offices in Sebastopol. One topic was the challenges in properly marketing cannabis beverages to stay in line with California guidelines about packaging and marketing and to clearly denote the drinks are not alcoholic.

It featured CannaCraft general counsel Stacy Hostetter and Lauren Mendelsohn, a senior associate at Figueroa’s law firm.

“There are a lot of rules right now that are relatively subjective,” Hostetter said, noting rules prohibiting marketing cannabis to children left some room for interpretation.

State regulators are typically willing to work with companies looking to market cannabis products like beverages, she said.

“If you have a question, the regulators are generally willing to talk to you,” Hostetter said.

She highlighted negotiations CannaCraft entered into with the state when it first marketed and distributed its HiFi Hops beverage, noting regulators were dead-set on making clear to consumers the drink contained no alcohol.

Cannabis beverages made up 5% of the edibles market nationwide, with annual sales of $30 million through November 2018, according to BDS Analytics, a market research firm for the legal cannabis industry. BDS also predicts that by 2022, the U.S. edibles market could reach $3.4 billion, with cannabis beverage sales seeing a jump to $374 million.

Drinks with cannabis and alcohol are banned statewide, but that could change, according to Mendelsohn. The prohibition was partly due to the lack of understanding of how the body responds to both chemicals simultaneously, she said.

“It’s against the law here in California to have a cannabis beverage be an alcoholic beverage,” Mendelsohn said. “I think in the future that might be something that is allowed.”

Figueroa asked the panel about the challenges of expanding a cannabis business to other states where it is legal since the continuing federal prohibition means products cannot be shipped across state lines.

“When you’re looking to become a multistate operator…your product is staying within each state individually,” Hostetter said. She noted regulations varied significantly from state to state as well. “You have to look at every single state with brand new eyes as if you were crossing into international waters.”

Correction: this article has been updated to reflect Krystal Walters’ correct employer

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