At 11 years in business, Colorado-based Keef Brands is already a veteran of the nascent cannabis beverage category. As the company, which began in 2010 as an infused edibles manufacturer, has grown alongside the recreational marijuana industry, it’s now preparing to begin its next act as an international brand driving the growth of THC beverages through innovation and expansion.
“It’s very well known that there have been multiple false starts on anointing beverage as the next big thing in cannabis,” said CEO Travis Tharp said. “And if you look at even now, over the last year and a half, we’ve had tremendous growth and are outpacing the rest of the market, but we’re still less than 1% of the overall market. And that’s really exciting. I think that’s what gets us up out of bed every day, because we know we have so much opportunity and we’re really only in the second inning of this.”
Having initially joined Keef as COO in 2017, Tharp was appointed president and CEO of the company in January, taking the reins from its co-founder (and Tharp’s childhood friend) Erik Knutson, who remains with Keef as chairman.
Tharp’s ascension to CEO was long planned, he said, with his tenure as COO serving as a training ground for learning the CPG and cannabis industries . Knutson, he said, chose to step down in order to shift his focus towards shaping U.S. cannabis policy as a founding board member of both the U.S. Cannabis Council and the American Trade Association for Cannabis and Hemp (ATACH). Eight months into his tenure, Tharp said he is now focused on scaling Keef by targeting new markets and consumers.
Keef’s products are currently available in seven states plus Puerto Rico, including Colorado, California, Arizona, Oklahoma and as of this year Missouri, Maine and Ohio. The brand is expected to launch in Ontario, Canada this month through a partnership with BevCanna Enterprises and is also aiming to build out its footprint in the Northeast and larger markets such as Illinois.
“We used Ohio and Maine as a focal point to bring the product lines out to the East Coast and we worked really hard to get them all out before the summer.,” he said. “The Maine market has been wonderful to us, they’ve really been accepting and we’re excited about how the brand is being received out there on the East Coast and just want to lean into it.”
Keef produces a number of THC-infused beverage lines, including single-serve 10 mg products and multi-serve 100 mg and “Xtreme” 500 mg bottles. The brand’s lines include classic sodas (in Purple Passion, Orange Kush, Bubba Kush Root Beer, Blue Razz and Original Cola flavors), energy drinks, sparkling water, mocktails, and flavored still water, as well as tinctures and vape oils.
According to a report by market research firm Headset, Keef earned $2.9 million in U.S. sales in Q1 this year. In California, Keef ranks among the top three brands overall in the cannabis beverage category, alongside CANN Social Tonics and Lagunitas Brewing Company’s Hi-Fi Hops line, and combined the three companies account for 22% of the category’s total dollar sales. However, the field is fast expanding as smaller brands gain market share.
Keef is now also innovating beyond the category standards of THC and CBD through beverages containing different types of cannabinoids, including THCv (a psychoactive ingredient which reportedly promotes energy and can help suppress appetite), CBG (a non-psychoactive compound with apparent antibacterial, antimicrobial and anti-inflammatory properties) and CBN (helpful as a sleep aid). In July, the company launched an extension of its Life H2O bottled water line in Colorado with three new flavors, each featuring one hero cannabinoid: Cranberry Lime ENERGIZE +THCv, Strawberry Kiwi BALANCE +CBG and Blueberry Lemon SNOOZE +CBN.
According to Tharp, Keef has been cautious in how it promotes the functional benefits of its new Life H2O drinks as these cannabinoids have not been approved by the FDA and the reported effects are attributed to independent studies. However, even as many mainstream consumers are still learning about the differences between THC and CBD, Tharp said it’s important for Keef to be ahead of the curve on embracing new formats and doing the heavy lifting when it comes to education.
Looking forward, Tharp said Keef is currently cash-flow positive and “growing at a rapid clip.” While cannabis beverages still remain only 1% of the U.S. cannabis industry, per Headset, sales are on the rise. Tharp noted that the pandemic in particular led more consumers to experiment with different formats for cannabis and as markets reopen the opportunity to continue drawing in new consumers is expanding.
“It’s really interesting to see how all of those will continue to build on each other and see how any prospect of semi-legalization at a federal level to full legalization plays out,” he said.” I mean, it’s going to take a lot of time, but it’s going to be a fascinating next few years.”