“You have to look at beverages as the most likely breakout product category going forward,” says Tom Adams, principal analyst of BDS Analytics’ industry intelligence branch, about what investors and industry players should expect next from the cannabis market.
In the past year, big-name alcohol brands and even soft-drink producers have made headlines with their interest — and investment — in marijuana-infused drinks. The options are varied. Think everything from an IPA-inspired, non-alcoholic cannabis beer to CBD-infused “wellness beverages.” As for the payoff, investment bank, Canaccord Genuity, predicts the industry could be worth $600 million USD by 2022.
Is there consumer demand though?
For more mainstream audiences, smoking could be an intimidating or unappealing way to embrace recently-legalized cannabis. But, for consumers already used to enjoying alcoholic drinks, a cannabis beverage might be an easier way to enjoy the substance. And, having a social alternative to wine, beer, and spirits could be an attractive new leisure-time activity.
One thing to consider, says Jessica Lucas, vice president of BDS Analytics’ consumer insights division, is that many consumers haven’t even considered replacing alcohol with cannabis. Rather, she told attendees at the recent Arcview Investor Forum in Las Vegas, consumers view alcohol and cannabis as being options for different settings.
Cannabis beverages may thus be a missing link — even the key to increasing market interest in cannabis for adults who don’t smoke or don’t want to only smoke.
But, there are some kinks to work out. The idea is not as simple as say, brewing non-alcoholic beer and then adding cannabis, according to Adams.
“An issue which actually has to be solved with beverages — if they're really going to take off — is the fast onset and rapid wear-off,” he says. “People don't want to sit down to have an alternative to a beer, and not feel it for an hour. They also want it to go away in two or three hours so they can either have another one, or wrap it up for the night and go to bed.”
Michael Hayford, CEO and founder of Lighthouse Strategies, a cannabis portfolio management company that owns Two Roots Brewing, may have a solution.
“It’s micro-infused, fast-acting, rapid dissipation, designed to be a sessionable beverage,” he said between Arcview events. “I can drink two, three, or four.” Herb magazine just named Two Roots one of the best cannabis beers in the world.
Hayford believes there are two types of cannabis beverages. One to be imbibed for effect — say, a high-potency shot of active cannabinoids — and another to enjoy for “the pleasure of consumption, socializing,” he says, echoing Adams. They both believe most consumers will prefer to have a number of beverages over a certain span of time, just like alcoholic drinks.
These are “two completely different markets,” Hayford adds.
Adams believes sessionable consumption is the future of mainstream cannabis. “There are technical problems to be solved,” he concedes. “But if they can be solved… the cannabis industry shows enormous potential.”
Cheers to that.
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