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article imagePot-infused beverage market could hit $600 million by 2022

By Karen Graham     Nov 19, 2018 in Business
With recreational cannabis already legal in Canada, and more states in the U.S. opting to legalize the product, the interest in cannabis-infused alcoholic and non-alcoholic drinks is on the rise.
In what is becoming an interesting take on the growing cannabis industry in North America, statistics are showing that the beer industry is being impacted negatively as people switch from an alcoholic beverage to pot. No, this doesn't necessarily mean people are opting to get high instead of drunk, either.
According to the Motley Fool, in states where cannabis is legal for medicinal purposes, beer sales fell on average by 15 percent last year. In countries where pot is legal, alcoholic beverage sales have dropped 20 percent.
In Colorado, where marijuana use has been legal since 2013, sales of marijuana surpassed alcohol sales for what is considered to be the first time in U.S. history. But the Motley Fool also points out that beer sales have been on shaky ground this year.
Sales at Molson-Coors has been down 1.9 percent in the first two quarters of 2018. Other segments of the alcohol industry including wine and spirits and on-premise sales are also being impacted
Beer brewers looking to recoup lost sales
Molson-Coors and other big beverage companies are looking ahead to what is expected to turn into a huge market for cannabis-infused beverages. Canaccord Genuity is forecasting that marijuana-infused beverages could become a $600 million market within four years.
Additionally, cannabis-infused beverage sales are set to overtake the general demand for pot products, capturing 20 percent of the market for marijuana edibles by 2022, according to the analysts. Breaking it down, CBD beverages will become a $260 million market by 2022, and THC-infused beverages a $340 million market.
CBD found in the beverage form. Consumers can get their CBD from drinking Kickback Cold Brew. All 5 ...
CBD found in the beverage form. Consumers can get their CBD from drinking Kickback Cold Brew. All 5 of their flavors are shown here. Photo: June 7, 2018.
Deceptitom (CC BY-SA 4.0)
Most readers will understand that CBD, or cannabidiol, is a non-psychoactive compound in marijuana - usually what is in medicinal marijuana products. THC, or tetrahydrocannabinol, is the compound in marijuana that gives the user a "high."
"While these trends represent a significant opportunity for US cannabis companies, they have not gone unnoticed by large mainstream beverage players looking to inject growth into their product portfolio," Canaccord's Bobby Burleson and Jonathan DeCourcey wrote, according to Business Insider.
Rich Maturo, chief innovation officer at Cannabiz Consumer Group (C2G), says: “Those at risk of losing sales to legalized cannabis can undertake a variety of actions to offset their losses. Consumers use cannabis to satisfy various social, medical and experiential need states. By understanding these needs, those at risk of losing sales to cannabis can try to offset some of the losses by understanding and speaking to a consumer’s needs."
Top beverage companies entering the CBD beverage market
Large beverage companies are already pushing into the emerging cannabis-infused beverage market. And the beverage companies who are expected to provide investors with the largest gains are those companies who get into CBD beverages.
In August, Constellation Brands - the beermaker behind Corona and Modelo - paid $4 billion for a 38 percent share of Canada's Canopy Growth. Heineken, known for its popular California-based brew, Lagunitas, recently developed a hoppy, THC-infused sparkling water.
Molson -Coors has entered a joint venture with Hexo, a publicly-traded marijuana cultivator in Canada. Molson is already researching what beverages it plans to offer and will be able to share more details early next year. "We will be in a ready-to-go position and, you know, one of the first on the playing field as the market opens up," said Molson Coors CEO Mark R. Hunter in a conference call.
Looking at the bigger picture, Market Watch has a list of the top five beverage companies - besides Molson-Coors, Coca-Cola and InBev - who have announced they are entering the CBD beverage market.
One is ChineseInvestors.com (CIIX), considered a premier company that already has a couple of subsidiaries. CIIX has just announced they will launch CBD Hemp Wine, its private brand, hemp-infused, rice wine, through its wholly-owned foreign enterprise CBD Biotechnology Co. Ltd.
"{Moving forward, CBD Biotech plans to explore a variety of hemp products, in addition to its skin-care and alcoholic beverage products. We believe the upcoming launch of CBD Hemp Wine will serve as a strong sales driver for the Company," said Warren Wang, Chief Executive Officer of Chineseinvestors.com, Inc. in a statement.
GW Pharmaceuticals plc is a biopharmaceutical company that is focusing on the development of plant-derived cannabinoid therapeutics through its proven drug discovery and development processes.
Aurora Cannabis is the second largest cannabis company in the world by market capitalization, after Canopy Growth Corporation.
A report in mid-September, by BNN Bloomberg, stated that Coca-Cola was considering the development of cannabis-infused beverages for medical purposes using CBD.
New Age Beverage Corporation debuted its portfolio of cannabis-infused products at the North American Convenience Show recently in Las Vegas. The Colorado-based organic, natural and healthy functional beverage company aims to become the world's leading healthy beverage company.
Their product portfolio includes CBD-infused relaxation tea's, CBD-infused sparkling waters, and CBD-infused shots, each with 25mg of full-spectrum CBD, reports Street Insider.
Michael Cunningham, senior vice president of sales for New Age commented, "The demand and interest for these products is unlike I have ever seen in my career. Customers loved the taste of New Age's CBD-infused products and many of them committed to bringing in the products for sale."
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