Two prominent trends currently shaping the food and beverage industry are clean labeling and cannabis. Sproutly, a Canadian company, has discovered a solution that addresses both trends with its water-soluble cannabis extract, which the company hopes will be incorporated into various food and beverage products. CEO Keith Dolo shared with Food Dive that Sproutly’s extraction method, which naturally isolates a water-soluble cannabis solution from the plant, is distinctive. In contrast, many other companies extract oils from cannabis and use chemical processes such as emulsification or encapsulation to make them water-compatible, a method that may deter consumers interested in clean label cannabis products. “Our process creates a natural solution that does not require chemical modifiers or the chemicals typically needed in extraction,” Dolo explained. “We offer a highly differentiated product… Our focus is on catering to health-conscious consumers who desire cannabis products in their most natural and wholesome form.”
Although Sproutly’s products are not yet available on store shelves—since the company is initially targeting Canada and edible cannabis won’t be legal there until at least October—there is considerable anticipation surrounding the company’s potential. Recently, Sproutly formed a joint venture with the historic Canadian brewer Moosehead to develop, produce, and market non-alcoholic cannabis-infused beverages. The company has also created three functional cannabis-infused drinks designed to provide focused energy, stress relief, and restful sleep support. Once these products receive legal approval in Canada, Dolo stated that Sproutly would be ready to launch them. “We have already developed multiple beverage formulations and a comprehensive product catalog,” Dolo noted. “Now, we are just awaiting regulatory approvals to finalize distribution, branding, and marketing strategies.”
Sproutly’s extraction technique was pioneered by Arup Sen, the company’s chief science officer. He began this research at Infusion Biosciences, which Sproutly acquired last year. “We don’t merely take oils from the cannabis plant and attempt to make them water-compatible,” Dolo emphasized. “Dr. Sen’s groundbreaking discovery revealed that a naturally water-soluble cannabis solution exists within the cannabis plant.” Because the extract is not an oil, Dolo indicated that the body metabolizes the cannabinoids differently than conventional edibles, which can take hours to have an effect. With Sproutly’s extract, consumers can experience effects within five minutes, with effects dissipating in 60 to 90 minutes. The extract also captures all cannabinoids, terpenes, and phytochemicals from the plant, providing a complete sensory experience. “For the first time, we can consider it similarly to wine varietals,” Dolo remarked.
Sproutly is developing its beverages based on specific marijuana and plant varieties, experimenting with both fruity and earthy flavors. Dolo mentioned that the brewery’s product development team at Moosehead may generate new ideas for their collaboration. This joint venture marks Moosehead’s first partnership of its kind, and the brewery has a long-standing reputation for being attuned to consumer preferences. While Sproutly’s immediate focus is on beverages, Dolo noted that the company intends to eventually incorporate its extracts into food products. They are exploring partnerships with food companies interested in the edible cannabis market, allowing these companies to enter the space without needing to become food manufacturers themselves. “We can leverage the expertise of established companies that have navigated the challenges of distribution, marketing, and food formulation,” Dolo explained. “This approach enables us to bring high-quality products to market more quickly, allowing us to concentrate on cultivating unique cannabis strains and extracting them.”
Regardless of what products emerge, Dolo expressed skepticism about their availability in the United States until full federal legalization occurs. The company is also considering markets outside Canada, but only in jurisdictions where federal law governs the cannabis industry. Beyond its unique extract, Sproutly differentiates itself from other cannabis firms through its leadership team, which includes several executives with backgrounds outside the cannabis sector. Prior to joining Sproutly, Dolo worked in staffing and recruitment with Robert Half and at PricewaterhouseCoopers. In December, he added two consumer packaged goods (CPG) veterans to the team: Bryan Semkuley, previously with Kimberly-Clark, AB InBev, and Labatt, became the company’s president, while Melise Panetta, who worked for SC Johnson and PepsiCo, took on the role of vice president of sales and marketing.
Dolo emphasized the need for cannabis companies to transition from agricultural operations to those that operate with the mindset and methodologies of CPG firms. While cannabis companies can achieve short-term success by launching numerous products, Dolo believes this approach is not sustainable. To succeed long-term and not merely be recognized as ingredient suppliers, cannabis companies must prioritize branding, marketing, and consumer satisfaction. Having CPG veterans on the team has allowed Dolo to view Sproutly’s future through this lens. “We need to consider what products would pair well with cannabis, how to effectively market them to consumers, and what consumers genuinely want to purchase instead of simply placing products on shelves and hoping for sales,” Dolo commented. “This involves a deeper understanding of consumer needs and developing products that cater to specific audiences.”
One trend Dolo has become particularly aware of is clean labeling. As consumers increasingly scrutinize ingredient lists and manufacturing processes for food and beverage products, they are likely to apply the same standards to cannabis products. Currently, many edible cannabis products undergo extensive processing to utilize cannabinoids effectively. In contrast, Sproutly’s method is cleaner and more direct, requiring no additional chemical intervention. “Do we want to be just another cannabis producer introducing chemicals into people’s bodies, or do we want to be a cannabis producer known for employing the most natural extraction methods to create the purest oil or oil-based products?” Dolo inquired. He is optimistic that the clean label characteristics of Sproutly’s offerings will appeal to consumers, especially those seeking cannabis for wellness purposes. A simpler, less chemically processed product aligns better with health-conscious consumers.
In the short term, Dolo believes cannabis companies should refocus their efforts on producing quality products that resonate with consumers. “Over the next four to five years, we will see which products, categories, and brands rise to prominence,” he stated. “Consequently, we can expect to see significant consolidation within the industry, as licensed producers like ourselves will need to unite for mass scale, while others unable to capture market share may disappear or be acquired.”
As Sproutly forges ahead, it remains committed to innovation and quality, ensuring its products, including the calcium citrate slow release formulations they are developing, meet the evolving demands of a discerning consumer base.