America’s state-legal cannabis industry has come a long way from the days of prohibition. More than a dozen states have now legalized some form of cannabis, and although it is still illegal at the federal level, cannabis sales are booming. The controversial plant has gotten so popular that the industry is raking in billions of dollars in sales less than a decade after state legal sales began. Concentrates have been the most popular cannabis products, but in the past year or so, cannabis-infused beverages have started giving concentrates a run for their money.
Although cannabis beverages aren’t an entirely new concept, the quality was questionable until recently. Lyden Henderson from Outbound Brewing recalls trying a cannabis-infused beer back in 2019 and the experience was quite horrendous. The drink was chunky, with bits of cannabis floating around, he reported, and it had a very unpleasant texture. He compares it to drinking milk that had been in the fridge for four months and calls it one of the “grossest things” he had ever tried in his life.
But thanks to the industry’s lightning-fast technological advancements, cannabis-infused beverages are much better now. So good, in fact, that some people have started using them as alternatives to alcohol. A 2020 poll by data and intelligence firm Prohibition Partners found that 16% of Americans were interested in trying cannabis beverages and would probably do so within the next 12 months.
According to a recent report from the market analysis group, the global cannabis drinks space will grow at an annual rate of 45%, reaching a $5.8 billion valuation by 2024. Prohibition Partner’s co-founder and managing director Stephen Murphy says we are on the “cusp of a drinks revolution” and cannabis-infused drinks have the potential to disrupt the drinks market and generate a ton of revenue for businesses in the cannabis space.
It is not surprising that the cannabis drinks segment is projected to see significant growth in only a few years. CBD, a cannabinoid that is famous for its potent medical properties, has experienced major growth, with global sales rising from $3.4 billion in 2014 to $11 billion in 2018 and predicted to hit $23 billion by 2025. As per Prohibition Partner’s recent report, 25% of consumers said they would give cannabis beverages a shot and, of consumers who had already tried it, 28% expected to have another cannabis-infused drink in the next three months.
Most of these drinks contain either CBD, THC or both, depending on where they are developed and sold. Companies in states that don’t allow recreational marijuana can only infuse CBD into their drinks, and they are required to source the CBD from hemp. On the other hand, consumers in states with legal adult-use markets can enjoy drinks infused with both THC and CBD.
Several companies have shown interest in this still-untapped space, with companies such as Vita Coco, Ocean Spray, Lagunitas Brewing Company and Molson Coors Canada launching new lines of cannabis beverages. BevCanna Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) (FSE: 7BC) is also fast becoming a dominant player in the infused drinks space, both in Canada and the United States.
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