Global Cannabis Beverage Market Size & Growth Trends Analysis Report

The cannabis beverage market has grown exponentially over the past few years due to several important variables. There is an increased penetration of cannabis- food & beverages in untapped markets as it is gaining legalization worldwide steadily. There are many factors for changing consumer attitudes towards cannabis-infused drinks, with relaxation being one of them. Consumer habits are changing as the legalization of marijuana has expanded geographically, with more users choosing to consume cannabis through drinks rather than the traditional smoking route. Thus, this trend of growing social acceptance of cannabis is especially evident among health-conscious consumers who are drawn to cannabis-infused beverages because of their supposed health benefits, unlike alcoholic drinks which are easily available and have harmful effects on health.

Among the range of edibles, drinks have become the most practical way to get your hands on tetrahydrocannabinol (THC). In addition, these drinks are becoming increasingly popular because of their supposed health advantages, carefully measured portions, ease of use, and accessibility. The growth in the cannabis beverage industry has been attributed to product development and rising awareness regarding the medical benefits of cannabis. The manufacturers are investing in research and development to provide unique and exciting drink options that cater to a wide range of consumer preferences and tastes. The range of cannabis-infused beverages currently on the market is expanding, and attracting new consumers, thereby, boosting the overall industry.

Leading brands are taking advantage of opportunities to increase their visibility in stores by launching unique, and innovative products. For example, Tilray Brands, Inc., a leading international manufacturer of ready-made cold teas, introduced two new cannabis-infused cold teas under its Solei brand in January 2024: Peach Cranberry, and Wildberry Hibiscus. These cannabis-infused beverages in 355 ml cans have a slightly sweet taste that suits consumers’ changing tastes in the marijuana beverage industry.

Despite its bright future, the cannabis industry is not without its obstacles and limitations. Though there is a rise in awareness about the medical benefits of cannabis, the persistent social stigma associated with marijuana use is a major barrier that can discourage some consumers from testing cannabis-packaged products. Furthermore, manufacturers face a problem in guaranteeing the safety and efficacy of their products due to concerns about variable potency and uniform dosing. More stringent regulations, especially for labeling and packaging requirements, increase the compliance obligations of industry stakeholders and may impede market expansion. The stringent regulations regarding THC content in beverages are another major restraint for the cannabis beverage industry as many countries and their states have put low caps on the amount of THC that can be present in each cannabis drink. This forces the manufacturers to dilute the amount of THC present in each serving which eventually hampers the consumer experience.

The cannabis beverage market also faces significant competition from other forms of marijuana consumption. While beverages provide a discreet and convenient way to consume marijuana, they have to compete with many other products that may have different effects or attract market fragmentations and possibly pricing pressures, which will affect the profitability of businesses in the cannabis beverage industry. While the cannabis beverage industry offers attractive prospects, the ability of the industry to overcome these challenges and effective management will be essential for its long-term development.

Impact of COVID-19

The cannabis beverage industry faced significant challenges in the early stages of the pandemic. Supply chain disruptions and logistics issues made it difficult to obtain cannabis-containing beverages in some areas. These problems presented initial obstacles for industry stakeholders to rethink and enforce strategies that suited the rapidly changing market conditions.

Amid these challenges, however, there has been a clear shift in consumer preference for cannabis-infused beverages. Simpler and more socially acceptable cannabis products were in high demand as people began spending more time at home and looking for new ways to lose weight. Stress and concerns about the pandemic increased interest in marijuana-containing beverages, as some consumers looked to products with potential medical benefits.

Thus, the COVID-19 pandemic did pose challenges for the cannabis beverage industry at first, but it also created changes in consumer behavior and consumption patterns that helped the industry to be resilient and adaptable in the face of adversity.

Segmentation

The global cannabis beverage market has been segmented into product type, component, and sales channel. By product type, the market is further segmented into alcoholic, and non-alcoholic. By component, the market is segmented into THC-infused, and CBD-infused. By sales channel, the market is segmented into online, and offline. Stakeholders must target particular consumer categories and geographical areas with their strategies by using segmentation analysis to understand the dynamics of the cannabis beverage industry, spot development possibilities, and adjust their approaches.

Regional Analysis

The growing consumer demand is anticipated to propel the cannabis beverage market in Europe towards significant growth. Though there are varying levels of regulations in European countries, according to the Cannabis Trades Association, Europe’s trade body for medical cannabis, local businesses are actively developing to meet the growing need for healthy beverages. Germany is the largest market for CBD products including beverages in the region. In addition, the large number of cannabis-friendly restaurants and coffee shops in the Netherlands and nearby countries is expected to increase demand and boost cannabis tourism in Europe, which in turn, has surged the demand for cannabis beverages in the region.

There has been a noticeable increase in the hemp and CBD market in the North American region. With that, the market for beverages infused with cannabis has increased dramatically in recent years due to the growing legalization of marijuana for recreational use across various states in the U.S. and Canada. The product innovation by the major companies in the region to lure the consumer base looking for healthier alternatives for alcohol is another major factor for the growth of the cannabis beverage market in the North American region.

Given their enticing demographic profiles, several Asia Pacific countries are also expected to witness notable expansion in the cannabis beverage market. Australia, Thailand, Japan, and South Korea are the key countries for cannabis beverage growth in the region. With countries like Uruguay, Colombia, and Brazil, exploring the potential of relaxing the regulations for medical use of cannabis, Latin America has a growth area for innovation and export opportunities for the cannabis beverage market. Similarly, countries such as South Africa, and Morocco have paved the way for the growth of cannabis beverages in the African region by decriminalizing the private use of cannabis products including cannabis beverages. The Middle East region is more restricted compared to Africa in terms of supportive regulatory frameworks.

Competitive Analysis

The market for cannabis-infused beverages remains competitive, in part due to uncertainty surrounding cannabis sales and related regulations in recent years as the industry is expected to grow exponentially. The major companies in the global cannabis beverage market are Aurora Cannabis Inc., Aphria Inc., Canopy Growth Corporation, MedReleaf Corp., Cronos Group Inc., GW Pharmaceuticals, plc., Phoena Holdings Inc., CanCore Concepts Inc., VIVO Cannabis Inc., Tilray, and OrganiGram Holdings among others. In 2021, following the completion of their merger, Tilray Inc. and Aphria Inc., Two Canadian cannabis companies, now known as Tilray, became the largest marijuana company in the world by revenue. Later in August 2023, Tilray acquired Truss Beverage Co. from Molson Croos Canada, which in turn, allowed it to expand its market presence.

Using cutting-edge technologies and creating distinctive versions in line with beverage industry trends is expected to be an important strategy for gaining a competitive advantage in the market. In August 2021, Cann, a cannabis beverage startup in the U.S., announced the launch of a caffeinated cannabis beverage with a microdose of THC. Such innovations in the cannabis drinks in terms of taste and after-effects are needed for the growth and exploration of the potential in the market. Cann also acquired Sweet Reason Beverage Corp. in September 2022, to grow the Sweet Reason brand and penetrate new markets for products including those without CBD and with low THC content.

In 2023, MediPharm Labs Corp. and VIVO Cannabis Inc. acquired all of the issued and outstanding common shares of VIVO in an all-equity business combination transaction. Similarly, by obtaining the remaining 90% stock interest in 2024 of MedReleaf Australia, Aurora Cannabis has strengthened its position in the Australian market and increased its footprint in one of the biggest federally regulated medicinal markets.

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The global cannabis beverage market is segmented as follows:

By Product Type (Revenue: USD Billion, 2019 – 2031)
●    Alcoholic
●    Non-Alcoholic

By Component (Revenue: USD Billion, 2019 – 2031)
●    THC-Infused
●    CBD-Infused

By Sales Channel (Revenue: USD Billion, 2019 – 2031)
●    Online
●    Offline

By Region (Revenue: USD Billion, 2019 – 2031)

● North America
o U.S.
o Canada
o Mexico

● Europe
o U.K.
o France
o Germany
o Italy
o Spain
o Rest of Europe

● Asia Pacific
o Australia
o Japan
o Thailand
o South Korea
o Rest of Asia Pacific

● Latin America
o Brazil
o Uruguay
o Rest of Latin America

● Africa
o South Africa
o Rest of Africa