The Green Organic Dutchman (TGOD), a Canadian licensed cannabis producer, has formed a partnership with Califormulations to bring CBD-infused beverages to the U.S. market. While the U.S. was previously off-limits to the Canadian industry, the 2018 Farm Bill's legalization of hemp has created an opportunity for companies like TGOD to launch hemp-based CBD beverages in states where regulations allow.
Based in Columbus, Ga., Califormulations was built by a management team that has deep experience in the U.S. and global beverage markets, TGOD CEO Brian Athaide told Cannabis Business Times. TDOG is Califormulations' co-founding investor and strategic partner, along with Symrise, a flavor and ingredients manufacturer. Califormulations offers global branded companies like TGOD the concept-to-shelf support they need to commercialize beverages, from formulation development to in-house pilot scale production and contract manufacturing coordination.
"The focus is on creating a route to market for global beverage companies to be able to do formulation innovation work, as well as have a pilot bottling line and R&D capabilities."
-TGOD CEO Brian Athaide
TGOD will collaborate with Califormulations to launch a line of TGOD-branded, organic, hemp-based CBD beverages, including shots, elixirs, ready-to-drink and sports recovery drinks that help consumers relax, sleep or become energized, depending on their needs.
Beverages are a key growth opportunity for cannabis and hemp companies, Athaide said, and this partnership will give TGOD advantages in many areas.
"First of all, it allows us to get speed to market in the United States, as well as Canada and global markets," he said. "What we'll be doing with Califormulations is creating proprietary beverage formulations, concentrated at their facility in Georgia, similar to the Coke concentrate model, where the concentrate is made at one place … and then shipped around the world to different bottlers. This is very similar, so we'll be creating the concentrate there, and then shipping it to different contract bottlers in different U.S. states, as well as in Canada."
TGOD will launch a combination of THC and CBD beverages through its distribution channels in Canada, Athaide said. In the U.S., the company will work with organic hemp farmers and extractors to get the CBD for its formulations.
"It really is a unique model," Athaide said. "It's different than what the other Canadian LPs have done. A lot of them are investing in their own bottling lines and brick and mortar, or establishing joint ventures with other beverage companies. In this case, we own the brand, we own the IP and trademarks, and we're focusing on what we do best."
What TGOD does best, he said, is understanding which wellness products medical cannabis patients and adult-use consumers want. The company will leave the retail and agriculture side of the venture to those who specialize in those areas.
"We're not really planning on being a retailer," Athaide said. "We have the largest organic cannabis capability in cultivation, so we're looking to be everybody's organic brand for all the retail stores. As we go into other new markets on the hemp side, we really don't see ourselves as being industrial farmers in agriculture. We're working with third-party farmers, helping them with being certified organic. We're really focusing what we do best, which is … understanding the consumer and the medical patient and delivering the innovation and formulation that best meets their needs."
The company's key differentiator, he added, is its commitment to organic products.
"Consumers get organic," Athaide said. "They're looking for cleaner, healthier products [and] healthier lifestyles. Whether you're talking about Baby Boomers or Millennials, it resonates with both."
In Canada, for example, 50 percent of consumers buy organic food products on a weekly basis, he said. "That's what we're laser-focused on. We're the only organic player of scale. There are a lot of other craft producers, but no one doing what we're doing on that kind of scale."
TGOD is eyeing an Oct. 17 launch date for its beverages in Canada to coincide, hopefully, with the federal legalization of edibles and beverages. (Final Health Canada regulations for the edibles and beverage market are expected in June.) In the U.S., the company is still working through rules and regulations on a state-by-state basis, but hopes to have product on the market within the year.
Then, the company will turn its attention globally.
"There are a lot of great products out there, so we want to make sure we can win in that environment, and then we'll take those products globally, as well, into Europe and other places around the world," Athaide said. "The size of the market in the U.S. is very large, and we believe with our organic differentiation and the great-tasting products we have, we've got a right to win."
& Keep Up to Date
Get the latest pot stock recommendations, cannabis news
and industry updates straight to your inbox!