The folks behind one of Arkansas’s newest medical marijuana processors are preparing for what they think could be the next big thing in cannabis: drinks. Former Mountain Valley Spring Water executive Breck Speed and Ouachita Farms owner David Owen are behind High Speed Extracts, a cannabis processor near Hot Springs Village that began operation in June.
Speed and Owen are no strangers to the cannabis beverage industry. They developed a beverage line called Lark, which uses hemp-derived THC and is sold in close to 400 locations across Arkansas, as well as spots in Texas and Georgia.
These drinks contain THC that is extracted from the hemp plant, which can now be legally cultivated due to changes made by Congress in the 2018 Farm Bill. Since then, hemp-derived THC has fallen into a regulatory gray area in which it is not regulated by state agencies and does not fall under the purview of the state medical marijuana framework.
Earlier this year, the Arkansas legislature passed a bill to ban some hemp-derived products but hemp proponents believe Delta-9 THC, which is specifically mentioned in the Farm Bill, will continue to be allowed.
Speed, a veteran of the bottled water industry, has teamed up with Louisiana-based beverage professional Cameron Meshell, who has developed a way to make cannabis water-soluble so it mixes easily in water without taste or smell.
Speed and Owen are bullish on the future of cannabis beverages. They’ll be making medical marijuana beverages at their Arkansas facility later this year and will continue to produce the hemp-derived Lark drinks in Texas.
The cannabis beverage market brings in more than $1.2 billion a year, but market watchers expect it to grow to more than $5.8 billion a year in the next 10 years.
Speed said he believes cannabis will eventually become federally legal and cannabis beverages will become a large part of the market — possibly the largest part of it.
Major alcohol producers Anheuser-Busch InBev and Molson Coors even dipped a toe into the market with CBD drinks, although they’ve since gotten out. Their distributors continue to stock cannabis beverages, though, Owen said. There’s also a line of Pabst Blue Ribbon THC seltzers in five fruity flavors, though the products are made by former Pabst employees in California and not by the Milwaukee brewery.
Owen said Minnesota’s hemp-derived THC market might be a “peek into the future.” The Minnesota legislature passed a bill to legalize hemp-derived THC and set limits on serving sizes. Afterward, many breweries began making THC seltzers. One distributor told Owen a local bar was selling more of the fruity low-THC Trail Magic drinks than Bud Light. (And that was before conservatives started smashing Bud Light cans in righteous indignation.)
In Arkansas, Owen’s Lark drinks are carried by Moon Distributors and Central Distributors, traditional alcohol distributors who delivered the drinks to nearly 400 locations, including bars, convenience stores and restaurants. They aren’t sold in the state’s medical marijuana dispensaries.
Drinks from Lark, as well as Tennessee-based Better Than Booze, have been spotted at El Sur, a popular Honduran restaurant in Little Rock’s South Main neighborhood, and Sullivant’s Liquor on Cantrell Road. Lark can also be found in CBD stores like Heights Apothecary and Hemp and some upscale dining establishments like Ciao Baci and Petit & Keet, according to Keith Lacewell, Lark’s vice president of global sales.
Lark and Better Than Booze drinks are made using hemp-derived Delta-9 THC. Owen previously used Delta-8 THC in his drinks but the substance has come under greater legal scrutiny lately and was banned during the state legislature’s 2023 session, along with some other hemp-derived products. Owen said he believes his drinks, made with natural Delta-9 THC, will still be allowed when the restrictions take effect on Aug. 1.
Speed said he’s only interested in working with customers who are playing “strictly by the letter of the law” and he believes the drinks he’s developed will continue to be legal in Arkansas.
“We don’t use chemically altered or manufactured products,” Speed said. “We use just what’s naturally available in the plant. Delta-8 is not Delta-9 and Delta-9 is what is allowed in the farm bill.” Speed said he’s fine with the Arkansas bill that banned Delta-8 and referred to Delta-9 as a “safe harbor,” since it is specifically mentioned in the federal farm bill.
The Lark drinks have 5 milligrams of natural hemp-derived THC and 5 milligrams each of CBD, CBG and CBC. The drinks have low doses of THC, similar to Cann, a leading cannabis beverage nationally that markets itself as a “social tonic.” Low-dose THC drinks haven’t taken hold in dispensaries where higher-dose drinks make up most of the market, Owen said. In other locations, like bars and restaurants, lower-dose social beverages have been successful. “[Cann’s] idea is to be a light uplift social tonic,” Speed said. “I think that’s brilliant positioning where people can always go and have a good experience.”
Speed has been in the beverage industry since 1988 when he started Clear Mountain Spring Water Company. In 2004, along with prominent Arkansas businessman J.B. Hunt, he bought Mountain Valley Spring Water and operated that until he sold it to a private equity firm in 2014. Since then, Speed has continued to work in the beverage industry in Louisiana.
In addition to Lark, Owen has produced a seltzer called Ave (pronounced ah-vay) that includes 5 milligrams of Delta-9 THC and 5 milligrams of CBD. Owen even sipped on one during his interview with the Arkansas Times. Matt Foster, who founded North Little Rock’s Flyway Brewing, helped develop Ave, although the beverage is not associated with the brewery. The drinks haven’t made it to the shelf yet due to the regulatory confusion over hemp-derived beverages, but Foster sees a bright future for that segment of the market. “We’re on the leading edge of a very large wave,” he said. “We’re still trying to figure things out. We definitely want this product to be regulated so it can safely and responsibly be distributed, sold and consumed. Until that happens, we’re in limbo.”
Owen has also produced a non-THC beverage called Night Lark that uses nonpsychoactive cannabinoids CBD and CBN. Owen hopes getting Night Lark into distribution will help him create good relationships with distributors if they ever decide to carry THC beverages.
The only cannabis-infused beverages sold in Arkansas dispensaries are under the Wynk brand, produced by BOLD Team in Cotton Plant, although there are some drink mixes and elixirs produced by other Arkansas cultivators. BOLD introduced the drinks last year and they are now in nearly all of the state’s dispensaries. The Wynk drinks have 5 milligrams of THC and 5 milligrams of CBD, which BOLD Senior Director of Operations Annie Iselin described as a “microdose.” Eight months after Wynk drinks debuted, BOLD rolled out Countdown, another Wynk beverage, with 25 milligrams of THC.
Iselin said she believes the cannabis beverage market is niche. She said flower is “the king” followed by vape cartridges, concentrates and edibles. She said she doesn’t believe beverages will ever make up a large percentage of business for cultivators or dispensaries but said dispensaries do order some of her drinks regularly.
“It’s great for the patients that it works for,” she said.
Gates McKnight, general manager of dispensary operations at Purspirit Cannabis in Fayetteville, agreed that beverages are unlikely to make up a large percentage of the cannabis market. Patients who drink the beverages like them, McKnight said, and they’re a discrete alternative for patients who don’t want to smoke.
Speed and Owen, however, are full speed ahead, planning to produce canned drinks in a year or so, and with the aim of partnering with some national cannabis beverage companies interested in the Arkansas market.
The keys to beverage development, Speed said, are precise dosing and relatively rapid onset.
“If they enjoy that experience, then they will make that a part of their lifestyle like wine and spirits,” he said.
