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Jones Soda recorded a steep drop in sales in Q2 but bottom line moved into the black thanks in part to divestment of dispensary-oriented cannabiz, with co's CEO of past 6 mos, Scott Harvey, saying stage finally is set "to dedicate our full attention to strengthening and growing our core beverage business." Not only that: "The Jones brand is not just gaining traction but building a movement." There certainly was movement on topline. Net sales dropped 26.5% to $4.9 mil as Jones cycled pipeline fill by innovation-happy former CEO as well as loss of unidentified discount retailer. Gross margin narrowed to 33.3% from 34% a year earlier because of lesser scale of biz. But operating loss narrowed to $760K from $1.7 mil and bottom line swung into the black, $2.6 mil, reversing $1.6 mil loss a year earlier. Much of that improvement was scored from gain on sale of dispensary-oriented Mary Jones cannabiz to MJ Reg Disrupters LLC for $3 mil (plus perpetual licensing fee). Jones has retained as core to operation its broader-targeted Delta-9 THC biz and that grew by about $200K to $800K, with some sales lost due to supply issue. Seattle-based co concluded qtr with just $650K of cash on the books but CEO said it retains ample capacity under credit line. He made his remarks on investor call this morning on which only pre-selected questions were answered in q&a. Tho co's biz straddles US and Canada, there was no mention today of any impact from tariffs or generally strained relationships with Canada stoked by Trump administration.A longtime Einstein Noah restaurant exec who'd also made a stop at Black Rifle Coffee, Harvey had been recruited in Feb after prior CEO David Knight departed abruptly last fall after frenzy of innovation that might have spooked the board as he sought to drive meaningful topline growth. Under Harvey, the best of those concepts have been retained as co has consolidated around 3 core segments: the CSDs that have long defined brand, its "modern soda" extensions Pop Jones and Fiesta Jones, and adult bevs comprised of HD9 bevs and alcoholic Spike Jones line. At one point in his tenure Knight had as many as 9 or 10 different platforms in development.Here&#39;s rundown on those 3 key product platforms. On core soda biz, zero-sugar extensions of Jones Soda continue to be a priority, with Zero Cola launched in Mar across 10K doors now being augmented by Zero Root Beer and other flavors to come. After retrenchment a few years ago, co has rebuilt its distributor network behind line to include McLane, Coremark, UNFI, KeHe and 35+ DSD partners across US and Canada. A collab with Crayola on summer custom pack that looks like gigantic box of crayons sold out in hours and will be reprised for back-to-school season, with pre-orders coming in now. JSDA also continues to ride partnership with Bethesda's Fallout franchise, which started with Nuke Cola Quantum entry (with pack carrying "Strontium-90 glow"), lately has added Grape and will bring Sarsparilla in time for second season of Fallout TV show on Prime Video this Dec. Kroger has been key retail partner on effort. Jones also will tiptoe into club channel this qtr with its 12-oz glass bottle, tho CEO offered no details.The modern soda effort is comprised of Pop Jones gut pop and c-store-oriented Fiesta Jones Latin-inspired soda. Pop Jones, of course, captures 5 classic flavors from core line in 12-oz sleek-can entry that contains 3 g fiber and apple cider vinegar but just 4 g sugar (30 calories). That's now in modern soda schematics in 1,500+ grocers including Safeway, Albertsons, Kroger, Market Basket and HyVee Stores, with key Midwest chain due in current period. Fiesta Jones offers Latin-inflected flavors like Guava Berry and Coconut Lime in 16-oz resealable aluminum bottles. Key partner on that launch is Circle K c-store chain, with McLane and CoreMark key distribs.Among the pre-selected questions, one investor wanted to know how Pop Jones has fared entering into segment originator Walmart. Harvey acknowledged that Walmart passed on new brand at meeting last year in which original lineup of flavors was presented (that would have been under prior CEO Knight) but Jones team will be back in Bentonville, Ark, next Wed to try again, this time with 6 additional flavors to sample and in-market data supporting original entries' encouraging performance to date.Finally, there's the adult bev segment comprised of THC and alcohol entries. Despite production snafu (Harvey implied that producer had been dropped), Mary Jones D9 bevs gained traction with its 5 mg 12-oz sodas, 10-mg 2-oz shooters and 10-pks of 10 mg gummies, he indicated, with 25+ distribution partners enlisted so far including 4 added in Q2 including Allied Beverage Group in NJ. Current period will bring zero-sugar soda extension in sleek can, not conventional can of core line. Over 850 branded coolers are headed into market, too.Spiked Jones line, at 8% ABV, by now is out in 12-oz cans in 4 flavors and 19.2-oz stovepipe cans in 2 flavors, with 100-calorie extension on the way by Q4. After building initial DSD base in Pac NW with likes of Odom, Point Blank and Summit, co now has added secondary production base in Mich and begun recruiting wholesalers like Griffin, Rave and Imperial, with 15 more Midwestern houses anticipated aboard this qtr.Ex-CEO Knight Has Segued to Sake-Based RTDs with Snow Monkey Recall that Knight exited JSDA last fall for no publicly stated reason and hasn't been mentioned since, tho some presume it may have been overambitious innovation and marketing slate that led to parting of ways. Turns out he's moved on to alc space as CEO of RTD sake brand called Snow Monkey that was created by Origami Sake founder Matt Bell, who's been producing award-winning versions of Japanese staple from rice-growing area of Arkansas. Named for macaque primate, Snow Monkey Sake Remix blends Origami sake with tropical fruits in flavors like Mandarin & Grapefruit and Mango & Guava for what it styles east-meets-west fusion. It clocks in at 4.5% ABV, 2 g sugar and 100 calories per 12-oz sleek can, priced at $19.99 per 8-pk. It can go out broadly to retail like malt-based RTDs, unlike spirits-based RTDs. It launched in May in Ark, Tex, Nev, Ga, Ohio and Fla tho Knight seems to have only recently updated his LinkedIn profile to reflect affiliation with brand starting in Jun. We'd profiled Origami, which offers a zero-alc extension, late last year (BBI, Dec 11).

Jones Soda Sales Drop in Q2 but CEO Harvey Says Stage Set for 3 Core Platforms to Ignite; D9s Stall on Production Snafu

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