CANNABIS BEVERAGE MARKET ANALYSIS

Market Size and Trends

Global cannabis beverage market is estimated to be valued at USD 205.1 Mn in 2024 and is expected to reach USD 849.3 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 22.5% from 2024 to 2031.

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The legalization of cannabis for medical and recreational use across various countries like U.S., Canada, and selective European nations is driving the market growth. Wide acceptability of cannabis infused beverages as a healthier alternative to alcohols can boost its demand. Growing awareness about therapeutic benefits of cannabis in conditions like chronic pains, arthritis and insomnia has been augmenting the sales of cannabis infused drinks.  The market is expected to witness robust growth during the forecast period, owing to rising millennial population, changing consumer preference towards wellness drinks with functional benefits and expanding retail distribution. However, lack of standardization and guidelines related to use of cannabis as ingredients along with complexity in production is anticipated to hinder the market growth.

Growing Social Acceptance of Cannabis

Global cannabis beverage market is witnessing strong growth due to growing social acceptance of cannabis worldwide. Over the past decade, several countries have legalized recreational and medical use of cannabis due to its medicinal properties and growing evidence that it is less harmful than alcohol. The social stigma associated with cannabis consumption has reduced considerably as people have become more aware of its benefits. Even in regions where cannabis is still illegal, its consumption is not seen in negative light like before. Young population in their 20s and 30s have grown up in environment where cannabis is almost seen as normal and there is little moral opposition to using cannabis infused products. This generation now prefers cannabis drinks as a social and healthy way of enjoying cannabis' psychoactive properties. Their greater spending power and adventurous attitude supports the market growth. Furthermore, senior citizens are also finding medical use of cannabis due to conditions like arthritis pain, thus, boosting its demand. With more countries expected to legalize cannabis in the near future, social acceptance is likely to boost further.

Market Concentration and Competitive Landscape

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The launch of innovative cannabis infused beverages is significantly driving the growth of the global cannabis beverage market. More and more companies are introducing novel beverage products containing non-intoxicating cannabidiol (CBD) or tetrahydrocannabinol (THC) which provides recreational effects. CBD-infused beverages in particular witnessing high demand as they provide therapeutic benefits like reduced anxiety and stress without the "high" feeling.  Currently, the demand for cannabis infused beverages is high among millennials and Generation Z consumers who prefer wellness drinks offering health advantages. Manufacturers are leveraging this opportunity by launching varied beverage types infused with CBD and/or THC extracts, including sparkling waters, cold-brew coffees, relaxation teas and workout recovery formulas. They are also utilizing advanced nanoencapsulation technology that allows quicker absorption of cannabinoids in the body compared to traditional methods. This enhances the functional experience for consumers. Several mainstream beverage giants have entered the market to cash in on the future potential. For instance, The Coca-Cola Company inked deals with Canadian cannabis producer Aurora to develop CBD-based beverages. Similarly, Constellation Brands invested over USD 4 Bn in leading cannabis company Canopy Growth Corporation to create cannabis-infused drinks. Such strategic investments and partnerships between cannabis and beverage leaders will accelerate innovations. It will also help improve accessibility of cannabis products as the market expands globally in the coming years.  As reported by the United Nations Office on Drugs and Crime in 2020, the use of cannabis for medical and recreational purposes is increasing worldwide. The report stated that cannabis plant cultivation has spread to all continents except Antartica in recent times. This changing social attitude coupled with imminent legalization of cannabis in more regions indicates the cannabis beverage industry will have robust long-term growth prospects internationally.

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Strict regulations regarding the maximum allowed THC content in cannabis-infused beverages can hamper the growth of global cannabis beverage market. Many countries and states have put very low caps on the amount of psychoactive THC that can be present in a single serving of a cannabis drink. For example, Canada allows only 2mg of THC per serving while some U.S. states have even lower limits of just 1mg. Given that the onset of effects from edible and drinkable cannabis products is slower than smoking, most consumers prefer higher doses to feel the full intended impact. However, maintaining THC levels above the regulated limits would make the products non-compliant and illegal to sell.  This forces beverage companies to artificially dilute the cannabinoid concentration in their offerings to abide by the laws. As a result, consumers may need to consume unreasonably large volumes to perceive desirable benefits, defeating the purpose of the drinks. With so little THC per serving, the effects are underwhelming and fail to offer a worthwhile cannabis-enhanced experience. This hampers its demand potential. According to a 2021 report by the UN Office on Drugs and Crime, over 50% of edible cannabis consumers in North America claimed that currently available low-dose products did not meet their needs and prevented wider acceptance of the form factor.

Opportunities: Potential to target a wider consumer base with cannabis infused alcohol-free drinks

Targeting the wider consumer base of health-conscious individuals with cannabis infused non-alcoholic drinks could be a major growth opportunity for the global cannabis beverage market. As awareness about the health impacts of excessive alcohol consumption grows, many consumers are increasingly interested in alternative social drinks that provide the experiential benefits of alcohol. Cannabis infused beverages that deliver a pleasurable consumer experience but without any alcohol offers opportunities for growth of market.  According to a 2021 survey by the World Health Organization, around 35% of countries reported an increase in individuals abstaining from alcohol in social settings due to growing health concerns. This presents a massive addressable audience for the cannabis beverage industry. With the health virtues of cannabis gaining wider acceptance through ongoing research, cannabis infused alcoholic drinks may be viewed more favorably than traditional alcohol by many consumers seeking a healthier alternative for socialization. Beverage companies that can successfully deliver satisfying experiential qualities through precise cannabinoid formulations stand to gain considerably in this evolving market landscape. 

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In terms of product type, non-alcoholic segment is estimated to contribute the 67.4% market share in 2024 due to rising health consciousness among consumers. The non-alcoholic segment is gaining popularity as consumers, especially millennials and generation Z, are increasingly focusing on their health and wellness. People want beverage options that provide relaxation and mood enhancement benefits of cannabis without the intoxicating effects of alcohol. This has boosted demand for cannabis infused drinks that contain no or low calories. The availability of exotic fruit and botanical flavored non-alcoholic beverages appeals to young experimental consumers. 

Insights, By End User: growing social acceptance drive the segment

In terms of end user, restaurants & cafes segment is estimated to contribute the 42.2% market share in 2024 due to growing social acceptance. As the legalization of cannabis spreads across regions, the social stigma associated with cannabis is waning. More restaurants and cafes are introducing cannabis infused beverages in their menus to leverage its growing demand. The restaurants are promoting the unique effects and taste profiles of various cannabis beverages to attract new customers and enhance guest experience. This helps boost their revenue as customers tend to order extra food and other beverages when incorporating cannabis drinks into their dining experience. 

Insights, By Distribution Channel: Ease of purchase drives online retail segment growth

In terms of distribution channel, online retail segment is estimated to contribute the 39.3% market share in 2024 due to consumer convenience. Busy lifestyles leave little time for shopping at physical stores. The ease of purchasing cannabis beverages online from the comfort of home and getting them delivered right at the doorstep resonates well with time-starved consumers. Online retail channels offer a diverse selection of cannabis drinks for customers to choose from as compared to local stores. Websites and mobile apps of cannabis retailers provide detailed information about each product along with reader reviews and ratings to help buyers make an informed choice. This transparent access drive the growth of online retail segment.

Regional Insights

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North America represents the largest regional market for cannabis beverages with estimated 36.7% market share in 2024. The U.S., with its massive consumer base and growing range of states having legalized both medical and recreational cannabis use, provides cannabis companies an attractive market to enter. With states like Colorado, Washington and California being amongst the earliest to enact progressive cannabis laws, the region has gained significant first-mover advantage in this emergent industry.  Major beverage companies have also established facilities in West Coast states, aiding production and supply chain integration. Constellation Brands' multi-billion dollar investments in Canopy Growth is a prime example of such strategic moves aiming to capitalize on increasing demand. This enhances accessibility for cannabis beverages across various outlets in leading U.S. states currently.

Among expanding international markets, Europe exhibits immense potential as the fastest growing regional market for cannabis beverages. While medical cannabis is legally accessible in many European nations, regulations continue evolving towards more liberalized frameworks. For instance, Luxembourg became the first country on the continent to legalize recreational cannabis use in 2021, opening up new possibilities. Countries like Germany have also granted approvals for cannabis flower and extracts to be sold through pharmacies, spurring local industries. Leading firms have already proactively made acquisitions and partnerships in nations like Germany and the U.K. to build local production capabilities and brand presence. The relaxation of policies regarding CBD use across Europe has also helped popularize cannabis infused beverages.

Market Report Scope

Key Developments

• In February 2024, the most extensive cannabis beverage production plant launched in U.S.
• In 2021, Cann launched the initial cannabis-infused, caffeinated beverage
• In May 2021, Molecule introduces molecule crafted (TM) cannabis beverage portfolio
• In 2021, Molecule Holdings Inc. launched Canajo, the first coffee-flavoured cannabis beverage

*Definition: Global cannabis beverage market consists of all marijuana-infused drinks including sodas, teas, juices, alcoholic beverages and more containing active cannabinoids like THC and CBD. The demand for these products is growing rapidly as more consumers seek healthier ways to consume cannabis instead of smoking it. Companies in this market develop innovative beverage formulas and products containing precise doses of marijuana compounds for both medical and recreational use.

Market Segmentation

• Product Type Insights (Revenue, USD Mn, 2019 - 2031)
  • Alcoholic
  • Non-alcoholic
•  End User Insights (Revenue, USD Mn, 2019 - 2031)
  • Household
  • Restaurants & Cafes 
  • Others
•  Distribution Channel Insights (Revenue, USD Mn, 2019 - 2031)
  • Convenience stores
  • Hypermarkets
  • Specialty Stores
  • Online Retail
  • Others
• Regional Insights (Revenue, USD Mn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Aurora Cannabis Inc.
  • Aphria Inc.
  • Canopy Growth Corporation
  • MedReleaf Corp.
  • Cronos Group Inc.
  • GW Pharmaceuticals, plc.
  • CannTrust Holdings Inc.
  • VIVO Cannabis Inc.
  • BevCanna Enterprises Inc.