CPG Playbook   //   February 5, 2024

Cannabis beverage brands capitalized on Dry January interest

This year, it seemed like every beverage brand out there was promoting itself as a substitute for Dry January participants to get them through the month-long challenge. This especially included brands selling THC and hemp-infused beverages.

One of the biggest selling points of cannabis-infused drinks is that they allow people to socialize with a drink in hand while they’re abstaining from alcohol. In turn, dispensaries carrying these products anecdotally noticed an uptick in their beverage offerings during the new year period. And individual brands selling cannabis beverages focused on reaching Dry January participants — and say they’ve seen a sales lift over the last month.

One of these dispensaries is New York-based The Travel Agency, formerly known as Union Square Travel Agency. Jesse Tolz, The Travel Agency’s vp of marketing, said “many people are familiar with drinking alcohol socially, so having a parallel format like cannabis beverages can easily substitute what they’re used to whether it’s Dry January or year round.” As people seek alternative options to alcohol, Tolz said cannabis RTDs are a “helpful entry point for those who are cannabis curious, or for those who are looking to transition or complement their smoking or vaporizing of cannabis.”

The cannabis beverage category has exploded over the past few years. In 2021, beverages accounted for about 1% of all legal cannabis sales. That figure has since grown in the markets where cannabis is legalized. For instance, for 2023 — New York state’s first full year cycle of recreational cannabis sales — hemp-infused beverages accounted for nearly 4% of the New York market. One of the reasons for this spike in sales is a growing perception of marijuana being less harmful to health than booze.

And now, many brands tried to build on that momentum by running Dry January campaigns that appeal to health-conscious consumers. This move also coincides with the increasing popularity of Dry January. This January was considered the “driest” since the start of the pandemic, according to data from Bloomberg Second Measure, which cites a 52% drop in observed alcohol sales during the first week of the month.

Cannabis company Ayrloom makes a variety of cannabis products, including vapes, tinctures and edibles. But CEO Eddie Brennan said Ayrloom’s line of THC and hemp-infused canned drinks has become a major focus, citing a lower barrier to entry for people interested in trying cannabis products. 

Prior to launching a cannabis business, Ayrloom’s parent company was making a hard cider beverage called 1911 from its family-owned apple orchard. “Every January, we’d see a decline in [hard cider] sales as people did their Dry January,” Brennan said. “We did feel a threat to the alcohol business as a lot of consumer habits were changing.” This led the company to invest in its beverage operations to reach people cutting back on drinking alcohol, which is gradually becoming a bigger part of the overall business. Now, Ayrloom wants to use moments of increased interest in THC drinks to reach new customers. “From January to January, last year we saw about a 100% year-over-year growth in our DTC business,” Brennan said.

This year, cannabis beverage startup Cann leaned further into marketing during the January and February window — building on a campaign it launched last year that the company has dubbed as “Cannuary.” In 2023, the company saw a 232% year-over-year revenue increase, and is expecting to surpass that rate this year.  

Part of this is also because the business is growing in general, but Cann CEO Jake Bullock said monthly transaction trends are showing increased interest during the “Dry” period. For instance, since launching five years ago, the company has seen lower sales leading up to the holidays that then spike in January — the inverse of alcohol sales’ purchase patterns. This year, Cann saw a 56% uplift in the first 10 days of January versus the first 10 days of December. 

Bullock said that while sales of non-alcoholic beverages are exploding, “some people still want to feel a bit of a buzz.” However, he added the company also has to be careful with the positioning of these products as sober-friendly, as they still contain a controlled substance. 

There are still challenges for cannabis beverage companies, with the limitations of advertising and distribution — meaning they have to get creative by using social media and dispensary partners to promote their canned products. Outside of email and influencer marketing, Ayrloom largely relies on word-of-mouth and press to reach new customers. “Dispensaries aren’t the best vehicle to sell beverages in, but a lot of them in New York have embraced the category,” Brennan said, adding that the current pace of year-to-year sales increase looks promising for long term growth.

One brand that is new to the market is hoping to tap into the growing trend. THC seltzer brand Triple launched on January 5 and the company’s chief operating officer, Will Spartin, said Triple hopes the launch coinciding with Dry January will help it build awareness.

“While mocktails are a great option, some people still seek that buzz and social sensation that coincides with having a beer or a cocktail,” he said. As such, Triple THC is promoting its products as low-calorie, fast-acting seltzers throughout the rollout. 

The cannabis beverage category is still in its infancy, but companies in this space think awareness opportunities like Dry January can help speed its growth. “We can’t really pick on alcohol in our messaging,” Bullock said. “But we can position ourselves as an option during dry or damp January.”