How to get a beverage containing cannabinoids into retail

Ikkuma is looking to beat the rush with an (already legal) drink that's planned to enter grocery and drug stores.
IO-Noise Cancelling

There’s much anticipation for the legalization of cannabis edibles, extracts and topicals later this year. But that doesn’t mean weed marketers will have an easier time overcoming the marketing regulations for those cannabis products, which are expected to be just as stringent as the first set of rules.

It’s a challenge that wellness company Ikkuma is avoiding by launching a line of beverages made with cannabinoids derived from non-cannabis plants, an innovation that comes with the benefit of not being subject to the regulatory hurdles facing pot-based product manufacturers. And unlike its cannabis brands, Ikkuma’s line of beverages will be sold through conventional channels like grocery and drug stores, as opposed to exclusively through cannabis retail channels.

The product line, called I/O, will launch direct-to-consumer in California in November and in Canada before the end of 2019. Ikkuma CEO Gary LeBlanc, who is a former VP of operations at Bacardi, says he expects to be in conventional grocery and drug retail soon after, though precise timelines are still being negotiated with distributors and are expected to be announced later this week.

Ikkuma partnered with Armen Manoukian, chief scientific officer at Toronto-based R&D company NeuroTheryX, to engineer a mixture of plant extracts containing cannabinoids that, once combined, are believed to offer a number of health and wellness properties. Unlike the cannabinoids derived from the cannabis plant (including CBD and the psychoactive THC), the components in I/O beverages occur in non-cannabis plants already available on the market and are therefore not subject to The Cannabis Act. By creating a beverage line based on that proprietary mixture of cannabinoids, Ikkuma hopes to carve out a space for its beverages outside of cannabis shops.

“We’re not going to have competition in the channels that we’re selling,” LeBlanc says. “We’re non-cannabis and we’re not CBD, so we have no competition in our channels.”

The launch of I/O comes as a number of cannabis companies explore creating compounds such as CBD and THC in labs. Some companies have been able to reproduce those compounds using yeast and sugar, though many remain in the early R&D stages and have yet to scale.

Ahead of launch, Ikkuma has positioned its beverages around the “noise cancelling” properties of its ingredients, says LeBlanc, claiming that they can help users overcome anxiety (or “filter out the internal noise,” as he puts it). In addition to the generally calming effects of its beverages, each SKU focuses on a secondary function, such as relaxation, energy and creativity, derived from its non-cannabinoid ingredients.

Education remains a central challenge for brands in the cannabis space, as consumers exhibit an interest in learning about new products. The same can be said for I/O, even thought it technically doesn’t operate in the same space. “I don’t even need people to understand what noise-cancelling means from a beverage perspective. I don’t expect them to understand. But I expect them to be curious,” says LeBlanc.

Explaining to customers the nature of its ingredients (and why its beverages are not regulated) will be a challenge that LeBlanc plans to tackle through a robust POS and sampling strategy, including in-store signage that explains the science behind the product. LeBlanc says Ikkuma is looking to work with Heyday, which offers AI-powered conversational commerce platforms to brands and retails, on deploying AI chatbots to help educate potential customers. It’s also working on integrated displays with QR codes.

The I/O product line has been years in development. Ikkuma originally produced low-sugar functional organic beverages, but after going through a series of “up-and-downs,” eventually reformulated the line around its existing focus on relaxation and energy. “It was only when the cannabis conversation started that I looked at resurrecting them with this anti-anxiety base,” LeBlanc says. The company has tested dozens of different formulations between January and early summer.

The branding for I/O was developed in partnership with Bob’s Your Uncle, a Toronto agency specializing on “thoughtful food, beverage and lifestyle” brands.