A new report reveals cannabis beverage sales will reach $2.8 billion by 2025, expanding at an annual compounded rate of 17.8%.
The market is highly fragmented in nature, owing to the presence of several small and medium scale companies. The majority of the companies are based in Canada, owing to the legalization of marijuana for medical and recreational purposes in the country.
The rise in the legalization of marijuana in order to eradicate the black market and to boost the tax revenue from legal sales of marijuana products is anticipated to positively influence the growth.
The rising popularity of wellness drinks is also expected to support the demand over the forecast period. The legalization of cannabis for medical and recreational purposes has had a strong impact on the sales of alcoholic drinks.
As a result, many alcohol manufacturers are investing in the growing trend of marijuana-infused drinks. For instance, Lagunitas, Heineken’s fast-growing California beer label, launched Hi-Fi Hops, which is a cannabis-based beverage with zero calories or carbs and is infused with Cannabidiol (CBD) and Tetrahydrocannabinol (THC).
In 2017, Constellation Brands, the third-largest beer manufacturer in the U.S., entered into a partnership with Canopy Growth – the world’s largest marijuana grower, to develop cannabis-infused beverages.
Consumers are shifting their preference from soft drinks to wellness drinks leading to the increasing sale of cannabis beverages. Low sugar content in drinks is the major driving factor for the growth of the market.
Also, consumers prefer these beverages as an alternative to cannabis smoking and consumption of marijuana-infused chocolates, cookies, brownies, and confectionaries like gummies and candies. Off-trade sales channels such as hotels, cafes, restaurants, clubs, and lounges are expected to boost the popularity of the product among consumers.
Strong demand for cannabis beverages from millennials is also anticipated to drive the market growth. As per a 2017 Yahoo News poll, the majority of the 55 million recreational marijuana users in the U.S. were millennials. Most millennials consume marijuana socially and only 25% of them consume it alone.
A 10-year study by researchers at the University of Connecticut and Georgia State University, completed in 2017, found that in U.S. counties where marijuana was legalized, wine and beer purchases decreased by 15%.
North America is estimated to be the fastest and largest market over the forecast period. The growth is majorly driven by the legalization of marijuana for medical and recreational purposes.
As per the National Conference of State Legislatures, a total of 33 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands have approved publicly available medical cannabis programs, resulting in the increased launch of several cannabis drinks. Also, 13 states in the U.S. allow the use of low THC and high CBD products for medical purposes, resulting in high demand for CBD infused cannabis drinks in the region.
Europe is estimated to witness strong growth over the forecast period, owing to a rise in cannabis consumers in the region. As per the Cannabis Trade Association, the number of CBD users in the U.K. increased from 125,000 in 2016 to 250,000 in 2017.
Also, the companies operating in the region are launching products to keep up with the growing trend of wellness drinks. For instance, Manchester-based CBD Ultra and Cloud 9 Brewing have launched U.K.’s first CBD Session IPA beer brewed with Cannabis Sativa extract.