About two-thirds of Americans live in states where some form of cannabis is legal. Although it is illegal at the Federal level, 33 states have legalized medical cannabis and 10 states have legalized cannabis for adult recreational use. Canada legalized cannabis for medical use in 2001, recreational use in 2018 and in 2019 legalized cannabis edibles, extracts, and topicals. In the rest of the world, legalization varies by country but it has been decriminalized or made legal in some form throughout most of Central and South America and Africa. With cannabis legalized in so many locations throughout the world, the potential customer base for cannabis-infused beverages is quite large. According to a Yahoo News/Marist poll in 2017, in the United States alone, 54.5 million adults use marijuana, with 34.7 million adults using marijuana on a regular basis.¹

Today’s market size shows the worldwide revenues of cannabis-infused beverages for 2018 and projected for 2025. While THC-infused product demand is driven by adults who use cannabis for recreational purposes, CBD-infused products are mainly consumed for medicinal purposes.² Many consumers believe that CBD can treat chronic pain, anxiety, substance use disorders, and nervous system diseases among others. Growth in the cannabis-infused beverage market is expected to be fueled in part by rising demand for wellness drinks. Recently, cannabis consumer preferences have been turning away from smoking and toward the consumption of beverages, tinctures, chocolates, and other edibles. In the next few years, cannabis-infused beverages are expected to gain market share over other consumables that health-conscious consumers consider unhealthy, such as chocolates, cookies, brownies, and gummies. Those looking for healthier drinks tend to prefer nonalcoholic cannabis-infused beverages such as tea, water, carbonated beverages, and fruit and energy drinks. The nonalcoholic beverage category was the largest and fastest-growing segment in the market in 2018 with demand largely fueled by millennial women.

The alcoholic cannabis-infused beverage market was more than half the size of the nonalcoholic segment in 2018. Brewers are capitalizing on the cannabis-infused beverage demand by infusing their beers with THC and CBD. In some cases, brewers are partnering with marijuana growers to develop new products. In 2017, Constellation Brands, the third-largest beer manufacturer in the U.S., partnered with Canopy Growth, the world’s largest marijuana grower, to develop a line of new products. While trying to gain market share in this new product category, breweries may also be trying to maintain their market share overall. In a 10 year study at the University of Connecticut and Georgia State University, researchers found that in U.S. counties where marijuana was legalized, sales of beer and wine decreased by 15%.

By region, North America is the largest and fastest-growing market for cannabis-infused beverages and Europe is expected to see significant growth in the next few years due to the rising numbers of cannabis consumers in the region. Top companies in this industry include New Age Beverages Corp.; The Alkaline Water Co.; Phivida Holdings, Inc.; Koios Beverage Corp.; VCC Brand; Dixie Brands Inc.; Keef Brand; Hexo Corp.; Aphria; and Canopy Growth.

¹ Once or twice a month.
² THC stands for tetrahydrocannabinol. It is the chemical in cannabis that has psychoactive properties. CBD stands for cannabidiol. CBD does not have psychoactive properties.

Geographic reference: World
Year: 2018 and 2025
Market size: $901.8 million and $2.8 billion, respectively
Sources: “Cannabis Beverages Market Size, Share & Trends Analysis Report by Type (Alcoholic, Non-Alcoholic), by Component (Cannabidiol (CBD), Tetrahydrocannabinol (THC)), and Segment Forecasts, 2019 – 2025,” Grand View Research Report Summary, January 2020 available online here; “Cannabis Beverages Market Size Worth $2.8 Billion by 2025 | CAGR: 17.8%: Grand View Research, Inc.” CISION PRNewswire, January 14, 2020 available online here; “Yahoo News/Marist Poll: Weed & The American Family,” Marist Poll Press Release, April 17, 2017 available online here.
Image source: Kimzy Nanney, “Marijuana Herbal Tea,” Unsplash, February 28, 2019 available online here.