Plus, Sure Shot acquires Yerbaé͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ 
 
 
BevnetJanuary 09, 2025
DAILY BRIEFING
Today's news & insights for the beverage industry.

In this issue of Daily Briefing

  • 🤝🏼 Sure Shot Acquires Yerbaé 
  • 💪 OWYN Owner ‘Positioned Well’ for FY25 
  • 🔄 People: Illicit Elixirs Co-Founder Moves On
  • ✨ :INCLUDED Highlights Five Years of Impact
  • 🔀 Brand Revivals, Ultra-Processed Ban & A Distressed Co-Man

📰 Today's Top Story

🧑🏻‍⚖️ Virginia Hemp Rules Stand

🧑🏻‍⚖️ Virginia Hemp Rules Stand

States looking to harsh the high for hemp-derived THC products just got handed a big win from The U.S. Court of Appeals, 4th Cir., which ruled the 2018 Farm Bill does not preempt a Virginia law limiting the THC content in consumable products. But what else would you expect from The Man?

Virginia passed a bill back in 2023 that sought to control the total THC contained in hemp-derived products. It took on a Farm Bill loophole limiting delta-9 THC content to 0.3% per dry weight, which has allowed manufacturers to develop dosages that technically meet the rules but produce equal strength effects by employing synthetics and blends with other cannabinoids.

The challenge to the law argued that Virginia’s bill discriminates against out-of-state businesses, but the court wasn’t in agreement. Instead, Judge A. Marvin Quattlebaum Jr. ruled that the Farm Bill “expressly sanctions state regulation” and that it “does not preempt or limit a state from regulating the 'production of hemp' in ways that are more stringent than federal law.’

Some industry groups are celebrating the decision. Law360 reported that the American Trade Association for Cannabis & Hemp (ATACH) supported Virginia’s law, noting that the products it targets are frequently “not hemp, nor are they marijuana, but rather synthetic products which attempt to evade regulation.”

To be perfectly clear, hemp-derived THC drinks and edibles can still be sold in Virginia. They just can’t exceed 0.3% THC, with a ceiling of 2 mg per package, unless balanced out by a CBD ratio of 25:1.

The ruling also generates a solid legal precedent for regulators to work off of as more states seek to rein in legal hemp THC, which has boomed in the marketplace over the past several years. Even mainstream retailers like Total Wine & More have embraced the format, making it easier than ever for consumers to bypass dispensaries and grab a 6-pack of hemp soda on a quick trip to the store.

The ruling arrives as states like California have gone even further, temporarily banning hemp- THC based consumables with any detectable amount of THC. Courts backed that policy too, blocking an industry challenge against its enforcement in October.

New Jersey and Missouri have also recently cracked down, with the threat of children getting ahold of THC products being a driving force behind calls for stricter regulation.

Even with states emboldened to issue their own regulations, the patchwork approach still stands as others (ahem, Minnesota) have opened the doors wide for hemp THC snacks and drinks.

Go Deeper: The Year In Cannabis: Hemp-THC Redraws the Map to Growth

 

👉🏼 What You Need to Know 👈🏼

🤝🏼 Sure Shot Makes Yerbaé Its First Acquistion

🤝🏼 Sure Shot Makes Yerbaé Its First Acquistion

Sure Shot’s flagship product – a 4 oz. functional shot billed as “the world’s first rapid alcohol reducer” – may be still gaining its own distribution, but the company is already looking beyond with its acquisition of yerba mate energy drink Yerbaé.

💪 Founded in 2017, Yerbaé has a long track record in retail that its new owners are eager to leverage, touting Sure Shot’s “immediate access to Yerbae’s well-established retail partnerships,” along with their existing merchandising programs and promotional initiatives, in a release on Wednesday. 

🔀 Sales distribution, finance, and operations teams are expected to be integrated. Yerbaé co-founder and CEO Todd Gibson (set to stay on in a special advisory role) said the new structure will help reverse revenue declines for the brand by opening new avenues to growth capital; SHOT is traded on the NASDAQ exchange. 

Read more details on the deal on BevNET

 

💪 OWYN Owner ‘Positioned Well’ for FY25 Growth After Q1 Earnings

Beginning its first full year with nutritional shake brand OWYN in its portfolio, The Simply Good Foods Company is off to a “strong” start to the year with gross margin coming in better than anticipated, president and CEO Geoff Tanner said in a press release statement. The company reaffirmed its FY2025 outlook and “expects organic sales growth to be driven primarily by volume” with “strong advertising and marketing plans in place.” Let’s take a look at the numbers:

  • Net sales of $341.3 million, a 10.6% increase year-over-year
  • Adjusted EBITDA $70.1 million compared to $62 million in the prior year period
  • Net income was $38.1 million, compared to $35.6 million in Q1 2025

💭 Citing previous struggles with the Quest protein chip line, Tanner reported that capacity was back to “optimal levels” and the company was prepared to “support merchandising and programming as well as increase distribution for these products.”

 

🔄 People Moves: Illicit Elixirs Co-Founder Moves On, Guru Energy’s New Sales EVP

🥤 Illicit Eixirs co-founder and CMO Jason Gaboriau said in a LinkedIn post that he was leaving the functional beverage brand that he co-founded with CEO John Valiton. Garboriau did not specify what his next move would be.

⚡ Canadian energy drink brand Guru Organic Energy has appointed Patrick Charbonneau as its new EVP of Sales. Charbonneau spent the last 11 years in sales leadership roles at PepsiCo Canada and, before that, held sales management positions at Frito-Lay.

👏 Avery Henderson, co-founder and CMO of now-defunct Marcos Sweets & Spices, has returned to CPG design at Interact Brands. Henderson worked at the branding studio from December 2017 to February 2021 and will return in a new role as executive director of growth.

 

✨ :INCLUDED Highlights Five Years of Impact

 :INCLUDED, the largest collective of founders and CEOs of color in the food and beverage industry, celebrated five years in operation with a snapshot of its impact thus far. Here are some highlights:

  • More than 150 entrepreneurs showcased in the Natural Products Expo trade shows
  • Over 70 entrepreneurs showcased at the Specialty Food Association’s Fancy Food shows
  • Generated over $5 million in direct value created for entrepreneurs via its sponsorship and partnerships
  • 2,500+ brand-to-buyer introductions generated 
  • 100+ articles, television spots and podcast features
 

🎙️ Now Streaming: CPG Week

🔀 Brand Revivals, Ultra-Processed Ban & A Distressed Co-Man

🔀 Brand Revivals, Ultra-Processed Ban & A Distressed Co-Man

In this week’s episode, the team discusses the revival of nostalgic beverage brands including this week’s announcement that Mexican beverage producer Grupo Jumex will relaunch Odwalla. The news follows the resurrection of Slice by Suja Life and Jolt Cola by Redcon1. The podcasters discuss these second act strategies and whether they could have some staying power among consumers.

The team then debates the implications of California’s new executive order investigating the potential health impacts of ultra-processed foods and synthetic dyes.The podcast wraps up with details on the abrupt closure of Canadian co-packer Joriki Beverages’ Pennsylvania production facility. 

Click here to listen to this week’s episode.

Like what you are listening to? Please don’t hesitate to rate our show and leave a review on your podcast platform of choice.

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