Jones Soda is entering cannabis with the launch of Mary Jones, a collection of cannabis-infused sodas, syrups and gummies that the premium soda maker said will further distance it with products that its Big Soda competitors wouldn't touch.
"We do things all the time that Big Soda couldn't possibly pull off," said Bohb Blair, Jones Soda's chief marketing officer. "We honestly have a brand that is leverageable in this space and [the soda companies] do not, even legally. You have to be an adult brand to bring your brand marks into cannabis."
The new products from Jones, which counts the vast majority of its customers as adults, cover three categories: sodas, syrups and gummies. The sodas will debut in the company's four most popular flavors of Root Beer, Berry Lemonade, Green Apple and Orange Cream with 10 milligrams of cannabis for a 12-ounce bottle, and 100 mg for a 16-ounce, 10-serving can.
The syrups, which have 1,000 mg of cannabis per 4-ounce bottle, are designed to add to other foods or drinks — Blair said he recently tried it on ice cream. And the gummies with 5 mg of cannabis are shaped like mini Jones Soda bottles.
The company plans to launch its cannabis products in California on April 1. Jones picked California because of its mature legal cannabis market worth about $4 billion, allowing the company to benefit from other businesses who have figured out how to operate in the category while tapping into infrastructure already in place. In addition, the state's population of nearly 40 million people gives Jones a sizable test market to see how its products are doing, Blair said.
"If we can take advantage of all the knowledge going on in California, ... we know we've set ourselves up for really a great path of success as we go into the Midwest and go east as we expand into all legal states," he said.
So far, 37 states and Washington, D.C., have approved marijuana for medical use or cannabis programs, with 18 states and the District enacting legislation to regulate cannabis for nonmedical purposes.
A successful launch in cannabis-infused beverages and edibles could eventually eclipse sales in Jones' iconic soda line within a few years, Blair said. Last year, Jones posted revenue of $14.8 million, an increase of 24% from the prior year. Jones plans an aggressive expansion of Mary Jones, with the company expecting the brand to be sold in all markets where recreational cannabis is legal within the next year.
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With cannabis still illegal on the federal level, PepsiCo and Coca-Cola have eschewed drinks made with the ingredient. The closest either company has come is through PepsiCo's Rockstar Energy offering infused with hemp seed oil designed to help consumers relax.
Seth Goldberg, a team lead for Duane Morris’ cannabis industry group, said more companies are recognizing beverages as a way to expand their product offerings and connect with a new segment of consumers. Unlike smoking and vaping marijuana, consuming it through a drink is more publicly accepted and allows the individual to enjoy a smaller amount of the drug — making the liquid form more appealing to beverage and cannabis consumers alike.
"These big companies understand that it's only a matter of time before it's nationally legalized, and they're positioning themselves," Goldberg said. "Given the size of the beverage industry, it really means that there's huge upside for cannabis in terms of it becoming a drink."
Alcohol makers have shown a greater willingness to position themselves for the growth of cannabis-infused products that industry watchers have long predicted would come.
Molson Coors has Truss USA, a joint venture with Canada-based Hexo that has launched a line of sparkling, nonalcoholic CBD drinks called Veryvell. Canopy Growth, which is nearly 39% owned by Corona brewer Constellation Brands, has its own line of cannabis-infused beverages and CBD waters.
AB InBev and Tilray, a producer and distributor of cannabis, have partnered on non-alcohol beverages containing THC and CBD. And a Boston Beer subsidiary is partnering with Ontario-based manufacturer Peak Processing Solutions and grower Entourage Health on nonalcoholic cannabis-infused beverages in Canada.
Jones' decision to enter cannabis should give it an early advantage as more states legalize the drug for nonmedical purposes and other companies inevitably decide to introduce their own products incorporating the ingredient, Goldberg said. Jones will be able to establish brand loyalty with consumers who are going to be early adopters of cannabis beverages, while allowing people in those areas where it can't yet be sold legally to familiarize themselves with the product.
"There's no reason to believe that the product won't do very well for Jones," Goldberg said. Jones can build up scale and distribution and it "may be more competitive when some of the bigger companies enter the market."
Mary Jones is digging in by tapping into many of the same traits that have given Jones' soda a loyal following — including unique flavors, a similar package design and bottles adorned with photographs submitted by consumers — but it has enough differences that enable it to stand on its own. The Jones logo is largely the same, except for the "N" which is backward, and the dosage of how much cannabis is inside each bottle.
Blair said CEO Mark Murray and other executives have been looking for ways to expand the brand equity beyond its signature offering. Cannabis made the most sense because of the brand's reputation, opportunity to expand its customer base and a flavor profile that transfers over well to the psychoactive drug.
Jones briefly explored CBD, but the ingredient has become commoditized and now is found in multiple places, while its association with self-care and health benefits strayed from the perception people have of a soda company.
"For us, our full-flavor products aren't necessarily positioned for a health claim," Blair said. "If you imagine Jones going into something, [cannabis] is the most natural thing you can think of."
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