The next phase of Creature Comforts co-founder Chris Herron’s career is building an intoxicating hemp business in the South via a partnership with Climbing Kites, an Iowa-headquartered THC-infused sparkling water producer.
Herron and long-time business partner Seth Herman have founded BevStrategy, LLC, a firm built to serve initially as the sales and marketing wing of Climbing Kites’ southern expansion.
Since forging a partnership with Climbing Kites two months ago, BevStrategy has inked about 20 distribution agreements with Anheuser-Busch InBev distributors in the South.
Earlier this year, Georgia Gov. Brian Kemp signed the Georgia Hemp Farming Act, establishing regulations for businesses selling and manufacturing hemp products. Climbing Kites announced its entry into the Peach State on October 1, the same day the law took effect.
In addition to Georgia, BevStrategy is leading Climbing Kites’ sales and marketing efforts in Tennessee and North Carolina, with Florida, South Carolina and Alabama expected to follow. Climbing Kites products are also sold in Illinois, Iowa, Kansas, Minnesota, Nebraska and Wisconsin.
Speaking to Brewbound, Herron said his passion is in building early stage businesses. That led to him stepping down in May as CEO of the Athens, Georgia-based craft brewery that he helped found in 2014.
Herron connected with Climbing Kites co-founder Scott Selix about potentially partnering on southern expansion for the company, in which Iowa craft brewery Big Grove acquired a majority stake in 2023.
The why in regards to Herron’s full throttle move into THC-infused beverages is he believes those offerings have the potential to be a disruptor with “massive” potential to become an entirely new category.
The cannabis beverage market in the U.S. is now valued at $3.9 billion and projected to reach $27.8 billion by 2032, according to Expert Market Research data cited by BevStrategy. Additionally, “Climbing Kites is the fastest-growing retail premium THC brand in the country and is No. 1 in its home market, the North Central Region,” per data from market research firm SPINS.
Herron’s bullishness on THC-infused beverages is due to the format being so familiar to consumers, as well as the gluten-free, vegan friendly products’ lack of sugar or calories. As those products move from dispensaries to mass market retailers and reach more consumers, he sees a market ready to explode.
Beer distributors will play an essential role in the category taking off, he added.
“I believe this should work through the already regulated channels, particularly this sort of lower milligram [product],” Herron said.
“We need beer distributors who have been great at moving beverages across this country in a reliable and safe way,” he added. “The idea that this belongs in dispensaries … that doesn’t really make sense to me.”
A not-so-subtle theme of this year’s National Beer Wholesalers Association (NBWA) Annual Convention was the opportunity and risks of adding these products to distributors’ trucks. New NBWA chair Rebecca Maisel made the case for those products going on beer distributor trucks.
“Our supplier partners are diversifying in the face of changing consumer preferences, becoming total beverage companies: Why shouldn’t we?” asked Maisel, who serves as SVP of legal and government affairs for Gulf Distributing in Mobile, Alabama.
“We know that everyone from Gen Z to busy millennial parents are looking for ways to subsidize their experiences through non-alc. So whether it’s NA [non-alcoholic] beer or Delta-9 hemp, as long as we understand the potential benefits and risks, and we can adequately protect ourselves and consumers, why shouldn’t those products go to market on our trucks?” she continued.
Herron sees hemp beverages filling gaps in distributors’ businesses, meeting consumer demand for more adult non-alcoholic beverage options and contributing to the overall health of the beer business.
Herron doesn’t view hemp beverages as a threat to beer occasions, but he does believe their similar flavor profiles could impact hard seltzers or ready-to-drink spirits-based products.
“People who are engaging in this product because they’re abstaining from alcohol were already abstaining from alcohol,” he said.
As the regulatory environment around these products shifts state by state, Herron believes the industry should be proactive and not reactionary to the changes. The work will be in educating decision makers on the use cases and who is consuming the products.
Herron acknowledged that there is “a lot of misinformation” around who the consumer is and what the product does. He said 80% of Climbing Kites’ drinkers are millennials. Many of them have children, good jobs and drink the beverage in moderation.
“It’s a lot of your yoga moms or your golf dads or people that are looking for a social beverage and for whatever reason are choosing to abstain from alcohol,” he said. “Or they just like the effects of this. It hits different than alcohol.”
If the intoxicating hemp beverage is going to become mainstream, Herron believes there needs to be more companies in the space who are knowledgeable about how the beer business works and who will install strong marketing codes to ensure younger consumers are not advertised to and the products are marketed more as social products.
“We need some regulations around what is acceptable milligram limits to be running into typical grocery and all of that,” he said. “And the good companies like Climbing Kites are self-regulating.”
Climbing Kites’ portfolio of Delta-9 THC- and CBD-infused sparkling waters includes Orange Mango (2.5mg THC/2.5mg CBD), Peach Prickly Pear (5mg THC/5mg CBD), Pineapple Passionfruit (5mg THC/ 5mg CBD), and Mixed Berry (10mg THC/10mg CBD). They contain no alcohol, zero sugar, zero calories, and are gluten-free and vegan, and the dosages are tested and verified by an accredited and independent lab, the company said.
As part of the roll out in the Peach State, Climbing Kites products will be sampled at a launch event at Westside Motor Lounge today (Thursday, October 3). Notably, the launch event is taking place in an on-premise establishment. Herron said his firm is meeting with “big on-premise accounts that are all very interested.”
Ultimately, Herron sees hemp beverage’s rise as an opportunity to meet consumer-driven demand.
“When we ignore what the consumer tastes are, we’re Blockbuster,” he said. “If we pretend that this isn’t consumer-driven, that this is driven by something other than that, that’s when we’re going to get ourselves in trouble.”