Move over beer, wine, and spirits; there’s a new class of beverages hitting the market that might finally give alcohol some serious competition. That competition is coming from the rapidly expanding cannabis industry. As cannabis becomes more popular, new ways of consuming our favorite plant keep hitting the market. Not everyone is keen on smoking or vaping, though. That’s why edibles, tinctures, and even pills are taking up more shelf space at your dispensary.
While it’s impossible to know exactly who first decided to infuse their drink with cannabis, the first commercially-produced beverage hit the market in 2010. Colorado-based Keef Brands started with a simple soda drink, then quickly expanded to sparkling water, energy shots, and health drinks. Once recreational cannabis first became legal in Colorado and Washington state, more and more companies began diving in, producing beverages to fit just about anyone’s fancy.
The rest, as they say, is history. Now cannabis-infused beverages are big business and are only expected to grow over the next several years.
Who’s Investing In The Cannabis Beverage Market?
The cannabis infused beverage market is expanding and can be a $600 million market by 2022, according to Canaccord Genuity, a financial service firm that tracks the cannabis industry. This means that the market is thirsty for growth.
This also means that major U.S. corporations are beginning to take notice and want a gulp of the profits. In fact, the largest players in the market right now are companies in the alcohol industry. Molson Coors invested in a Canadian pot producer HEXO. Anheuser-Busch InBev is teaming up with the Canadian company Tilray to invest $50 million each into researching cannabis-infused drinks.
But the award for the biggest investment by an American beverage corporation goes to Constellation Brands, who owns iconic names like Corona and Modelo. Constellation Brands dropped a whopping $4 billion for a 38% stake in Canadian cannabis producer Canopy Growth. Investors quickly showed their approval, pumping up Constellation Brands’s stock by 1.6% shortly after the deal was made.
Non-alcoholic beverage companies are showing an interest in cannabis drinks. While no investments have been made, PepsiCo and Coca-Cola have expressed interest in cannabis-infused beverages. Whatever plans they have are being kept quiet for the time being as the two companies take a wait-and-see approach to federal legalization. Coca-Cola has said that they’re interested in how to use CBD in drinks as a way of entering the wellness beverage market.
As more states continue to legalize both medicinal and recreational cannabis, more and more large beverage corporations will likely want a piece of the market. And once federal legalization becomes a reality, the floodgates of money will pour out of investor’s pockets.
Challenges and Drawbacks
Infusing a drink with cannabis comes with its own set of challenges. These challenges are preventing the beverage market from reaching its full potential.
The first and biggest challenge is basic chemistry. Cannabinoids like THC and CBD are fat-soluble, meaning they don’t play nice with liquids like water and juice. A good example of what happens when you try to mix cannabis with water is your favorite oil and vinegar salad dressing. The oil separates from the vinegar and will naturally rise to the top. The same thing happens with cannabis-infused drinks.
Beverage companies are trying a variety of possible solutions to this problem. The easiest, most cost-effective solution is letting the cannabis separate from the water and instruct the user to shake vigorously before drinking, which will temporarily mix the two. The next method manufacturers are using is by adding different emulsifiers to the beverage that basically makes the cannabinoids water-soluble. But even this solution comes with its own set of problems. Mainly, the effect of the emulsifiers is very short-lived, lasting a few weeks at the very most.
But so what if the cannabinoids don’t completely mix with the water, you may ask. It’s not quite that easy because it creates two main problems. The first problem is that the cannabinoids don’t mix evenly throughout the drink, meaning that the user experience can vary from beverage to beverage, even ones made by the same company. This means that the onset of the experience can be either very fast or very slow and the experience might not be what the user is expecting
The second big challenge is taste. Cannabis has a very distinct smell and taste. For those who smoke flower, the smell and taste can be very pleasant, but this doesn’t translate well to beverages. Most cannabis-infused beverages are described as earthy and grassy. Manufacturers try to address this issue by adding sugar and strong flavoring. While those additives help, they’re not fully solving the problem.
So who is selling cannabis drinks? There are many companies with products already on the market. Here are a few:
Mary Jane Wines: This company currently caters only to the medicinal cannabis market. They sell wines that have been infused with hemp seeds and CBD oil. Their products don’t come cheap, however. Just half a bottle of their wine can set users back up to $400.
Mood33: Specializing in sparkling drinks, Mood33 infuses their drinks with 10% of THC, considered to be a single serving of cannabis. With names like Joy, Passion, Calm, and Peace, each drink also contains various fruits and extracts for flavoring. Each drink will set you back about eight dollars.
Heineken: Beer maker Heineken dove straight into the cannabis beverage market with their Lagunitas Hi-Fi Hops sparkling drink. They’ve didn’t infuse this drink with just THC, they also appealed to IPA fans by using plenty of hops. There are currently two drinks on the market, one with 10% THC and the other with 5% THC and 5% CBD.
The Cannabis-Infused Beverage Market Is One To Watch
Despite the rapid growth of this market, cannabis beverages still have some large hurdles, the biggest being taste. But as new ways of processing cannabis are being discovered, it’s only a matter of time before companies begin to figure out how to make these unique drinks more palatable. And with major corporations pouring money in, research and development will be very well-funded.