Millennials have been at the forefront of change for quite a while now. They were the first generation to grow up with the internet, and they played a significant role in the development of e-commerce. They are also holding off on homeownership, are waiting longer to marry, and have fewer kids. They are not concerned with living the way past generations did; rather, they are doing their own thing, and society tends to follow in their steps. Now, the generation’s growing aversion to alcohol may very well revolutionize the beverage industry and elevate a burgeoning cannabis segment in the process.
The past few years have seen cannabis-infused drinks enjoy increasing popularity. With cannabis technology constantly improving, cannabis companies can now create smooth cannabis beverages of all kinds of flavors. Taking advantage of a growing movement that prefers to avoid alcohol, especially among millennials and the younger generation Z, these companies are offering these drinks as an alternative to alcoholic drinks. Even alcohol beverage brands such as Guinness and Heineken have noticed a decline in the demand for alcohol among the younger generations and have pivoted by offering low or even zero-alcohol beers.
According to data from the Centers for Disease Control (“CDC”) that was analyzed by research firm Cowen, there has been a 13% drop in binge drinking rates in states with legal cannabis markets with the rates of first-use cannabis increasing as binge-drinking rates reduced. Using this data as a base, Cowen projected that the cannabis market will grow from $50 billion in 2026 to $75 billion in 2030 while alcohol brands will see flat or slow growth.
However, the cannabis beverage segment is still quite small, making up just $174 million of the $11.3 billion worth of cannabis products sold in the United States in 2018, estimates from “Fortune Business Insights” show. One reason the segment is still quite small is that the technology required to make high-quality cannabis drinks is fairly new and, thanks to federal prohibition, plenty of companies have avoided cannabis beverages.
Furthermore, cannabis companies still struggle to infuse the substance into drinks, thanks to marijuana’s pungent aroma. This means that only beer, which has a stronger flavor compared to most wines, can successfully mask the aroma. There is also the risk that comes with cannabis edibles: they take up to an hour to kick in and, in the interim, there is a chance the consumer may overindulge as they wait for the effects to kick in.
Because of that, companies have taken to infusing drinks with an amount of THC that kicks in, peaks and fades at around the same rate as alcohol. Ultimately, only time will tell whether cannabis beverages will eventually replace alcohol, at least for millennials and gen Z.
The formulations by companies such as BevCanna Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) (FSE: 7BC) may play a pivotal role in drawing more adults to the cannabis drinks segment due to the improved tech being deployed during the manufacturing process.
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