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- Cannabis-based concentrates, extracts, and edibles are becoming highly popular among consumers
- Specifically, the edible and beverage marketplace is quickly gaining popularity due to the ease at which customers can use the products
NEW YORK, July 16, 2019 — Each year, more and more countries are moving towards approving cannabis use. In particular, medicinal cannabis is witnessing immense support as most of the countries looking to enter into the market space are more keen on the medical sector due to the therapeutic benefits associated with cannabis. However, several regions around the world have also either decriminalized or legalized the use of recreational cannabis in moderate amounts. For instance, Canada completely legalized adult-use cannabis in late 2018. On the other hand, countries such as Colombia and Spain have only decriminalized recreational use, allowing adults to possess up to a certain amount.
Moreover, the U.S. has given states the jurisdiction to legalize cannabis or keep the drug illicit. As a result, more than half the U.S. legalized cannabis for medical use, while a fifth of the nation, including the District of Columbia, allows for legal recreational usage. While the medical marketplace is much more globally prevalent, the recreational market is expected to overshadow the medical segment as the North American market continues to mature.
Additionally, as the recreational market continues to expand, consumers are also experiencing an influx of new products. Aside from traditional cannabis flower, consumers can now choose from a variety of products at dispensaries and retail stores. Now, cannabis-based concentrates, extracts, and edibles are becoming highly popular among consumers. Specifically, the edible and beverage marketplace is quickly gaining popularity due to the ease at which customers can use the products.
Furthermore, a large recreational user base exists for the edible and beverage market, and the industry is heavily being accelerated by the increasing demand for wellness products to treat a variety of health concerns. According to data compiled by Reports and Data, the global cannabis-based beverage market was valued at USD 1.57 Billion in 2018. By 2026, the market is expected to reach USD 5.04 Billion while exhibiting a CAGR of 15.4% during the forecast period.
The cannabis-infused edible and beverage market is expected to witness a strong increase in demand, particularly for beverages over the next several years. Canaccord Genuity analyst Bobby Burleson noted last year that beverages packed with CBD or THC ingredients can account for nearly 20% of the U.S. edible products markets by 2022, increasing from 6% in 2018. Burleson highlighted that the growing beverage industry is becoming an attractive investment opportunity for beer and soda makers and that data has shown that there is a direct correlation between alcohol and cannabis consumption.
A joint research conducted by the University of Connecticut, Georgia State University, and Universidad Del Pacifico discovered that counties located in medical marijuana states witnessed a 15% reduction in monthly alcohol sales. The conclusion of the study uncovered that cannabis and alcohol are both substitutes for one another, meaning that they share the same target audience. The study also indicates that as more countries move towards cannabis legalization, more users will be inclined to shift over to the cannabis market. The shift has even prompted alcohol producers to enter into the cannabis industry to maximize its consumer base reach.
While alcohol beverage producers may look towards developing THC beverages, soda producers are looking to leverage CBD for health and wellness beverages. Soda producers are specifically focusing on CBD because of the consumer shifts from sugary drinks to more functional options. Regardless of the market type, Canaccord expects both the THC and CBD-based beverage markets in the U.S. to experience growth, as by 2022, Canaccord expects the demand for CBD beverages to reach USD 260 Million, while THC beverages are projected to reach USD 34 Million. “Interest has spiked from the beer industry on mounting evidence of a substitution relationship between cannabis and alcohol, while large soda companies increasingly view CBD as a natural fit within their strategically important wellness offerings,†Burleson wrote.
Read More: https://www.prnewswire.com/news-releases/cbd-based-functional-drinks-charm-health-conscious-consumers-300885358.html
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