The cannabis industry has seen tremendous growth over the past few years since the legalization of cannabis for both medical and recreational use in several parts of the world. While smokable cannabis products like flower, oils and vapes have dominated the market, cannabis infused beverages are emerging as a new trend. Cannabis infused beverages offer consumers a discrete and familiar way of consuming cannabis without the risks associated with smoking. With consumers, especially younger demographic preferring alternative consumption methods, cannabis beverages are attracting a lot of attention from both consumers as well as big beverage companies.
Coherent Market Insights explores in Cannabis Beverage Market how these beverages offer consumers a discreet, easy-to-dose consumable form of cannabis that provides the effects of edibles without the commitment of a large serving size.
Rise of Cannabis Beverage Companies
A wave of new cannabis beverage companies has emerged to cater to the rising demand for cannabis infused drinks. Companies like Cann and Lagunitas have launched THC infused beverages, while others like Keef, DrinkDaily and CannaPunch offer CBD infused drinks. These cannabis beverage startups are launching innovative drinks across a variety of categories like sodas, cocktails, juices, teas and more. Meanwhile, some established beverage giants have also started investing in this space. Constellation Brands, which owns Corona beer, has invested over $4 billion in cannabis producer Canopy Growth. Molson Coors has partnered with Hexo Corp to launch cannabis infused drinks in Canada once regulations allow. Such partnerships indicate big beverage companies are eyeing cannabis drinks as the future opportunity.
Growing Product Segmentation
The cannabis beverage market is witnessing growing segmentation in terms of product types offered. Along with the traditional drink formats like sodas, juices and teas infused with THC or CBD, companies are innovating new products. Cannabis infused energy drinks, kombuchas, cold brew coffees and sport drinks are emerging as new categories. Functional beverages that provide specific medical benefits are also driving demand. For example, marijuana infused drinks for pain relief, better sleep or as an Anti-Inflammatory Drugsare attracting health conscious consumers. Furthermore, cannabis drinks are available in varying potency levels to suit a variety of consumer needs from wellness to recreational use. Drink formats are also being customized for specific occasions – day time social drinks vs. evening relaxation drinks. Such innovations and customization are fueling growth in this space.
Health & Wellness Angle
A major factor contributing to the rising popularity of cannabis drinks is the wellness aspect. Consumers are shown to perceive cannabis infused beverages as a healthier alternative to smokable products or edibles. Drinking cannabis is considered a discreet and clean way to consume with little to no odor. Health issues associated with smoking like lung irritation are eliminated. THC or CBD infusions in drinks are also promoting specific wellness benefits like relaxation, pain relief, better sleep, mood enhancement etc. This wellness angle resonates more with newer adult consumers who did not grow up with the traditional cannabis culture. Therefore, beverage companies are positioning their products as health tonics with customized cannabinoid profiles. The wellness positioning is driving wider adoption beyond regular cannabis users.
Government Regulation & Dynamics
Government regulations vary widely across different states and countries when it comes to cannabis products. In the United States, cannabis remains illegal under federal law but states where it is recreationally legal allow cannabis infused beverages. However, drink regulations are much stricter with limits imposed on packaging, advertising and serving. This is due to public safety concerns over accidental over consumption and safety of kids. Certain drink formats like sodas are sometimes banned. Canada on the other hand, federally legalized cannabis and has clearly defined regulatory framework for edibles and beverages. Drinks have a delayed onset period to avoid accidental over-consumption. Governments in emerging cannabis markets are still developing regulations tailored for their needs. Such varied regulatory landscapes impact the opportunities and growth trajectory for cannabis drink makers in respective regions. Companies need to comply with complex and evolving rules to succeed.
Market Outlook
The global cannabis beverage market outlook is promising driven by wider legalization, growing adoption among new consumers and increasing innovation. North America currently dominates this space due to early legalization in Canada and some US states. However, new frontiers like Europe and Latin America are opening up supported by changes in public perception and policy reforms. The Asia Pacific market also holds substantial opportunities in the long run as regulations liberalize. While the MEA region will take longer to develop, early adopter countries could emerge as well. The market is forecast to multiply exponentially over the next five to ten years supported by declining social stigma, a surge in wellness consumers, development of social use occasions and an expanding product portfolio beyond traditional CBD/THC drinks. Continuous innovations, strategic marketing and adapting to dynamic regulations will determine winners in this space. For more detailed analysis, please refer this market research report on Cannabis Beverages published by Coherent Market Insights.
