Wunder Enters the THC-Infused Beverage Game
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Now that recreational cannabis has become legal in more states, THC-infused beverages have emerged as an alternative to booze — and complementary to cocktails.
Wunder is one brand shaking things up in this corner of the cannabis market. The brand touts itself as "low-dosed, low-calorie and all-natural" for the health-conscious. It also serves an option for those who would like to explore THC to relax, but eschew traditional ways of getting high, such as joints and edibles.
"We believe cannabis-infused beverages are the future because of the innovation that’s taking place with functional drinks and because of the way people relate culturally through drinking," Wunder co-founder and CEO Alexi Chialtas told Benzinga.
The company launched its first line of products last year exclusively with San Francisco-based dispensary The Apothecarium. And since then, there's been no shortage of competition.
Pabst Blue Ribbon — the 19th Century beer that is now America's largest brewer — debuted its cannabis-infused sparkling water at certain cannabis shops in California. The drink doesn't contain beer or alcohol, but — like Wunder — a few milligrams of THC.
And one of the largest deals ever made in the cannabis space was between spirits giant Constellation Brands, maker of Modelo Especial beer and Svedka vodka, and Canopy Growth. Constellation owns a 39 percent equity stake in the cannabis company and has big plans for a beverage rollout.
There's also SHOKi, Calexo, House of Saka, Artet and celebrity-backed Cann.
Despite the long list of rivals, Wunder's timing is right: Grand View Research projects the CBD-infused beverage space will reach $2.8 billion by 2025. And by 2029, the global cannabis market could inflate to $130 billion, with CBD beverages making up a significant chunk of business.
Read on to hear Chialtas' thoughts on this growing trend, how his previous life in tech and gaming set the stage for his work in cannabis and what the future holds for Wunder now that recreational weed is becoming legal in more states (i.e. New York).
BZ: What inspired you to launch a THC beverage as opposed to traditional edibles (gummies, cookies etc.)?
AC: We were quick to identify the national trend around people drinking less alcohol, so our challenge was to create a beverage that mimics the positive aspects of alcohol without the negative effects.
We achieved this with Wunder Sessions, which is our line of low-dose infused beverages that have a unique cannabinoid combination of 2mg Delta-9 THC, 2mg Delta-8 THC and 4mg CBD. Delta-9 is the THC we’re all familiar with. It gets you “off the ground” so to speak. Delta-8 has around half the psychotropic potency of Delta-9 and produces an in-your-body effect. CBD rounds out the experience, ensuring the overall effects are soulful. Our culture encourages drinking for socializing and celebrating, WunderR Sessions turns that familiar ritual into something more lucid and positive.
My colleague Jelena Martinovic wrote about how cannabis businesses are beginning to hire beverage professionals. What's your take?
My take is that it further proves that cannabis-infused beverages are the future. The legal cannabis industry is undergoing maturation and the same goes for the infused beverage category. As this evolution takes place, we’ll continue to see professionals entering the space from mainstream industries, including beverage. The fact that these cannabis businesses are able to recruit these individuals demonstrates how hot the category is, how well-funded the business must be in order to meet their salary requirements, and how stigma around cannabis continues to wane.
What’s interesting to me is how experience from a variety of industries will get cannabis and the beverage category to where we think it can go. For example, my background before Wunder was in consumer tech and social gaming, specifically with Zynga and Warner Brothers. It was my previous life in tech and gaming that set the stage for my work in cannabis. Startup culture really primed me to handle fast-paced environments where it’s critical to not only think on the fly, but to also build structure where it previously didn’t exist. My time at Zynga centered on creating experiences for people, and that’s exactly what cannabis is to me — making meaningful moments.
The drinks taste like a flavored seltzer. Any clue you can provide on the making-of process, or objective you had at the outset to make sure Wunder had a sparkling water feel?
We create functional beverages that provide a mindful alternative to alcohol, so we set out to develop our first line of low-dose beverages, Sessions, to be lightly sparkling for a festive vibe that promotes socialization. Our bold flavors — Blood Orange Bitters, Lemon Ginger and Grapefruit Hibiscus — are both delicious and widely appealing, showing how cannabis beverages have evolved and now have the sophisticated flavor profiles of craft cocktails.
Is Wunder VC-backed or bootstrapped?
Since day one, Wunder has been decidedly homegrown. By working with investors and advisors from our own network, we’ve remained nimble and focused on developing a compelling brand with products that meet the needs of consumers over the long-term. Our expert partners have years of experience building brands and beverages, so we’ve been fortunate to move quickly from concept to execution while navigating a regulated market.
New York's Legislature recently agreed on adult-use legalization. How will this change the game for a West Coast beverage company like WUNDER?
The legal New York cannabis market is imminent and it’s exciting. Obviously, it will open up a new market, and it will unleash a flood of new brands that will bring a distinctly New York-savvy branding point-of-view. For Wunder, we’re always looking at what’s next, which is why we just launched our high-dose line of beverages called Higher Vibes that are the first beverages on the market with 10mg Delta-9 THC and 10mg Delta-8 THC. These drinks target seasoned cannabis consumers who seek unique cannabinoid experiences.
When it comes to expansion, New York and the East Coast are absolutely on the horizon and we’ve enjoyed meeting single-state and multi-state operators as we look for the right partners to join us for this next chapter of WUNDER. It’s an exciting time for cannabis and for infused beverages.
What about that excise tax of 3 cents per milligram of THC? Will this make it harder for businesses to compete with the illicit market?
We’re not in the business of competing with the illicit market because it will always exist. Instead, we’re in the business of educating consumers so they know what they’re buying and how it will make them feel and, hopefully, improve their lives. If there’s one thing I’ve learned about an emerging industry is that over-taxation and over-regulation slows innovation and makes it difficult for small businesses to compete. For anyone who’s interested to dig deeper, I think it’s telling to look at how much consumers pay in taxes for products like alcohol versus cannabis.