Last September, we reported on the loophole that launched an industry: namely the 2018 Farm Bill, which left the door opened for a federally legal, hemp-derived cannabinoid (CBD or THC) drink category to emerge in conservative-leaning states with restrictive, if not outright hostile, cannabis laws. But a year later, lawmakers in places like Tennessee, Texas and Arkansas are seeking to rein the industry back in, or take it out completely. 

Tennessee – The Volunteer State's new hemp regulations are roughly in line with what Nashville-based drink maker Better Than Booze told us they were asking for last year: as of July 1, purchases are restricted to consumers aged 21 and over, and product must be sold in child-proof packaging and stored behind the retail counter. An additional 6% tax on all hemp-derived cannabinoids (CBD, Delta-8 THC, Delta-9 THC) has been implemented as well, on top of the state's existing 7% sales tax. Any retailers that wants to sell products with hemp-derived cannabinoids must acquire a license from the state agriculture department by Jan. 1, 2024. Recreational and medical marijuana remains illegal. 

Texas – Further south in Texas, the situation remains in flux. The Department of State Health Services made headlines in October 2021 by categorizing all THC isomers as Schedule 1 controlled substances, but no final ruling has been made since a group of hemp companies asked for and were granted an injection against the ban, which has been appealed. Each side was given the opportunity to argue its case (with no new evidence) at a hearing held last Tuesday, but the case is expected to churn on for several more months and likely end with a judgment from the State Supreme Court. 

Arkansas – There's more legal action in Arkansas, where state representatives passed Act 629, a move to supersede federal law by banning the sale of products containing Delta-8, Delta-9, Delta-10 and other THC isomers. But the issue is now in the hands of the court after four hemp-related businesses filed suit a federal complaint in Arkansas claiming that the law is too vague to be enforceable, to which a judge agreed in granting a preliminary injunction last Thursday blocking the law. 

But even as individual states implement their own controls, the Drug Enforcement Administration (DEA) -- which declared both Delta-8 and Delta-9 THC as illegal controlled substances earlier this year -- may be taking it out of their hands all together.

Why did vitamin K2 disappear from Western diets? And how is this absence impacting our health? Join our panel of experts as they plunge into the fascinating world of vitamin K2. At this free webinar, you’ll learn how K2 is the missing piece for bone health around the world and how you can help consumers get more of it. Learn more

Non-alcoholic beverage sales accelerated slightly over the two-week period ending August 26, with volume sales picking up pace while pricing increases slowed, according to the latest analysis of NielsenIQ data by Goldman Sachs Equity Research.

• Dollar sales in U.S. retail rose 7.9% in the two-week period, compared to +7.3% in comparable four-week and +7.8% in the 12-week periods. Volume growth was up 1.8% and average pricing climbed 6.2%.
• CSDs lagged behind the overall beverage industry, up 5.8% in the two-weeks as volume sales fell -4.1% (average pricing of +10.2 helped offset the volume dip).
• In energy drinks, Monster Energy’s acquisition of Bang appears to be a drag on its overall growth, at least in the interim. The category leader reported dollar sales down -1.5% in the period, compared to +10.3% growth for the two weeks ending August 12 when Goldman Sachs listed the two companies separately. However, the deal also boosted Monster’s 52-week dollar sales revenue to around $7.9 billion (without Bang it sat at around $7.3 billion in the past report).

Supplying Demand, which online business profiles name as the parent company of Liquid Death, reported still water sales up 28.8% to around $47.5 million. Its sparkling water business appears to be almost double the still water line: up 89.8% in the past year to $99.5 million.

Even though water flavor enhancer MiO contains artificial flavor ingredient malic acid, Illinois judge Sharon Johnson Coleman agreed to Kraft Heinz’ bid to toss the misleading labeling suit (hint: the bottle omitted any mention of artificial flavors) as well as a similar complaint against Crystal Light drinks on the same day, filed on behalf of the same plaintiff. 

• Controversy stems from federal definitions surrounding the ingredient, which Kraft claims the FDA defines as a flavor enhancer, not an artificial flavor. 
• Though the product label denotes that it is made from natural flavors, the complaint hinges on the lack of any mention of artificial ingredients, which it claims is misleading to a reasonable consumer. 
• The judge however did not agree, stating that making the determination between a flavor and flavor enhancer, in an advanced stage of litigation, “is inappropriate” and dropped the claims altogether.

Florida-based Splash Beverage Group, which includes Pulpoloco Sangria and SALT Tequila in its portfolio, has signed a letter of intent to acquire Texan vodka distillery Western Son, including its over-150K square foot production and distribution campus.

• The shipping campus will establish a centralized operations hub for Splash’s existing brands in addition to any future acquisitions, creating logistics cost savings in favorable shipping lanes, reducing freight expense and ultimately increasing margins, according to a statement.
• Splash is aiming to rapidly develop early-stage brands already in its portfolio as well as acquire and then accelerate brands that have high visibility or are innovators in their categories.

The company, which includes non-alc brands like Tapout in its portfolio, was founded by 28-year beverage industry veteran Robert Nistico. The CEO was the fifth employee and VP/general manager for Red Bull North America, and CEO of Marley Beverages, which was acquired by New Age Beverages in 2017.

Perfect Hydration gallons just became the highest dollar velocity jug in the west, according to P26W data from IRI/Circana. As distribution gains continue, the brand is poised to become the strongest player in the gallon water and alkaline subsegments. Learn more

LA-based Plant Botanical Vodka is teaming with dating app STIR to go after a specific demographic it’s calling the the SPILF, otherwise known as Single Parents I’d Like to F***) with its new creative campaign. 

• The share of U.S. children living with a single parent has been rising for decades, and founder Simone Moran said she wanted to champion single parents in some way. 
• Moran’s vision for a better-for-you alternative vodka and RTD that would use sustainable ingredients and hangover-fighting botanicals emerged from her 20-year practice as an herbalist and acupuncturist. 
• “One of the reasons I started Plant is so that I could drink and not have a hangover because when you’re parenting, it’s really hard,” she said. “You can’t just tune the kids out or call in sick, and I was thinking single parents have it even worse!”

Other RTDs and CPGs have appealed to parents and beyond with similar cheeky (but more PG) references. Mom Water, a competitor of Plant Botnaical’s RTD at Target, also comes from a parent founder, while Dad Grass offers “low dose, full toke like your parents used to smoke” pre-rolled joints and gummies made of hemp CBD.

How do Coke consumers envision the world a thousand years from now? Lets just say there are a lot of colorful bubbles according to Coca-Cola Creations which has tapped artificial intelligence for its newest limited-edition flavor drop: Y3000 Zero Sugar.

• The LTO product co-created with AI features futuristic packaging design that showcases liquid in a “morphing, evolving state, communicated through form and color changes that emphasize a positive future.” Sounds…complicated.
• The launch aims to envision how Coke fans “envision the future through emotions, aspirations, colors, flavors and more.” Again, seems ambitious?
• Coke’s soft drink campaign features an augmented reality website that brings users to the year 3000 using mobile phone photos reimagined in a futuristic setting. Along with the digital marketing launch, Coca-Cola will also launch an apparel and accessory collection in collaboration with fashion designer Yoon Ahn.
• Y3000 Zero Sugar is available in select markets worldwide with a full-sugar version following in the U.S., Canada and Mexico.