Vertosa CEO Talks Infusion Technology, Future of Beverages
One of Ben Larson’s favorite books is “The History of the World in 6 Glasses,” a New York Times bestseller that looks at human history through the lens of beer, wine, spirits, coffee, tea and soda.
Larson, the CEO of Vertosa, a leading cannabis infusion technology company, believes THC and CBD-infused beverages could eventually become the seventh glass.
“Our entire culture has continually developed around beverage,” he told THCnet during a recent interview. “Humans naturally gravitate toward beverages and find them less intimidating. So, while infused beverages are a small percentage of the overall industry right now, it’s only because we’re in the developmental phase.”
Indeed, according to Colorado-based research firm BDSA, infused beverages make up roughly 5% of the total cannabis edibles market, which itself accounts just about 15% of total dispensary dollar sales.
However, the overall edibles segment is growing about 20% year-over-year, and over 70% of cannabis consumers are currently purchasing food and beverage items infused with cannabis. Meanwhile, one-third of cannabis users prefer edibles to other forms of marijuana such as flower or vapes.
BDSA also projects that sales of all cannabinoid beverages could reach $1.7 billion by 2024, and notable manufacturers such as VitaCoco and Brew Dr. Kombucha have already begun dabbling in the CBD space.
As more companies look to expand their portfolios, and as marijuana mainstreams, Vertosa has positioned itself to help both existing cannabis firms and established CPG players introduce cannabinoids to millions of new consumers.
“We’ve seen a lot of first-time consumers quickly pick up a glass and try it, whereas they would never smoke a joint or pull from a vape,” Larson said. “And so that in and of itself tells me about the opportunity.”
Vertosa itself sits at the intersection of the cannabis industry and the food and beverage sectors. Its mission is to master the art of emulsion and to make infusing products “as easy as ordering any other active ingredient.”
“When we partner with a brand, we can be a part of their ideation process and we can actually get involved at the product development phase,” Larson said. “But the long-term goal is really for us to become their bulk ingredient provider.”
In that way, Vertosa goes beyond simply selling a liquid solution to beverage or cannabis companies. Larson and his team can actually help formulate new products and connect brands to co-packers or other key partners throughout the supply chain.
“We like to get involved really early,” he said. “At the end of the day, we might just be putting CBD or THC on the label, but it starts the conversation and starts the inspiration of how we can take products further.”
According to Larson, Vertosa works with vertically integrated cannabis companies that supply their own CBD or THC oil, and it also has a dedicated procurement team that is tasked with sourcing cannabinoid oil for nonlicensed partners.
It then uses a proprietary process and sophisticated machinery to transform the oil into a stable and water-compatible ingredient.
“We are very focused on the science of the interaction between water and oil,” Larson explained. “The oil extracts from the plant are highly viscous and hydrophobic. We take those extracts and make them as friendly and dispersible in water as possible. And what that does is make it very easy for the body to absorb and process those oil droplets, so you're getting the cannabinoids faster and more reliably.”
Vertosa’s cannabinoid emulsion systems, and its understanding of how to properly formulate ready-to-drink beverages infused with CBD or THC, is what has helped the company land $6 million in seed funding led by venture firms AFI Capital and Welcan Capital, which both have other cannabis industry investments.
Larson said Vertosa is working with about 75 clients ranging in size from early-stage startups to larger Canadian cannabis firms.
The company recently inked several new partnerships, including deal with Wunder — a line of THC-infused sparkling beverages — and Rhythm, a line of CBD-infused seltzers.
Over the long-term, Larson believes THC-infused beverages present the biggest opportunity because of the psychoactive experience associated with their consumption. However, the increasing popularity of CBD gives existing beverage makers an opportunity to broaden their lineups.
“CBD will be really successful when it is considered a wellness ingredient that can work synergistically with all these other ingredients out there,” Larson said.
According to market research firm IRI, sales of CBD edibles and beverages were up 130% at mainstream retailers over a 52-week period ending June 14, 2020.