Last month, Pabst Labs debuted the initial launch of Pabst Blue Ribbon Cannabis Infused Seltzer — a lemon flavored drink pumped with 5 milligrams of THC.
To help with the science behind the beverage, Pabst Labs turned to Vertosa, a cannabis and hemp infusion technology company.
"PBR is a heavyweight client because of the legacy of the brand," Harold Han, chief science officer and founder at Vertosa, said. "We have been guiding them and working with them for a long journey."
When companies are looking to add cannabis to their beverages, more mainstream and niche brands are outsourcing for cultivation and infusion. Vertosa says it can help customize bioavailability, taste, color and clarity to fit the specific needs of the companies it works with using its infusion technology and expertise.
Along with this new PBR, Vita Coco, Calexo, Lagunitas Hi-Fi Hops, Viv & Oak wine and Soul Grind cold brew by Caliva all have used Vertosa's technology to develop their drinks. The company infuses more than 100 hemp and cannabis products, including two out of the top three RTD brands in California.
The science behind the cannabis-infused beverages
Vertosa’s emulsification systems for cannabinoids are water soluble, which has long been a challenge for the industry because CBD and THC is hydrophobic. Since cannabis oil does not dissolve in water, Han said the company adds a compound called an emulsifier that is one part oil soluble and one part water soluble. "So in the end, you're creating oil droplets evenly suspended within water," he said.
Han, who has a Ph.D. in surface chemistry, said the technology they use is agnostic to input so it allows for the infusion of CBD isolate or full spectrum THC, but they do have to alter it for the specific beverage they are working with.
"At Vertosa, we don't believe one size fits all. One emulsion simply cannot do all the imagination of our clients. This guy wants to make a transparent drink with a quick onset in a glass bottle and that guy wants to make a cloudy drink with organic certification in a can. So we have to develop different formulas," Han said.
For example, if a client comes to Vertosa wanting to make a cold brew coffee with CBD in an aluminum can, then Vertosa's team will make a recommendation for the formula.
"For any new clients, we don't just assume it's going to work because you never know," Han said. "We perform the compatibility, we perform the stability and we share that data with you so now you have the confidence to launch this product to your consumers."
It takes about two weeks for compatibility and anywhere from two to five weeks for stability tests. In two months, Han said they can make a confident recommendation on what formula fits the client company's needs.
Working with big name brands
Two to three years ago, Han said all the companies interested in doing cannabis-infused products wanted to hire a chemist and do it in-house. But that hasn't worked out well for some.
"Oftentimes, we see this approach fail because this is a complex science, we really dedicate time and energy to make it right. That's all we do at Vertosa. We don't do anything else, only focusing on this," Han said.
A company may have a formula that works, but if they don't have the technology and equipment then it is not transferrable, scalable or reliable, Han said. Because the cannabis-infused food and beverage space is new to the mainstream industry, there aren't many established and trusted supply chains and that's why companies are turning to Vertosa, he said.
"And frankly our economics, they will find out it's usually cheaper than hiring all those chemists, and buying all the equipment and all the ingredients and doing it themselves. It's cheaper, it's more reliable, and that's the thing we want to create for the industry," he said.
He compared it to any other B2B company. For instance, a big organization might hire 20 coders to write the company software, so it will likely look to a company like Oracle or SAP because they already have it figured out and then they just customize to the company's needs and charge a fee. Vertosa offers a similar process.
Vertosa first began talking with Pabst Labs about two years ago because Han said jokingly that "they evaluated every single water soluble company on earth." PBR is one of the first major alcoholic beverage brands to allow its brand name on a cannabis beverage.
"For over 175 years the Blue Ribbon has connected fans across generations around its products, and we think customers, new and old, are going to love the chance to experiment with something different from a brand they trust," Mark Faicol, Pabst Labs brand manager, said in a statement.
Han said Pabst Labs liked how Vertosa tests, uses data and has customization. For the PBR Cannabis Infused Seltzer, it is targeting more of a low dose drinker since it is 5 milligrams of THC per can. In a social setting, consumers can drink several cans without it being too much for adults, similar to beer, Han said. Vita Coco, which was announced last year, has 20 milligrams of CBD per can, but CBD doesn't get consumers high.
"I think the most valuable thing for those clients, especially for big clients, existing brands coming into cannabis, they really need guidance or insights regarding the whole industry, because they may know the beverage or alcohol industry, but they're not necessarily experts in cannabis. They're looking for guidance and so I think that's where Vertosa shines," Han said.
Expanding and handling regulations
PBR's announcement was big news because across the food and beverage category, large companies like Coca-Cola and Monster Beverage have shown interest in CBD, but most are waiting for FDA approval. The 2018 Farm Bill allowed hemp and its derivatives to no longer be classified controlled substances, but it is still federally illegal to add CBD to food and drink.
However, cannabis in food and beverage is legal in a growing number of states, including where Vertosa is based: California. Han said it is difficult to be in the cannabis industry at this time, with challenges in funding, banking and advertising, but he believes federal legislation will be passed, it is just a matter of when.
"We have to be creative. We have to be cautious. However, in my eyes, I see this as an opportunity," he said. "We're preparing for the booming of the industry and I think all the difficulties are becoming an advantage in a way. If we see the result, we are leading the industry and having this competitive advantage."
Across the border, cannabis-infused food and beverage is now legal in Canada. Canopy Growth has sold more than 1.5 million cans of its THC-infused ready-to-drink beverages and the company recently announced it will be launching cannabis-infused beverages in California and Illinois next year.
Despite the competition, Vertosa recently announced it was expanding the company into Canada with a partnership with Vivo Cannabis.
Right now, Vertosa is playing catch up in Canada, learning the regulations there and setting up shop. Han said Vertosa is hoping to do in Canada what it is already doing in California.
Vertosa is "trying to drive the whole industry to get better because we are reliable ingredients for them to infuse," he said. "I would say the same trend should happen in Canada."