Are Cannabis Drinks Here To Stay?

The cannabis beverage industry is still in its infancy and is showing signs of significant growth. Several big players have entered the market in recent years and new products are launched regularly. Historically, the focus has been on THC-infused beverages, but the wellness benefits associated with CBD have also increased interest in these beverages.

As the market develops, we can expect more innovation and variety in cannabis-based beverages. Let’s take a look at where the cannabis beverage market is headed.

Why are cannabis drinks so popular?

Several characteristics make cannabis beverages attractive to newcomers: ease of consumption; Discretion; fewer health concerns; and less stigma associated with methods such as smoking or vaping. Cracking open a can is more socially acceptable than lighting a joint or putting drops of oil under your tongue. Additionally, for many, consuming a cannabis-infused beverage may simply be more pleasurable than other methods of consumption.

Cannabis drinks are a class of edibles and they have advantages over other edibles. Edibles have a slow onset of effects, which can cause you to take too much or feel the effects too late when you no longer want them. The effects of cannabis drinks typically come on quickly, as the cannabinoids are absorbed into the bloodstream primarily through the mouth and under the tongue (sublingual), but also in the stomach. This means you’ll feel the effects in real-time rather than having to wait, making it easier to find the right dose and avoid over-consumption. Drinks come in a variety of dosages — 2.5–25mg of THC or CBD is common, and the two cannabinoids are often combined in one product.

The general wellness market continues to grow, and much like gummies and oils, CBD or THC-infused beverages are filling a demand. Consumers are often looking for drinks that are low in alcohol, sugar and calories. Alternative edibles like baked goods and candy are often considered unhealthy because of their high sugar or fat content. Beverage labels with statements such as “chemical-free”, “all natural” or “organic” are very popular with modern consumers.

Additionally, new technologies are emerging to address processing and packaging challenges, and distribution channels such as pot shops, bars, and restaurants have increased consumer exposure to a range of products.

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Societal and technical barriers to cannabis-infused beverages

It’s certainly not easy for makers of cannabis-infused beverages. In the early days of the industry, there were a variety of formulation and packaging issues. In the manufacture of cannabis drinks, a cannabis oil is dissolved in a liquid and if the resulting oil droplets are too large, it can result in low potency.

There is also the problem that some of the oil may be absorbed by the packing liner. The combined effect of these two issues raises concerns that consumers may not be consuming the THC or CBD concentration advertised on the label.

There are also complex regulatory obstacles to overcome, including packaging design limitations. For example, depending on regional restrictions, packaging may need to be child-resistant, opaque, durable, or tamper-resistant.

One limitation hampering the sale of Canadian cannabis beverages is the strict limit on how much can be purchased at one time. Canadian consumers can only purchase up to five 12 ounce drinks at a time, regardless of THC content. While there are moves to increase the limit, there are concerns that this restriction will prevent shoppers from trying out new products. Another issue in Canada is the limit of 10 mg THC per drink – there are fears this is too low and could drive consumers to illegal products.

As with any cannabis product, there are safety concerns associated with overuse. For this reason, it is important to buy legal products and to check that a brand provides a certificate of analysis for each product.

While the stigma on beverages is lower than on other cannabis products, it hasn’t completely disappeared. Even in regions where cannabis is legal, there is still resistance to the purchase and use of medicinal and recreational cannabis. As such, it may be a long time before cannabis beverages compete with alcoholic beverage sales.

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How many people buy cannabis drinks?

A Headset cannabis beverage report compares sales to the overall beverage market. It shows slow, steady growth for cannabis beverages in the US, where they held a 1.1% share of the total beverage market in January 2022, up from 0.9% in January 2020. The growth was evident in the Canadian market due to more more pronounced recent legalization, with cannabis beverages accounting for less than 0.2% of the beverage market as of 2020, rising to nearly 2% in early 2022.

Headset also provides insight on the performance of different product segments in the Cannabis Beverages market. In Canada, carbonated beverages dominate cannabis beverages with 50% of the market share. Cannabis-infused water is also a big seller, accounting for 20% of cannabis beverages.

Things are a little different in the US, where three segments each account for about a quarter of the weed beverage market: Drips, Mixes, Elixirs, and Syrups: 28%; carbonated beverages: 26%; and iced tea, lemonade and fruit drinks: 22%.

Another interesting trend highlighted by Headset is the price of cannabis-infused beverages. Average item prices in the established US market have fallen slightly over the past two years, from around $14.50 to the $12 mark. Canadian beverages started 2020 at a similar price of about CAD$16 (US$12.30) but dropped dramatically to about CAD$6 (US$4.60) by July 2020 and has remained at that price ever since.

Where is the cannabis beverage market headed?

There are some big players in the cannabis beverage industry, including Keef, Cann, Levia, PTS, and Select, among others. These companies typically serve different target markets, of which there are many. For example, Keef’s bright packaging and sugary drinks will appeal to a different audience than Levia’s low-sugar seltzer. One thing the big players have in common is their ability to form solid manufacturing and distribution partnerships.

The breadth of the beverage industry and the space to grow within it means there’s ample room for other companies to jump in and shake things up. You only have to look at the lineup for an event like Cannabis Drinks Expo to see all the new attendees. Smaller companies may struggle with production and distribution, but even if larger companies dominate the market, we could still see demand for unique products in small batches, similar to trends in the craft beer industry.

As is usual in an industry with multiple small players, mergers and acquisitions, as well as alliances, partnerships, and joint ventures are common. There is a lot of product innovation and the introduction of new technologies in the cannabis beverage space, particularly in relation to processing and packaging.

The cannabis beverage industry is expected to continue growing strongly, although how quickly it will expand is up for debate. Increased demand driven by wellness trends and increasing access driven by legalization are supported by advanced production technologies and ease of distribution. There are still obstacles to overcome, including strict rules and regulations and some remaining stigma, particularly in regions where recreational cannabis use remains illegal. While it’s likely a long time before cannabis beverages truly compete with the alcohol industry, it’s clear that THC and CBD-infused beverages are here to stay.

Aimee O’Driscoll

Aimee is a freelance writer and editor based out of Toronto. She has a degree in medicinal chemistry and was a chemist for a multinational cosmetics company for almost ten years. Aimee has a passion for educating readers by breaking down complex science and technology topics.

Check out Aimee O’Driscoll’s articles

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