It’s one of the more bemusing ironies of recent times that -- after years of being unfairly cast as vices -- that hemp and cannabis should be freed, only to find themselves somehow unable to reconcile differences. 

I’ll grant myself a bit of poetic license there, but for many cannabis beverage and food brands in California, the state’s current situation is potentially grave this week, as a bill aimed at repairing California’s cannabis oversight is set to enter a decisive phase. Here’s a quick summary of what you need to know:

As we all remember, language in the 2018 Farm Bill that legalized industrial hemp (>0.3% THC by dry weight) helped create the current market for hemp-derived Delta-9 THC products. Essentially, the same cannabinoid (THC) is treated either as part of the licensed cannabis market or not depending on from where it’s been sourced.

California Gov. Gavin Newsom is attempting to fix that loophole as part of a larger effort to rein in the state’s illegal cannabis market, which has seen a state task force seizing over $120 million in illegal products since January. Amendments attached to the bill by his office call for hemp and marijuana to be placed under the purview of the Department of Cannabis Control (DCC), therefore restricting all sales of intoxicating hemp products to licensed dispensaries, with all the requisite taxes and conditions that brings.

Licensed cannabis retailers, which are currently blocked from selling “non-cannabis goods” like hemp products, could start doing so, while cannabis cultivators would be similarly liberated to start growing and selling hemp. But most importantly, it allows out-of-state businesses access to start selling hemp – produced for considerably less, minus the state’s operational costs and fees – in California, creating another front for local cultivators to fight on. 

For CPG brands, the bill means the popular names like CANN -- whose embrace of hemp-derived D9 THC was predicated on its ability to open up markets -- are suddenly facing an uncertain future in the Golden State. Speaking at a session on Monday, Micheal Ramirez, head of the country’s largest cannabis beverage production facility in Los Angeles, told the committee: “We believe in regulation. It needs to be stronger, but it needs to be wise.”

The situation highlights a somewhat bizarre situation: as a product sold in licensed cannabis dispensaries, cannabis beverages have had little broad impact, but within other venues, both low and high-dose hemp-based versions are becoming a big hit. Their popularity with beer drinkers (and brewers) was a big reason why Minnesota moved forward with its own legalization efforts. But states are clearly struggling with how to manage intoxicating THC within the divergent channels of unregulated hemp and licensed cannabis. 

We’ll see what happens this week: August 16 is the last day for fiscal committees to advance legislation this session.

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Poppi has a new chief sales officer, with Bridget McCarthy Lasda taking on the role as of this month, according to an update on her LinkedIn page.

🆙 Lasda had been Chief Customer Officer at Tennessee-based Calypso Lemonade maker King Juice Co. since 2019, with prior stints in sales at Heineken and Coca-Cola. Her arrival will see current sales boss Jeff Rubenstein transition to the newly created role of Chief Growth Officer, per a report in Beverage Business Insights. 

🫰🏻 She joins Poppi as reports indicate it spent over $43 million on advertising from January through April, dwarfing the likes of Gatorade ($40 million) and Dr Pepper ($32 million). 

🪇 For its part, Calypso has moved quickly to fill the vacant CCO role, announcing the promotion of Kim Hickey on August 6.

Just over a year into his tenure as Starbucks CEO Laxman Narasimhan is out, effective immediately. Coming in to replace him is Brian Niccol, Chipotle chairman and CEO, who will take the mantle of Starbucks’ chief executive and chairman on Sept. 9. Starbucks share price has jumped up over 20% this morning on the back of the leadership shakeup.

🔵 Narasimhan took over at the Seattle-based coffee giant in October 2022 as “incoming CEO” and was officially was installed as CEO in March 2023, according to LinkedIn. Previously, he spent four years at PepsiCo in the Latin America CEO and Global CCO roles.

🌮 Niccol has been CEO of Chipotle since February 2018 and previously held leadership roles at Yum! Brands leading QSR chains like Taco Bell and Pizza Hut.

Lifeway Foods president and CEO Julie Smolyasnky cited continued volume growth of its flagship drinkable kefir as the key driver of record sales in the company’s latest earnings report, released this morning. Here’s the top-level view: 

• Net sales increased 25.3% to $49.2 million. 
• Gross profit as a percentage of sales was 27%. 
• Selling, general and administrative expenses accounted for 15.8% of net sales. 
• Net income was $3.8 million or $0.26 per basic and $0.25 per diluted common share.

💭 “While many businesses in the broader space have called out a more cautious consumer, Lifeway has continued to excel and we are not seeing a slowdown within our business. Our growing consumer base is proving resilient and very loyal,” said Smolyansky during a pre-recorded conference call. 

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Black Rifle Coffee Company has the energy drink category in its crosshairs. As part of its Q2 2024 earnings report last week, the Utah-based brand announced plans to launch a “clean energy alternative” line, extending the company’s CPG biz outside of coffee for the first time.

⚡ Details on the energy launch were sparse, but it will bear the simple name of Black Rifle Energy with expectations of rolling out in “late Q4” with a national expansion in early 2025.

📊 Black Rifle reported Q2 2024 revenue down -3.2% to $89 million, but wholesale revenue climbed +7.6% to $53.8 million, reflecting improvement for its CPG business with strong breakthrough in Food, Drug and Mass.

📉 Online DTC sales were a large part of the drag on overall revenue, falling -13.3% to $30 million, while its “Outpost” brick-and-mortar coffee shops reported revenue down -28.4% to $5.3 million.

Michael Preysman, the founder of trailblazing fashion company Everlane and Magna, an upstart brand of sports wellness powders infused with magnesium, shares his perspective on differentiation, why Magna’s package draws inspiration from a cigarette brand, how he thinks about and implements a customer service strategy, and how to identify and work with mentors.

Listen to the episode now.