Dirty Lemon CEO: Our discontinued cannabinoid drink was too much of a liability

Dirty Lemon, a direct-to-consumer health-conscious beverage company that sells its drinks exclusively via text message, recently discontinued its best-selling cannabidiol (CBD) drink that it launched earlier this year.

“There was a little bit more liability for us to take on than what we were expecting,” CEO Zak Normandin said on Yahoo Finance’s Morning Meeting live show.

“It’s a legal gray area right now, CBD. And, until the farm bill passes and there’s clarity on the federal and state level, it’s just too much of a liability for us. So, we’ve had insurance carriers threaten to cancel us, we’ve had credit card processors shut us down. There’s a lot of risk. But that’s obviously paired with a lot of consumer interest around this specific ingredient.”

At $65 for a case of 6 bottles, the +CBD drink was described on Dirty Lemon’s site as “a calming, non-psychoactive blend” where a consumer might “expect mild euphoria, full-body relaxation, and a clear head.”

‘We’re not a CBD company’

According to Normandin, +CBD had been one of Dirty Lemon’s “best selling products.”

“It truly is a liability that we’re just not taking on as a company,” Normandin said, adding, “But at the end of the day, we’re not a CBD company. This was one ingredient we incorporated into a beverage … We’re not ‘Dirty Lemon, CBD company.’ We’re a beverage company that’s focused on taking innovating ingredients and blending them into ready-to-drink beverages.”

Dirty Lemon has a line of nine beverages that all feature lemon juice, ocean minerals, and sea salt as the base. Dirty Lemon adds flavor and function profiles on top of that base. Dirty Lemon newest drink is its +turmeric, which touts anti-inflammatory properties.

Dirty Lemon beverages shown on Yahoo Finance’s Morning Meeting live show on Nov. 15, 2018.
Dirty Lemon beverages shown on Yahoo Finance’s Morning Meeting live show on Nov. 15, 2018.

“We think that the modern consumer wants to take the guesswork out of what’s historically been consumed through pills and powders, and we think the ready-to-drink format is a great way of introducing some of these ingredients that have been common in the naturopathic space for a very long time and blending them into something that fits the lives of the modern consumer.”

The drinks are ordered by text and delivered the same day or next day in every U.S. market. In a new brick-and-mortar play, Dirty Lemon also recently opened up a cashier-less store in Manhattan’s Tribeca neighborhood where customers pay via text. In other words, it’s a complete honor system.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.