Cannabis Beverage Market – Insights
Cannabis beverages includes different types of alcoholic and non-alcoholic beverages which are infused with cannabis or marijuana. Rising concerns regarding hangovers and calorie-intake among consumers has encouraged companies operating in the food & beverages industry to invest in production of cannabis infused drinks.
The global cannabis beverage market was valued at US$ 205 million in 2018, and is expected to exhibit a CAGR of 38.3% over the forecast period (2019-2027), to reach US$ 2743.7 million by 2027.
Shifting preference of consumers towards cannabis from alcohol for recreational purposes is expected to drive the growth of the global cannabis beverage market in the next few years. The trends in consumption rate of alcohol and cannabis are diverging substantially in recent times. Growing consumer awareness regarding the hazardous effects of alcohol on human health has led to decrease in alcohol consumption among consumers. According to the U.S. National Survey on Drug Use and Health, 2.4 million people in U.S., over the age of 12, started using marijuana in 2013, which is around 6,600 new users on an average in a day.
On the basis of region, North America dominates the global cannabis beverage market with a significant share in 2018 in terms of revenue. In 2018, the U.S. legalized cultivation of hemp, which is obtained from the cannabis plant but contains lesser tetrahydrocannabinol (THC) content, by implementation of the 2018 Farm bill. This bill allowed broad cultivation of hemp and removed the restrictions on sale, transportation and possession of products which are derived from hemp. This is expected encourage companies to launch new products in the region.
Figure 1. Global Cannabis Beverage Market Share (%), Analysis, By Distribution Channel, 2018
Source: Coherent Market Insights, 2018-19
Furthermore, the increasing number of collaborations among leading companies with the goal of launching cannabis beverages is expected to fuel the growth of global cannabis beverages market. For instance, Hexo Corp., a Canada-based producer of cannabis products, formed a joint venture with Molson Coors Brewing Co., a producer of non-alcoholic beverages. In addition to this, in January 2020, Imaginary, a U.S.-based venture capital firm, invested US$ 5.0 million in Cann, an American company engaged in production and distribution of cannabis infused beverages.
Increasing recognition of cannabis for its medicinal and therapeutic benefits among consumers around the globe is likely to promote the growth of the global cannabis beverages market. Cannabis is used a medicinal drug owing to various health benefits that it provides such as blood pressure control, improvement in sleeping patterns, and relief from anxiety and depression. Extensive research has been done by pharmaceutical companies to produce cannabis-based medicines and treatments which are safe for health and do not cause any harmful side effects to the patients.
The cannabis extracts which are infused in beverages are mainly fat soluble i.e. they cannot dissolve in water. The key challenge for beverage manufacturers is to achieve proper mixing of cannabis extracts into the liquid and maintain the shelf-stability of the products. However, the fat-soluble nature of cannabis extracts means that its psychoactive effects are delayed and consumers end up consuming excessive quantities.
Figure 2. Global Cannabis Beverage Market – Opportunity Analysis
Source: Coherent Market Insights, 2018-19
Key players operating in the global cannabis beverages market are focusing on launching new cannabis infused beverage products. For instance, in 2018, Lagunitas Brewing Company, a subsidiary of Heineken International involved in production of craft beers, launched its new range of cannabis infused beverages named Hi-Fi Hops. Furthermore, Top Beverages, a craft distiller of spirits and alcohol, launched a range of cannabis-based alcoholic beverages in November 2019. This scenario is projected to drive the market growth in coming years.
Major players operating in the global cannabis beverage market include MedReleaf Corp., Cronos Group Inc., GW Pharmaceuticals, Plc., CannTrust Holdings Inc., VIVO Cannabis Inc., Tilray Inc., General Cannabis Corporation, Koios Beverage Corporation, New Age Beverages Corporation, Dutch Windmill Spirits, Heineken, The Supreme Cannabis Company, and SK Rodnik.