Ceria Brewing Co. launched Grainwave — a new line of THC-infused, zero-alcohol beer — in Colorado in December 2018.
In four hours, the product sold out.
The company has maintained that momentum ever since its launch. Co-founder Keith Villa, a Molson Coors veteran and former brewmaster behind Blue Moon, told Food Dive the company has seen sales growth ranging from 20% to 60% each month, and the company is now expanding into California and Nevada markets.
"From the start, we've seen a lot of great growth for our brand," Villa said. "The main reason for launching Ceria was to bring cannabis to consumers in a socially acceptable format."
"We feel we're way ahead of everybody, and we're setting a high bar for other people to follow."
Co-founder, Ceria Brewing Co.
As an early mover in the trendy cannabis food and beverage sector, Ceria has an advantage in a fast-growing space that doesn't have many big players in the U.S. yet. The global cannabis market stands at $150 billion and legal sales are expected to grow to represent 77% by 2025, according to a white paper from Euromonitor earlier this year.
"We've offered consumers something that is very historic in nature because at no point in time in the near past has cannabis been legal in a drinkable form like a beer and tasted this good," Villa said. "We feel we're way ahead of everybody, and we're setting a high bar for other people to follow."
The company has attracted attention from both consumers and businesses. In March, Growpacker Inc., a contract manufacturer of THC- and CBD-infused edibles and beverages, launched its brand incubator and accelerator program for California. The first participating company was Ceria. Stephen Boyd, CEO of Growpacker, said at the time the manufacturer would work with the brand as it moves its momentum across the country and establishes a presence in the Golden State.
But the cannabis space still faces challenges. Last December, hemp and CBD became legal with the signing of the Farm Bill. The FDA quickly announced cannabis in food and beverage remains under government regulation.
The FDA held the first public hearing on the substance in May, but that left many unanswered questions. Analysts still say it could take years to establish a legal path to market for food and beverage products with cannabis compounds, but companies like Ceria are in a good place for when regulations do come down.
"Based on consumer demand, FDA has recognized that consumers are looking for these types of products in the marketplace and they are willing now to work with industry stakeholders to develop a predictable and lawful pathway to market these products," Brian Sylvester, special counsel at Foley & Lardner, told Food Dive earlier this year.
Some big name beverage brands have started to make investments in the space, but many still view cannabis as a risky investment because of complicated regulations in the United States.
Villa said regulation has presented challenges for his growing business. The company cannot transport finished goods over state borders, which makes it difficult because it has to set up shop in every state in which it does business. Advertising laws are also restrictive.
But he said Ceria has legal counsel who are experienced with those laws in every state they operate. He hopes there will be federal legalization sometime in the next two to five years.
"We are following every regulation to the T. We're not taking any shortcuts because in our view, Ceria is way out in front of everybody," Villa said. "So we do want to make sure that we follow all the rules in every state."
But the company is also tapping into other popular trends. In July, Ceria announced it would be entering the nonalcoholic beer market with non-infused Grainwave Non-Alcoholic Belgian White Ale.
As consumers have turned away from traditional beer, low- or no-alcohol brands have gained popularity among consumers. Brewers have reported sales growth in their low- or no-alcohol portfolios and predict more to come, so it made sense for Ceria to diversify its portfolio with a non-infused product.
"We're seeing a shift in the marketplace where consumers are choosing to become selectively sober or they call themselves sober curious," Villa said. "We're seeing the demand for nonalcoholic products really increase a lot and so this is giving us a big opportunity to expand our brand in both the THC world and in the [nonalcoholic] world."
He said he wants his THC-infused beverage business to expand to every state where it's legal, and thoroughly explore Canada to see if it's worthwhile for them. In December, Canada will allow some cannabis-infused products to hit shelves.
Overall, Villa has big goals for the brand in the years to come.
"When you have a great-tasting product with innovative solutions to put active ingredients in it, and you have a strong brand that resonates with consumers, I think your chances of being a successful startup go sky high," Villa said. "And for us, we feel very strongly that people love our brand."