Consider for a moment the three most widely used drugs on earth: caffeine, nicotine, and alcohol. Collectively, they represent a nearly $2.7 trillion global market —$420 billion in the United States alone. Each has been socialized into our collective consciences and even enjoy a sanctioned time for daily use: the coffee break, the smoke break, and happy hour. Two of the three are beverages.
Cannabis has quickly emerged as the fourth leg of this legal-use psychoactive stool. This has tremendous implications for investors and operators alike, as consumer preferences are migrating from artificial and invigorating products to natural and calming. Twenty-five of the top food and beverage companies in the US had an $18 billion loss in market share in just the last five years. Consumers want functional benefits, craft appeal, natural ingredients, experimental flavors, and low caloric counts. These trends, when combined with the health benefits of cannabis, are likely to drive outsized growth in infused beverages in the decade ahead.
1. Cannabis beverages have been around for centuries.
While it may appear that cannabis drinkables are a relatively new idea, cannabis has been used in medicinal beverage preparations throughout history. The Chinese have enjoyed Mafeisan for thousands of years, while Indians have long referred to bhang as the ancient Nectar Of the Gods. Bhang is sold today at government-licensed stores in India, having never been made illegal due to its religious ties as the official drink marking the arrival of spring. As public opinion and the stigma associated with recreational cannabis throughout the world continues to soften, consumers search for social and innovative ways to consume their favorite cannabinoids.
2. Cannabis-beverage science is getting better.
Infused drinkables currently hold a market share of under 1 percent in the US, a figure that is far too low when compared with industry estimates for a $2.8 billion global cannabis beverage market by 2025. Advances in cannabis science is a factor behind this anticipated growth.
Up until recently, crafting cannabis beverages has been challenging. Cannabinoids are oily, fat-soluble substances that do not mix easily in water-based beverages. Oral consumption has thus traditionally been facilitated with oil and butter infusion. That's why gummies, brownies, and confectionaries comprise the majority of infused edibles today. The opposing nature of cannabinoids and water has challenged product developers with taste masking, dosing uniformity, and shelf-life stability. Formulation technologies honed in the pharmaceutical (60 percent of newly marketed pharmaceutical drugs demonstrate poor water solubility) and food industries can help circumvent some of these challenges while bringing infused beverage ‘onset’ closer to the 7 to 10 minutes that alcohol enjoys, instead of the 75 to 120-minute traditional edible average.