When Cannabis 2.0 products were launched, LPs and retailers had high hopes for cannabis-infused beverages. Estimates were, and still are, that they could eventually control around 20% to 30% of the market, however, demand—and inventory—aren’t quite there yet.
Research from Mintel says that around 32% of Canadians are interested in trying cannabis, but they have some concerns, mostly about smell, smoke, and health issues. Because of this, most said that they were most interested in trying a non-smoke form of cannabis, with 66% saying they wanted to try ingestibles.
Experts are saying that beverages could be the entry point for canna-curious consumers.
For consumers to try the products, though, they have to be on the shelves. Cannabis 2.0 products became legal in December 2019, but have been rolling out much slower than expected. According to LPs, this comes from supply chain and research and development issues.
Many beverage products are carbonated and being sold in aluminum cans, however, it’s widely known in the industry that carbonated drinks can corrode the aluminum, so there is a thin polymer lining protecting the inside. Unfortunately, this lining absorbs the THC and CBD infused oils, decreasing the potency of the product by as much as 70% a mere five days after being canned.
Thanks to some creative tinkering from scientists in the California cannabis industry, beverages now only lose 5-10% potency after around four months.
Even with that issue taken care of, some manufacturers are experiencing major delays.
What’s on the Market?
As the months tick by post-Cannabis 2.0, companies are beginning to innovate, and they’ve moved onto different drinkable products. These products include formulations of CBD only, THC only, or both.
Most recognizable are carbonated beverages. Usually soda or sparkling water, they come in fruity flavours like blackberry and citrus in 222 ml to 355 ml cans. Products on the market right now generally contain 2 mg to 2.5 mg of THC and up to 20 mg of CBD in some formulations.
Another popular category is tea. Most teas have similar THC content to other cannabis beverages, however, some go as high as 5 mg. The active ingredients are usually paired with other soothing botanicals like lavender and chamomile to promote relaxation or green tea to promote focus. As you might expect, these products are marketed to tea drinkers with phrases that promote wellness and peace.
Possibly the most interesting innovations to come out of Cannabis 2.0 are the drink additives. These products are meant to be added to a mix to make any drink cannabis-infused. At the moment, these are most commonly in the form of powders or distilled cannabis, which is similar in format to hard liquor. Like most ingestibles, these powders are usually 2.5 mg to 5 mg of THC, with some as high as 10 mg, and usually combined with CBD.
The Future of Beverages
In a recently released note, John Zamparo, cannabis analyst at CIBC Capital Markets, seemed optimistic about cannabis-infused beverages, saying that they could be pivotal in gaining new consumers and building profits for cannabis companies, however, they need more distribution points. He suggested liquor stores, or even at bars or restaurants.
As it sits right now, beverages only make up about 5% of sales, and we’re still waiting for beer formulations to hit the market. Are wider distribution and consumption sites the answer to boosting sales, as Zamparo suggests? Some studies suggest that consumers don’t feel knowledgeable enough to try new products. Cannabis 2.0 products have only just hit the shelves, so time will tell how the industry can unlock the beverage niche’s potential.