Caliva, one of the largest vertically integrated cannabis companies in California, announced that it acquired Zola, the maker of plant-powered beverages, to expand into the cannabis and hemp-based CBD (hCBD) beverage space.
Caliva has quickly become a market leader in cannabis consumer products in California, which represents more than 35% of the overall United States legal cannabis market. With over 500 dispensaries in California, the deal provides Caliva the unique opportunity to dominate sales of both cannabis and hCBD beverages in one of the largest cannabis markets worldwide. It also positions Caliva to capitalize on a nationwide roll out of infused beverages.
The interest in hCBD products has been supercharged since the passage of the 2018 U. S. Farm Bill which legalized hemp and hemp-derived CBD products nationwide. The beverage industry is worth $210 billion in the US alone, and retailers and traditional beverage makers believe that cannabis-infused drinks will not only create a new category, but disrupt established players. Combined, the infused beverage category could drive $2.5B in enterprise value over the next two years.
Currently, Zola’s portfolio of popular plant-based beverages is available in over 7,000 retail locations nationwide, including conventional grocery stores, natural foods and specialty markets, and quick serve restaurants. In addition to a strong, established distribution channel, Zola has over 16-years of experience in the highly fragmented and trendy beverage market. Zola’s CEO, Chris Cuvelier, will oversee and execute beverage initiatives at Caliva to go from concept to shelf quickly.
Caliva is exploring entering the infused beverage market in several categories, including sparkling water, functional shots, functional powders, teas, cold brew coffee and sports drinks. Zola’s key relationships with distributors, ranging from regional to national, will enable fast rollout of hCBD beverages to targeted markets.