The Future of the Cannabis Beverage Market

In the United States, marijuana is now legal in some capacity across 36 states and Washington, D.C. In Canada, recreational marijuana has been legal nationwide since 2018. The growing number of consumers with access to legal marijuana has had massive impacts on the industry, with Euromonitor International expecting legal cannabis sales to increase from $30 billion in 2020 to $90 billion in 2025. One sector of the marijuana industry seeing especially noteworthy growth is the cannabis beverage market.

The Cannabis Beverage Market

The cannabis beverage market consists of a wide range of products but can be broken into two main categories: CBD-infused beverages and THC-infused beverages.

CBD-Infused Beverages 

Beverages infused with CBD, have no psychotropic effects since they do not contain THC, the main psychoactive component of marijuana. They are, therefore, legal in all 50 states and the growth of their sales is not reliant upon continued or increased legalization of recreational marijuana. CBD-infused drinks include non-alcoholic wine, kombucha, water, and cold-brew coffee. The goal of these beverages is to provide the health advantages of marijuana without the mind-altering effects.

THC-Infused Beverages

The defining characteristic of THC-infused beverages is their psychoactive effect, due to the inclusion of THC. THC-infused beverages may also contain CBD (though CBD-infused beverages do not contain THC). THC-infused beverages may be either alcoholic or nonalcoholic.

Target Consumers of the Cannabis Beverage Market

A major target of cannabis beverages is those new to marijuana. Beverages provide a more familiar and potentially less intimidating way to try cannabis since there is no barrier to entry (everyone knows how to drink a beverage). Additionally, beverages are often more socially acceptable than other forms of marijuana, such as smoking.

Source: MJBizDaily
Source: MJBizDaily

Cannabis beverages also appeal to consumers looking for more health-conscious options. Soft drink consumption has fallen for the last thirteen years in a row. As consumers search for beverage options with lower calories, sugar, and carbs, cannabis beverages have stepped in to fill the void. Producers of cannabis beverages have also targeted consumers looking to reduce their alcohol consumption but who still want something to help them relax.

Cannabis Beverage Growth Outlook

By 2025, the cannabis beverage market is expected to reach $2.8 billion. Though the overall cannabis market is large, beverages still account for only 1.2% of the total market, as of 2021 (though this is up from 1% in 2018). Millennial consumers, who make up the largest segment of cannabis beverage consumers, are expected to largely fuel this growth.

Though growth is anticipated in Europe (specifically in Germany, the U.K., and the Netherlands) the largest growth is expected in North America, due to increased legalization.

Top Players in the Cannabis Drink Market

Due to legalization at the national level, most of the top players in the cannabis beverage market reside in Canada. The cannabis beverage market is made up largely of medium and small-scale companies, and is therefore heavily fragmented, though a few major players in the cannabis beverage market still exist. Some of the biggest names in the market include Canopy Growth (NASDAQ: CGC)(TSX: WEED), New Age Beverages Corporation (NASDAQ: NBEV), Koios Beverage Corporation (OTC Pink: KBEVF) (CSE: KBEV), Phivida Holdings Inc (owned by Choom (OTCQB: CHOOF)), Dixie Brands (now BellRock Brands, Inc. (OTC Pink: DXBRF) (CSE: DIXI.U)), VCC Brands, and Hexo Corp. (NYSE: HEXO) (TSX: HEXO).

Other major players include established beverage manufacturers venturing into the cannabis market. For example, Heineken launched Hi-Fi hops (through its Lagunitas label), a non-alcoholic beer infused with THC and CBD, which has zero carbs and zero calories.

The Takeaway

The cannabis beverage market currently accounts for only a small percentage of the cannabis market, but its accessibility and health-conscious image make it a market with strong potential for continued growth.

Disclosure: Neither Matt Rego nor Spotlight Growth have any position or relationship with any companies mentioned in this article. No payment was made to create this article. This article should not be taken as a solicitation or recommendation to buy or sell any securities. Please conduct your own research and consult your financial advisor to determine your risk tolerance and investment path. We are not licensed brokers or investment advisors.

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Source: SpotLight Growth Canabis
The Future of the Cannabis Beverage Market
SpotLight Growth Canabis

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