For large beverage companies, the push into pot is all about the fear of missing out. After getting beat on trends including craft beer, coconut water, and flavored seltzer, the drink giants don’t want to miss the next trendy ingredient: cannabis. Whether it’s the THC that gets you high or the nonpsychoactive CBD, weed components are being infused into drinks with an eye toward the mass market.
Legal marijuana sales are expected to rise to $11 billion in the U.S. this year, from $9 billion in 2017, and cannabis-infused beverages account for less than 1 percent of that. But a recent report from the bank Canaccord Genuity Group Inc. estimated that sales of drinks infused with THC or CBD, forecast to make up 20 percent of the edibles market, will reach $600 million in sales in the U.S. by 2022. In Colorado, which became the first state to legalize recreational marijuana in 2014, sales of cannabis drinks almost doubled in 2017 and are up an additional 18 percent in the first half of this year, according to Flowhub LLC, which tracks marijuana sales data.
The current pot investment boom got started in August when Constellation Brands Inc., best known as the maker of Modelo Especial beer and Robert Mondavi wine, plowed $3.8 billion into Canopy Growth Corp., an Ontario-based cannabis company. Molson Coors Brewing Co. has invested in the industry, and the liquor giant Diageo Plc is rumored to be interested, which has helped drive the value of at least 10 Canadian companies above $1 billion. Alcohol companies are concerned that young professionals might swap out their usual wine or cocktail for a weed beer or some THC-infused water, an idea known as the “substitution effect.”
Credit: www.bloomberg.com
