Happi cannabinoid-infused seltzers have a clear mission — so clear that it’s in the name.

Lisa Hurwitz, co-founder and president, said she and Joe Reynolds, co-founder and CEO, wanted a name that would resonate with consumers in a fun and easy way.

“And at the end of the day, Happi makes you happy,” she said. “We've gotten this feedback from consumers. They love it, they love the flavor, they love the feeling. They always say it really does make me happy. We wanted a brand name that captured what the product was going to deliver in the end benefit.”

Founded in Michigan’s cannabis market in 2021, the seltzer brand has taken its mission nationwide by offering versions with hemp-derived cannabinoids through its direct-to-consumer site, as well as in states with flourishing hemp beverage markets, such as Minnesota and Texas. The brand has also expanded into the effects-based beverage space, introducing two varieties that pair cannabinoids with functional mushrooms.

Happi offerings

Hurwitz said Happi spent 18 months developing its formulations, focusing on flavors that are accessible with a botanical twist. The core Happi lineup includes Lemon Elderflower, Raspberry Honeysuckle and Lime Wild Mint. The brand recently introduced Pomegranate Hibiscus in Michigan.

“We wanted them to be great-tasting,” she said. “We wanted them to be approachable, but a little complex — so not just a straight lime, but the combination of lime and mint. It feels a little elevated, but still approachable. Same with Raspberry. People love the raspberry flavor, but that honeysuckle adds a little bit extra.”

Happi recently moved into the functional beverage space with the launch of Happi Glow and Happi Nightcap. These beverages feature a blend of cannabinoids and mushrooms to promote a specific effect. Featuring a Blood Orange Ginger flavor, Happi Glow features 5 mg THC, 5 mg CBD, 3 mg CBG, 2 mg CBN and lion’s mane mushroom. It’s designed for winding down in the late afternoon or early evening.

Meanwhile, Nightcap has a Turkish Apple Tea flavor and features 5 mg THC, 5 mg CBN and reishi mushroom to support sleep.

“We know a lot of consumers have a glass of wine, a Scotch or sometimes a beer before bed,” Hurwitz said. “We know that alcohol actually disrupts your sleep. We wanted them to be able to have that drinking occasion before bed, to feel like they could have that nightcap, that last drink before bed, but that would actually enhance their sleep.”

Happi Nightcap was recently awarded a gold medal in the water/sparkling water/seltzer category of the inaugural High Spirits Awards, while Happi Glow received a silver medal.

In Michigan, Happi cannabis-derived beverages are manufactured in partnership with Highway Horticulture. Hurwitz said Michigan will remain its only cannabis market for now, but in other markets and through the direct-to-consumer channel, Happi is made with hemp-derived cannabinoids.

Each 7.5-oz. can of hemp-derived Happi contains up to 5 mg THC, but in the Michigan market, Happi offers two varieties with 10 mg of cannabis-derived THC  in the dispensary channel.

Hurwitz pointed to the opportunity in the hemp-derived space, particularly in Minnesota, where a robust hemp beverage market emerged after the state legalized edibles made with hemp-derived THC in July 2022. Minnesota legalized adult-use cannabis earlier this year.

“When they passed adult use, they opened up the liquor store channel, and we have seen that as the primary place Happi is being bought,” she said. “It makes sense for consumers, because this really is a proxy for alcohol. It is a direct, one-to-one replacement. Unlike CBD or other beverages, Happi hemp-derived gives you that low-dose high feeling. Consumers really do see it as a parallel to alcohol, and we've had the most success in the liquor store channel in Minnesota.”

Co-manufacturing and expansion

In Minnesota, Happi has partnered with Chill State Collective, the cannabis co-manufacturing and distribution arm of Fair State Brewing Collective. The company has also partnered with Texas-based Bayou City Hemp, which recently acquired 8th Wonder Brewery.

Hurwitz said collaborating with breweries with strong beverage manufacturing capabilities — and an interest in the cannabis and hemp spaces — has been crucial.

“What's tricky is the cannabis companies are not beverage companies, and that was a very big learning for us early on,” she said. “They know how to process, grow, sell cannabis really well. I know how they operate, but they're not typically set up with canning lines. They don't usually have beverage experts that know how to work with liquids, which none of their other products are. It's very different to manufacture a beverage than a gummy. A big learning for us once the hemp-derived market opened up was these beer companies or cider companies, typically breweries, are all over this space, excited about it and see it as a line extension, much like they've created seltzers over time, or went from beer to cider or other trends. This is just manufacturing another beverage and THC is an ingredient in it.”

Chill State began manufacturing Happi in January, and Bayou City Hemp, which provides hemp for Happi, and 8th Wonder began manufacturing Happi in July. Hurwitz said having precise recipes, formulations and standard operating procedures has helped onboard their manufacturing partners.

“Every time we go into a new market, we work with that manufacturer and say ‘this is exactly how you manufacture Happi,’” she said. “The ones that already are running canning lines and breweries, they're like, ‘OK, yeah, we got it.’ Typically it's a really seamless transition, whereas the cannabis companies are just not set up to manufacture beverage.”

When it comes to testing, Happi applies strict requirements from the Michigan cannabis market to its hemp-derived products, Hurwitz noted.

“They've got a shelf stability requirement which is almost prohibitive for a lot of cannabis companies to hit,” she said. “Cannabis in formulation is not always stable. Potency falls out, other things, so it took us a really long time to dial it in and to get the stability to where Happi could be shelf stable for a year or more. We really appreciate Michigan's rigor and we appreciate all the requirements, because we've taken that rigor into the hemp-derived space.”

Hemp-derived Happi is currently available in 40 direct-to-consumer markets, including Michigan. Hurwitz said the company recently introduced a subscription model, and it has also launched gifting options.

Hurwitz noted the company will continue to use consumer data to inform product development. But overall, she’s pleased to see the hemp-derived beverage market expand.

“This space is really fun on the hemp side,” she said. “It is changing all the time. New competitors are coming in, which we welcome because we think it lifts all boats. The more people out there normalizing infused beverages, I think the better.”

This article was originally posted on www.cannabisproductsinsider.com.