Sales of cannabis infused beverages rose 40% over the past year as companies sought new marijuana users looking for a familiar form of consumption and those looking for an alternative to alcoholic beverages.
Marijuana beverage companies, for example, have benefited from health-related trends like dry January when alcohol drinkers abstain for a month and look for alternative ways to relax.
“People are very aware of the effects alcohol can have on their health and appearance,” said Tracey Mason, co-founder and CEO of the cannabis-infused, non-alcoholic wine company House of Saka in California’s famous Napa Valley wine region.
According to Seattle-based cannabis analyst Headset, sales of marijuana infused beverages rose 40.3 last year from 2019 in recreational markets in California, Colorado, Nevada, Oregon (medical and adult use) and Washington state %.
Cannabis infused beverage sales increased from $ 67.8 million in 2019 to $ 95.2 million in 2020.
This category barely drowned out the growth of the overall marijuana market, which grew 39.4% over the same period.
Despite the strong growth, the infused beverage market remains a small part of the overall marijuana product mix.
The market share of cannabis beverages has been relatively constant over the past three years and was 1% for annual share in 2018, 2019 and 2020, according to Headset.
However, the market share of cannabis beverages appears to increase in early 2021 with a share of 1.2% since the beginning of the year.
The strong demand for infused beverages has not supported prices – at least not yet.
LeafLink cannabis wholesale market, with offices in Los Angeles and New York, reports that marijuana beverage prices are trending.
As of January 2021, the average wholesale price of cannabis beverage products at LeafLink was $ 8.58 per serving, down 1.1% from $ 8.67 in January 2020.
Throughout 2020, the wholesale price of infused beverages sold on LeafLink fluctuated sharply, hitting a high of $ 8.75 in April and a low of $ 7.59 in June.
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It may seem obvious, but people know how to have a drink.
This familiarity helps the beverage category attract new customers who may be intimidated by the prospect of rolling a joint or picking up something even more involved like a swab rig.
“There is no need to smoke or light a drink,” said Lindsay Levin, director of marketing and sales for Fluresh, a vertically integrated cannabis company based in Grand Rapids, Michigan.
Packaged drinks are also part of a normal lifestyle.
Say you have lunch or stop at a gas station for a drink, said David Farris, vice president of sales and marketing at Planet 13, a vertically integrated cannabis company based in Las Vegas.
“Drinks are accessible,” he added.
Matt Melander, CFO of Levia, a cannabis-infused seltzer brand based in Georgetown, Massachusetts, agreed that familiarity with beverages can help attract new consumers to marijuana.
“Everyone knows how to crack a can lid,” he said.
Drinks are more acceptable than smoking, even in a social situation.
“You can pour a drink anywhere,” said House of Sakas Mason.
She added that the company’s sales spiked in dry January, month-to-month only through April, spurring an increase from 4/20, the unofficial cannabis holiday.
To this end, consumers looking to avoid the hangover or the higher calories and sugar associated with other cannabis foods can turn to a product like sparkling water.
“There are absolutely many consumers looking for alternatives to alcohol,” said Levin in Michigan.
This is in line with what Levia is trying to produce. Troy Brosnan, co-founder and chief operating officer, said the company’s goal is to create a sugar-free, calorie-free cannabis product.
Farris in Nevada agreed that consumers view beverages as a healthier option.
“There’s a big market out there looking for a more health-conscious alternative to smoking,” he added.
One of the challenges with cannabis infused beverages is competing with the quick sense of relaxation that a glass of wine or beer can provide.
Liz Gottbrecht, director of brand marketing at Lantern, a Boston-based cannabis e-commerce marketplace, emphasized the importance of fast-acting marijuana beverages.
“Most consumers already have experience of consuming an alcoholic drink and know when to expect that feeling,” she said. “It relieves me of ‘I wonder how this will affect me?'”
Several beverage manufacturers claim that their products take effect in as little as five minutes after being soaked.
Fluresh makes a “drink booster”, which is a cannabis-infused liquid that is supposed to be added to another drink for 15 minutes. Levin said consumers like control over dosage and experience.
The fast-acting products also help prevent the common mishap of inexperienced consumers ingesting one edible product, not feeling the effect immediately, then getting impatient and ingesting another – and consuming too much.
“As more and more consumers come to this market, they are looking for it,” added Levin.
Melander sees the future of drinks as “limitless” when you consider that drinks can be served at major events such as concerts or art shows.
Mason agreed, saying that as cannabis extraction technology and innovation improve, the quality of beverages will also improve.
While there may still be a long way to go before customers can walk into a bar and order an infused drink, several licensed cannabis markets have begun licensing lounges for public consumption that many companies consider to be good for drinks.
“This is going to be a really exciting change in cannabis acceptance and in mainstream society,” said Gottbrecht.
Bart Schaneman can be reached at [email protected].