Canopy Growth Inks Distribution Agreement for CBD Drinks with Southern Glazer's Wine & Spirits
One month after launching its CBD-infused beverage line Quatreau in the U.S., Canadian cannabis firm Canopy Growth Corporation announced that alcohol wholesaler Southern Glazer’s Wine & Spirits (SGWS) would distribute its CBD drinks throughout the U.S.
In a news release, Canopy said SGWS would initially distribute the Quatreau line of CBD-infused sparkling waters across seven states.
A spokesperson confirmed to THCnet that Arizona, Florida, Kansas, Missouri, New Mexico, Nevada, and Oregon are the first states to see distribution of Quatreau.
SGWS boasts operations in 44 U.S. states and Washington D.C., and the CBD drinks are expected to reach additional markets in the coming months.
"There is strong consumer interest in the CBD-infused beverage category and our distribution network is uniquely positioned to deliver the most efficient and effective route-to-market for CBD suppliers and retail customers,” SGWS chief growth officer David Chaplin said via the release.
Available in four flavors — Cucumber + Mint, Passion Fruit + Guava, Ginger + Lime, and Blueberry + Acai — the sugar-free Quatreau drinks contain 25 calories and 20 milligrams of CBD isolate derived from hemp. It was initially only available via Canopy's online store and shipped to 32 states.
Canopy’s deal with SGWS was aided by its “strategic relationship” with Constellation Brands, a New York-based alcohol manufacturer which owns a 38.6% stake in cannabis firm.
Last month, Constellation and SGWS agreed to expand their distribution partnership. As of April 1, SGWS distributed 70% (up from about 40%) of Constellation’s non-beer brands, including labels like Svedka and Robert Mondavi.
“The leadership team at Southern Glazer's shares our values, priorities, and future-forward view of the category,” Canopy chief commercial officer Julious Grants said via the release. “Together, we are committed to creating an immediate strategic route to market for Canopy's premium CBD beverages."
According to SGWS chief commercial officer John Wittig, Canopy’s CBD drinks portfolio “brings new energy” to the beverage marketplace and “increases the level of consumer interest” in other products that SGWS distributes.
"We are excited to be adding Quatreau as the first CBD-infused beverage in our portfolio,” Wittig added.
While this might be the wholesaler's first foray into CBD beverage distribution in the U.S., the company’s Canadian subsidiary, Great North Distributors, has been delivering legal cannabis products since 2018.
Meanwhile, in the U.S., mainstream retail opportunities for CBD drinks remain limited.
CBD, short for cannabidiol, is the nonintoxicating cannabinoid found in the cannabis family of plants. Advocates say it reduces inflammation, improves sleep, alleviates stress, and helps regulate mood.
However, those claims have not been substantiated by the U.S. Food and Drug Administration (FDA), and the agency has yet to issue final regulatory guidance for products containing CBD.
Most major chain store operators are waiting for that guidance to hit before they commit to stocking their shelves with a plethora of brands. Right now, CBD drinks are primarily being sold online and through the independent channel.
According to market research firm BDSA, sales of CBD drinks are expected to reach $246 million this year, but that could grow to $1.4 billion in 2025 once broader retail channels are opened up.
In the meantime, Canopy appears to be pushing ahead -- albeit without the help of beer wholesalers like Reyes or Manhattan Beer -- as it looks to stake its claim in the still-emerging category.
Additional information is available in the news release below.
Canopy Growth Signs U.S. Distribution Agreement with Southern Glazer's Wine & Spirits for CBD Beverage Portfolio
The Company Will Tap into Southern Glazer's Established Distribution Network to Bring Quatreau, its CBD-Infused Sparkling Water, to U.S. Retailers
NEW YORK — Canopy Growth Corporation ("Canopy Growth") (TSX: WEED) (NASDAQ: CGC), a world-leading diversified cannabis, CBD and vaporization device company, today announced Southern Glazer's Wine & Spirits ("Southern Glazer's"), the world's pre-eminent distributor of beverage alcohol, as the distribution partner for its U.S. portfolio of CBD-infused beverages. This partnership announcement follows the recent launch of Quatreau — Canopy's first line of CBD-infused beverages sold in the U.S. market.
"Through this groundbreaking partnership, we will leverage Southern Glazer's established distribution network to bring our CBD beverage portfolio to retailers and consumers across the U.S. market," said Julious Grant, Chief Commercial Officer, Canopy Growth. "The leadership team at Southern Glazer's shares our values, priorities, and future-forward view of the category. Together, we are committed to creating an immediate strategic route to market for Canopy's premium CBD beverages."
Southern Glazer's will distribute Canopy Growth's CBD beverages, beginning with its CBD-infused sparkling water brand Quatreau™, across seven states, with additional states in the months to come. Southern Glazer's will be selling Quatreau™ through its existing commercial infrastructure, including its industry-leading Proof® e-commerce platform at sgproof.com. Canopy Growth is one of the first U.S. CBD beverage producers to access the nationwide network of a large-scale alcohol distributor to reach consumers across the U.S. at mainstream retail stores. The agreement also showcases the benefits of the company's strategic relationship with Constellation Brands, the global beverage leader.
"This agreement reinforces our consumer-focused approach to identifying emerging growth areas where we can add value for our customers," said David Chaplin, Chief Growth Officer, Southern Glazer's Wine & Spirits. "There is strong consumer interest in the CBD-infused beverage category and our distribution network is uniquely positioned to deliver the most efficient and effective route-to-market for CBD suppliers and retail customers. We're proud to align with Canopy Growth, a company well-positioned to lead this product category with a portfolio of premium, highly desirable consumer brands."
"Innovation in the beverage industry like we are seeing from Canopy Growth brings new energy to the marketplace and increases the level of consumer interest in all our products," added John Wittig, Chief Commercial Officer, Southern Glazer's Wine & Spirits. "We are excited to be adding Quatreau as the first CBD-infused beverage in our portfolio."
Quatreau sparkling water contains 20 mg of premium, U.S. grown hemp-based CBD, in four refreshing flavors: Cucumber + Mint, Passion Fruit + Guava, Blueberry + Acai, and Ginger + Lime. With an MSRP of $3.99 per 12-ounce can, Quatreau is a functional zero-sugar drink that delivers a natural, low calorie beverage alternative. The stateside launch follows the successful 2020 rollout of Quatreau in Canada, where it is now the top-selling ready-to-drink CBD beverage.
For more information about Canopy Growth, visit www.canopygrowth.com.
About Canopy Growth Corporation
Canopy Growth (TSX: WEED, NASDAQ: CGC) is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, we offer product varieties in high quality dried flower, oil, soft gel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Our global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its color-coded classification system and is a market leader in both Canada and Germany. Through our award-winning Tweed and Tokyo Smoke banners, we reach our adult-use consumers and have built a loyal following by focusing on top quality products and meaningful customer relationships. Canopy Growth has entered into the health and wellness consumer space in key markets including Canada, the United States, and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional federally-permissible CBD products to the United States through our First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands. For more information visit www.canopygrowth.com.
About Southern Glazer's Wine & Spirits
Southern Glazer's Wine & Spirits is the world's pre-eminent distributor of beverage alcohol, and proud to be a multi-generational, family-owned company. The company has operations in 44 U.S. states, the District of Columbia and Canada. Southern Glazer's urges all retail customers and adult consumers to market, sell, serve and enjoy its products responsibly. For more information visit www.southernglazers.com. Follow us on Twitter and Instagram @sgwinespirits and on Facebook at Facebook.com/SouthernGlazers.
Notice Regarding Forward-Looking Statements
This news release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable U.S. and Canadian securities laws (collectively, "forward-looking statements"), which involve certain known and unknown risks and uncertainties. Forward-looking statements predict or describe our future operations, business plans, business and investment strategies and the performance of our investments. These forward-looking statements are generally identified by their use of such terms and phrases as "intend," "goal," "strategy," "estimate," "expect," "project," "projections," "forecasts," "plans," "seeks," "anticipates," "potential," "proposed," "will," "should," "could," "would," "may," "likely," "designed to," "foreseeable future," "believe," "scheduled" and other similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive risks, financial results, results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. A discussion of some of the material factors applicable to Canopy Growth Corporation ("Canopy") can be found under the section entitled "Risk Factors" in Canopy's Annual Report on Form 10-K for the year ended March 31, 2020, filed with the Securities and Exchange Commission and with applicable Canadian securities regulators, as such factors may be further updated from time to time in its periodic filings with the Securities and Exchange Commission and with applicable Canadian securities regulators, which can be accessed at www.sec.gov/edgar and www.sedar.com, respectively. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this news release and in the filings. Any forward-looking statement included in this news release is made as of the date of this news release and, except as required by law, Canopy disclaims any obligation to update or revise any forward-looking statement. Readers are cautioned not to put undue reliance on any forward-looking statement. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.