US cannabis-based drinks to pass $1bn by 2023
Sales of cannabis-based drinks in the US are forecast to break the billion-dollar mark by 2023, according to a new report.
Cannabis-based drinks reached US$86 million in the US in 2018, according to the new 2019 US CBD Drinks Report from food and drinks expert Zenith Global and US industry newsletter Beverage Digest.
Cannabis comprises two main active components: THC, which is the psychoactive part of the plant, and CBD (cannabidiol), which has reported health benefits.
CBD-based drinks have experienced a surge in popularity over the last year, and are expected to exceed US$1.4bn in the US in 2023, according to the report.
Richard Hall, Zenith Global chairman, said: “Key growth drivers for CBD drinks include loosening regulatory implementation, investment by major brewers and innovation by numerous start-ups. This has led to far greater awareness and availability.”
The report also highlighted that CBD drinks could be boosted by the removal of hemp from Schedule 1 of the Controlled Substances Act in December 2018, due to the passing of the Agriculture Improvement Act of 2018.
Last year saw numerous drinks companies move into the cannabis market, as recreational use of the drug was made legal in several US states and Canada.
North America’s largest drinks distributor, Southern Glazer’s Wine & Spirits, was the first to make such a move. The group created a dedicated subsidiary exclusively for the representation of cannabis in Canada, called Great North Distributors, and has already struck a deal with cannabis producer Aphria to distribute its goods nationwide.
In November last year, Casa Noble Tequila maker Constellation Brands finalised its CA$5bn (US$4bn) investment in Canadian cannabis producer Canopy Growth Corporation.
At the start of this year, US trade group the Distilled Spirits Council responded to “misinformation” about the impact of cannabis on alcohol, claiming legalisation has not affected spirits sales.
The Spirits Business explored the relationship between cannabis and spirits in depth last year, questioning whether both categories can survive side by side.