A new acquisition in the beverage industry is introducing yet another notable brand to the growing CBD market. But rather than one more soda or water brand trying to dip its toes into cannabis, the money play comes from the CBD side of the equation.
According to CNN Business, Toronto-based hemp company Heavenly Rx recently closed a deal to acquire more than 25% of the soft drink brand Jones Soda. The company plans to debut CBD-infused sodas through the legacy brand known for its bright colors, adventurous flavors, and user-submitted photo labels.
Jones was founded in the mid-1980s in Seattle, and eventually garnered a national fan base thanks to its unique marketing, approachable brand identity, and off-the-wall flavors like a Thanksgiving dinner soda. But as consumers continue to move away from sugar heavy beverages with each passing year, the company has recently seen its profits (and stock prices) take a turn for the worse. At this tenuous time for soda sales, CBD’s seemingly endless popularity could be a saving grace.
"It's a good product extension for the Jones brand to drive growth," Jones CEO Jennifer Cue told CNN Business.
And with the Food and Drug Administration on its way to nailing down CBD regulations for commercial products, that feeling is mutual from Heavenly Rx CEO Paul Norman, who said he is confident that the Jones acquisition and product expansion could propel Heavenly Rx to the forefront of the emerging cannabidiol market.
"It's a fabulous brand," Norman said "It's rebellious. It's got a great history behind it… The category is going to grow to north of $20 billion.”
In addition to the 25% stake in Jones acquired late last week, Heavenly’s purchasing agreement will also give Heavenly Rx first dibs on buying an additional 20% of the company, and allow the Toronto hemp brand to buy 6% more on the open market, clearing the way for Heavenly to procure a controlling stake in the soda company.
But even if Heavenly takes majority control of Jones, the brand’s current plan is to wait for final FDA regulations to be announced before debuting any hemp-infused products. Once that time comes, though, it won’t be long until we see CBD sodas in every neon color imaginable.
“If it all comes to fruition as everyone thinks it will,” Cue said, “it could be a huge category and we don't want to miss out on that."
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