CANNABIS BEVERAGE MARKET ANALYSIS

Cannabis Beverage Market Size and Trends

Global cannabis beverage market is estimated to be valued at USD 205.1 Mn in 2024 and is expected to reach USD 849.3 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 22.5% from 2024 to 2031.

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The legalization of cannabis for medical and recreational use across various countries like U.S., Canada, and selective European nations is driving the market growth. Wide acceptability of cannabis infused beverages as a healthier alternative to alcohols can boost its demand. Growing awareness about therapeutic benefits of cannabis in conditions like chronic pains, arthritis and insomnia has been augmenting the sales of cannabis infused drinks.  The market is expected to witness robust growth during the forecast period, owing to rising millennial population, changing consumer preference towards wellness drinks with functional benefits and expanding retail distribution. However, lack of standardization and guidelines related to use of cannabis as ingredients along with complexity in production is anticipated to hinder the market growth.

Growing Social Acceptance of Cannabis

Global cannabis beverage market is witnessing strong growth due to growing social acceptance of cannabis worldwide. Over the past decade, several countries have legalized recreational and medical use of cannabis due to its medicinal properties and growing evidence that it is less harmful than alcohol. The social stigma associated with cannabis consumption has reduced considerably as people have become more aware of its benefits. Even in regions where cannabis is still illegal, its consumption is not seen in negative light like before. Young population in their 20s and 30s have grown up in environment where cannabis is almost seen as normal and there is little moral opposition to using cannabis infused products. This generation now prefers cannabis drinks as a social and healthy way of enjoying cannabis' psychoactive properties. Their greater spending power and adventurous attitude supports the market growth. Furthermore, senior citizens are also finding medical use of cannabis due to conditions like arthritis pain, thus, boosting its demand. With more countries expected to legalize cannabis in the near future, social acceptance is likely to boost further.

The launch of innovative cannabis infused beverages is significantly driving the growth of the global cannabis beverage market. More and more companies are introducing novel beverage products containing non-intoxicating cannabidiol (CBD) or tetrahydrocannabinol (THC) which provides recreational effects. CBD-infused beverages in particular witnessing high demand as they provide therapeutic benefits like reduced anxiety and stress without the "high" feeling.  Currently, the demand for cannabis infused beverages is high among millennials and Generation Z consumers who prefer wellness drinks offering health advantages. Manufacturers are leveraging this opportunity by launching varied beverage types infused with CBD and/or THC extracts, including sparkling waters, cold-brew coffees, relaxation teas and workout recovery formulas. They are also utilizing advanced nanoencapsulation technology that allows quicker absorption of cannabinoids in the body compared to traditional methods. This enhances the functional experience for consumers. Several mainstream beverage giants have entered the market to cash in on the future potential. For instance, The Coca-Cola Company inked deals with Canadian cannabis producer Aurora to develop CBD-based beverages. Similarly, Constellation Brands invested over USD 4 Bn in leading cannabis company Canopy Growth Corporation to create cannabis-infused drinks. Such strategic investments and partnerships between cannabis and beverage leaders will accelerate innovations. It will also help improve accessibility of cannabis products as the market expands globally in the coming years.  As reported by the United Nations Office on Drugs and Crime in 2020, the use of cannabis for medical and recreational purposes is increasing worldwide. The report stated that cannabis plant cultivation has spread to all continents except Antartica in recent times. This changing social attitude coupled with imminent legalization of cannabis in more regions indicates the cannabis beverage industry will have robust long-term growth prospects internationally.