Having ticked coffee and mixers off his list of beverage ventures, veteran entrepreneur and investor Mark Mahoney is backing cannabis drinks to power the next phase of his career.
Describing itself as a group of “beverage experts entering the cannabis space as compared to cannabis experts entering the beverage space,” Mahoney and his partners, including experienced brand builder and advisor Lee Brody, unveiled The Drinkable Company earlier this month at the NECANN trade show in Boston. The Danvers, Massachusetts-based venture is aimed at leveraging its collective experience in beverages to break through the burgeoning $426 million dollar THC drinks market.
As an indication of its intent, at the event Drinkable Co. chose to show off cannabis innovations in categories in which its stakeholders already play, like coffee, kombucha, soda (Kaya), iced tea (Groove Tea) and non-alcoholic beer. The decision to avoid jumping into the rapidly expanding THC-infused seltzer space, Mahoney noted, was purposeful.
“We think that’s a monumental difference between us and who’s out there,” he said.
For Mahoney, whose track record as a beverage investor and advisor include brands like Atomic Coffee Roasters, Powell & Mahoney and Creative Juices Inc., the business developed from a personal source. While battling with kidney and liver cancer over the past year, Alan Williams, Mahoney’s longtime partner in frozen drink brand Maui Beverages, urged his friend to reconsider his relationship with alcohol for health reasons. Having witnessed how cannabis helped Williams during his treatment, he began exploring the space first as an alternative to alcohol, and later as an opportunity in which his beverage expertise and network could be applied to help take the category forward.
“We hired an analyst to do a data dump and when they came back and showed us the growth, the velocity, and the potential over the next five years to help people drop off of alcohol consumption, beverages are absolutely perfect for THC to go mainstream,” said Mahoney. “And we said, hey, we can be part of this.”
That approach means avoiding “easy” products like seltzer — though flavored sparkling water is in the works, Brody noted — in favor of tackling more complex formulation challenges, like finding the right dosage of THC for a high-caffeine cold brew coffee (2.5mg, according to Mahoney), or the ideal strain to pair with a non-alcoholic pilsner or IPA. For the latter two, at NECANN Drinkable Co. showcased its collaboration with Salem, Mass.-based cultivator Witch Dr. and beer maker Notch Brewing, in which Mahoney is an investor and board member. Both beers, dubbed “Elixirs 420,” use a sativa-indica hybrid strain and feature 5mg of THC along with 10mg of CBD per 12 oz can.
“We look at that as a beer that you can have out on the boat at the beach at night, with five milligrams, and the same type of onset, efficacy level and offset as consuming alcohol,” he said. “So it’s an alternative space to a non-alcoholic drink or an alcoholic drink, so this is the kind of the third spoke.”
Drinkable Co. will be structured as “vertically integrated as possible,” Brody said, with interests in extraction, manufacturing, distribution, branding and marketing, though less so in retail. Those relationships include an emulsion technology company based in New York, an investment in a Massachusetts growing facility, and a joint venture with Maine-based Cannabis Cured that will include a production facility with access to a canning line and R&D lab.
It doesn’t hurt either that Drinkable Co. is located in the I-95 corridor, which Mahoney called “one of the largest cannabis consuming populations in the world.” New England-based brands like Hi-5 and LEVIA, which was acquired by Ayr Wellness in a $60 million deal last September, and for which Mahoney was an advisor, have helped establish a local market for THC drinks in adult-use states like Massachusetts (+$2 billion in total cannabis sales in 2021) and Maine. Though Drinkable has plans to expand geographically, those plans remain in the offing, said Mahoney, as it will initially focus on Maine to start.
“We want this to be a very much an experiential portfolio of products so dosing will be precise and consistent and predictable, and low dose to the point of 2.5mg to 5mg of THC,” said Brody. “We’re not looking to go extreme by any means.”