Cannabis Beverage Category Growing Fast
While cannabis beverages make up only 1-3% of overall cannabis sales across all markets, they are a growing category, increasing nearly 40% in Canada since 2021, according to Headset’s recent report “Cannabis Beverages: Examining category performance & trends.”
Beverages are Canada’s seventh most popular product category, making up 2.1% of sales from January to October 2022. Headset’s report compares beverage sales across several American states as well as British Columbia, Alberta, Saskatchewan, and Ontario in Canada.
Ontario Is Redefining “Cracking a Cold One”
Beverage sales numbers are higher in Ontario (2.4%), followed by BC (1.9%), Alberta (1.5%), and Saskatchewan (1.4%). Year-over-year sales growth in the beverage category soared in Ontario (67%), but was significantly slower in Saskatchewan (28%), BC (21%), and Alberta (14%).
The report notes that both Canadian and American markets grew by nearly 40% since 2021, with Canada’s growth being more rapid due to the relatively recent introduction of Cannabis 2.0 products. By breaking down sales by season between 2021 and October 2022, Headset saw a seasonal spike in beverage purchases in the summer months, dipping back down as the weather got colder.
Brands Grow, Then Slow
With the introduction of Cannabis 2.0, the brand count for cannabis beverages in Canada spiked 300%. In October 2021, the brand count for beverages was up 141%, compared to 39% in October 2022, showing a slowing down in emerging beverage brands.
Something Cold and Fizzy
Regarding what kinds of cannabis beverages Canada’s consumers are reaching for, carbonated beverages top the charts, with 53.2% of sales going to fizzy drinks. These are followed by iced tea, lemonade, and fruit drinks (20.4%), then water (18.9%), with sports and energy drinks at the bottom of the product category (1.6%). 66.9% of beverage purchases in Canada are of the 10mg package size.
Drops in Average Item Price and Equivalized Price (EQ)
Just as flower has been dropping in price over the year, the average item price for cannabis beverages has fallen, albeit slightly, from $6.98 in January 2021 to $6.77 as of October 2022 after a series of rises and drops since they were introduced to Canadian markets. Between October 2021 and October 2022, the average equivalized price (price per milligram of THC) showed a more significant drop of 27% across the nation.
A Shift in “Drinking” Culture?
Precisely who is drinking cannabis beverages? 80% of cannabis beverage purchases are made by Millennial and Generation X males and females between the ages of 26 and 57. Generation X and Y females are the largest demographic of cannabis beverage consumers. Conversely, Generation Z and Baby Boomers aren’t opting for infused drinks compared to their middle-aged counterparts.
Headset’s analysis predicts that there is a lot of opportunity in cannabis beverages, especially since people are looking for alternatives to alcohol. Cannabis beverages also provide a different way to try cannabis other than inhalation. Due to the seasonal spikes of cannabis beverage sales in Canada, the data suggests that this product category “may be redefining what it means to crack a cold one.”