CBD ... the next Scottish whiskey?

Based in the UK, Tenacious Labs is an international cannabinoid group aiming to create a new wave of health, wellness and leisure brands. It has raised $ 10 million so far this year and has an ambitious buy-and-build strategy. It aims to become the world’s leading consumer-centric cannabinoid group and plans to go public in five years.

It is slated to launch in the UK with two new brands in the coming months – Walker & Morland, a CBD brand designed to help people suffering from chronic pain and anxiety; and Hoo Raa, a CBD brand designed to help control mood. These came after the acquisition of the women-focused wellness brand Press Pause and contract manufacturer SZM, both based in Colorado, USA.

These brands sell oils and creams, but Tenacious Labs is equally focused on the food and beverage sectors.

CBD, an oil derived from the cannabis plant that can be used as an ingredient in foods and beverages, has sparked the public’s imagination as an ingredient with numerous health benefits.

Studies show that it can be an effective treatment for epilepsy and may prove to be an option for treating anxiety, insomnia, and chronic pain.

But the CBD industry has been stuck in regulatory confusion lately. In the UK, companies selling CBD products have been told that they have to submit incoming novel food applications by March 2021. Earlier this year, the European Commission abandoned its plans to classify non-synthetic CBD as a narcotic and resumed novel food applications for edible CBD products.

With that regulatory confusion mostly behind us – although some are complaining that there are still unregulated, less effective products that are still on the shelves due to the long time it takes to navigate the novel food process – the industry is more optimistic about its prospects. The Association for the Cannabinoid Industry (ACI) concludes that the UK market is now the second largest after the US, with the most advanced regulatory framework for CBD in the world. It estimates the sector will have annual sales of £ 690 million this year, up from an earlier forecast of £ 526 million.

“The sector is here to keep the post-prohibition style of alcohol”

Tenacious Labs compares the CBD landscape to the post-prohibition era in the US.

“Our USP is to be the investable option in a somewhat wild west,” said Chief Executive and Co-Founder Nicholas Morland, who uses his background in premium discretionary spending to lead the company’s premium food and beverage play. .

He believes that tighter regulations will make the sector safer for consumers and more accessible for investors. “The whole point is to have a mature company in an industry that is here to stay in the post-prohibition style of alcohol,” he said. “The challenge for the industry is figuring out which sector it belongs to,” he said. “We have to be Scotch whiskey, not Thunderbird … This is grown-up stuff.”

He believes that consumers in this sector are more demanding than many other players. “People are clearly signaling that they want this wellness corner of CBD and are seeing it as an interesting new ingredient. But they don’t want what they presented … We shouldn’t assume that consumers want it for granted, that they buy anything at all … It shouldn’t be a Wild West. We shouldn’t see any CBD gums. “

“It’s for relaxing at the end of the day”

Co-Founder and Chief Commercial Officer Adrian Clarke has a background in the premium liquor industry. He revealed that RTD beverages and mixers containing CBD are an important part of the company’s growth plans. “The idea is that you should be consuming CBD every day. Science shows signs of anti-inflammatory properties and that’s why you want to consume it every day and make it part of your routine. “

He therefore sees CBD challenging the premium blender market, rivaling Fever-Tree, and potentially entering the emerging and exciting low-to-no sector as well. The bitter taste of CBD, in his opinion, makes it suitable for blenders versus carbonated beverages. “It’s for relaxing at the end of the day. So instead of a gin and tonic it could be a gin and CBD tonic mixer, or it could be CBD water or a CBD chocolate. “

He added, “I’m very interested in CBD drinks, but not as they are right now.” CBD is a hydrophobic compound, which means it doesn’t mix well with water. But oil-soluble CBD drinks “don’t taste very good” because you drink in a typical carbonated solution and you end up with a drop of oil, “he claimed. “Not only are most of them made in aluminum cans, so there is very little available CBD oil because it covers the can.”

He therefore believes that water-soluble CBD will be a game changer. “There are some very exciting things in this area that have to do with water-soluble emulsions that not only improve the taste and mouthfeel, but also the viscosity of the solution. Then I think that the drinks will really take off. ”