By Lillie Carlson
Trendy beverage maker Dirty Lemon may have halted production of its CBD-infused drink due to legal concerns, but CEO Zak Normandin insisted the company isn't otherwise slowing down or playing it safe. Rather, it is working to expand the brand's physical presence and develop new products.
When Dirty Lemon launched its CBD-infused elixir a few months ago, it sold out in under two days, according to Normandin. But earlier this month, the company announced it was discontinuing the line ー determining the brand was “not in a position to take that risk right now.”
"The innovation that Dirty Lemon is offering to consumers is not dependent upon one single ingredient. There's no less appeal to the brand. I think it puts us in a strong position, taking a stand for something that potentially puts the company at risk," Normandin told Cheddar Tuesday.
Since the regulation of CBD-infused drinks is somewhat amorphous, the ingredient is a gamble for beverage makers ー despite high demand from consumers.
“There is a lot of legislation that needs to happen before businesses are truly able to take advantage of the ingredients," Normandin said. "A lot of the uncertainty is driving our decision to pause on the sales of the ingredients.”
The market for marijuana-infused beverages could reach $600 million by 2020, according to a note from Canaddord Genuity. Many big-name brands, like Coca-Cola ($KO) and Molson Coors ($TAP), are plotting their entries.
Dirty Lemon's latest non-CBD product is a turmeric-infused beverage that is anti-inflammatory and "perfect for fall." Despite the steep $10 price point, Normandin said his brand primarily markets its products to trend-setting communities, ー like Miami, L.A., and San Francisco, where there is little price sensitivity. "The service that you're getting, the quality of the product and the ingredients, justifies the price point easily," he added.
As part of the company's effort to expand, it opened a walk-in "Drug Store" in September for customers ー essentially brick-and-mortar the Dirty Lemon way.
The store, located in Manhattan’s Tribeca neighborhood, is reminiscent of a walk-in vending machine. Customers purchase products in the cashier-less space by texting a customer service line on the honor system. This concept has been so popular that the company plans to apply it in four cities by 2019. Normandin attributes the success to the “really loyal, passionate customer group” that Dirty Lemon has been cultivating online since its founding in 2015.
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