A budding market: Cannabis drinks hit a high.
Anyone who thought the legal cannabis boom would bust should think again. While admittedly the industry isn’t growing like weeds as it once was, it’s still on the rise.
Despite differing laws throughout the world (and in the case of the United States, throughout the country), global legal marijuana sales are expected to hit $55 billion by 2026. That will be up from just $30 billion in 2021.
This should be no surprise if you’ve been following legalization news. Last year, Maryland and Missouri residents voted to legalize the plant, bringing the tally of states that allow recreational use up to 21. Across the Atlantic, Germany is working on becoming one of the few European countries to make personal, recreational marijuana legal.
So, what’s next for an industry still trying to find its way while catering to a growing number of customers? If the latest trend is any indication–it’s beverages.
Many beverage industry players seem to have their eye on cannabis-infused drinks. Last year, the market share of these beverages jumped around 40 percent and new brands are popping up everywhere.
Take Boston Beer Company, known for its Samuel Adams Boston Lager, Twisted Tea, and Angry Orchard products. Last year, the beverage giant released their first THC-infused iced teas in Canada (where recreational marijuana is legal). In California, Heineken-owned Lagunitas, which infamously got shut down in 2005 for a cheeky cannabis pun, is revamping its previously-released line of THC seltzers.
New and smaller companies are also looking to smoke the competition with their cannabis infusions. Last year, Michigan entrepreneurs launched the THC seltzer brand Highly Casual. The Gwyneth Paltrow-backed company Cann also made a splash in 2022 with its holiday campaign for cannabis-infused drinks.
While Cann’s holiday ad showed off marijuana infusions as an alternative to traditional wine, beer, and spirits, the market still has growing to do to catch up to alcohol. However, the rising popularity of nonalcoholic beverages might give cannabis drinks a big boost, especially when coupled with the growth of legal marijuana.
Fortunately for the industry, more consumers are becoming aware of these beverages. In 2021, 51 percent of American adults knew what THC drinks were–that’s 9 percent more than the previous year.
Cannabis drinks only make up a little more than 1 percent of the legal weed market, but many signs point to growth in this innovative sector. You can also expect to see more products and brands as more American states legalize marijuana. “Cannabis legalization in America seems like it has some level of inevitability,” Boston Beer Head of Cannabis Paul Weaver told Wine Enthusiast.
While customers currently prefer products like weed-infused food and vapes, the future looks bright for THC drinks. Last year, U.S. stores reported three times more sales of these beverages compared to 2021.
Those entering this niche are undoubtedly thinking about a host of issues like regulations and consumer awareness. But while this new frontier has many hurdles that could affect its growth, brands shouldn’t forget about the one thing that could make or break the market: taste. Ultimately, if customers interested in THC-infused drinks don’t enjoy the taste, they won’t buy them.
The cannabis beverage space might still be in its infancy, but greener pastures await if brands can win repeat customers as recreational marijuana continues to be legalized.
Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.