Report: Cannabis acquisitions will increase

16th October, 2018 by Amy Hopkins

The burgeoning cannabis-based food and drinks sector is “on track” to achieve sales of more than US$4 billion in North America by 2022, according to a new report.

The report predicts that “the pace of intra-industry mergers and outside acquisitions will increase”

However, ‘The Tasty Future of Cannabis Edibles’ report by Arcview Market Research in partnership with BDS Analytics says that the predicted sales figure “could prove a fraction of the sector’s potential now that major consumer packaged goods companies are entering the industry”.

A number of spirits firms have made a bid to capitalise on growing legalisation of cannabis in recent months.

In October last year, US drinks firm Constellation Brands acquired a minority stake in Canopy Growth Corporation for US$191 million, announcing its intention to create cannabis-infused drinks. The group upped its investment by US$4 billion in August. Reports have also suggested Diageo is exploring a cannabis partnership in Canada.

North American drinks firms Southern Glazer’s and Breakthru Beverage have teamed up with Canadian cannabis producers.

“Established big-brand food and beverage companies are beginning to take notice of the cannabis edibles market and this is likely just the tip of the iceberg,” said Troy Dayton, CEO of Arcview Market Research.

“As the edibles business grows and regulatory fears ease, the pace of intra-industry mergers and outside acquisitions will increase as well.”

According to the new report, spending on cannabis-infused food and drink reached an estimated US$1bn last year in the US and Canada. By the end of 2018, sales are projected to reach US$1.5bn in the two markets.

“Consumers in front-running adult-use markets within the United States have significantly shifted their spending over recent years to other categories of cannabis consumables, especially into concentrates and edibles,” said Tom Adams, editor-in-chief at Arcview Market Research and principal analyst at BDS Analytics.

“The edibles market’s growth provides an early opportunity for investment in a cannabis sub-sector that is quickly growing, brand-focused, and full of opportunity for new and innovative products.”

In July next year, Beverage Trade Network will host the Cannabis Drinks Expo in San Francisco to assess the “challenges and potential opportunities” the growing industry presents to drinks.

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