Cannabinoid beverages are a hot topic, drawing considerable attention from both existing legal cannabis players and participants in the broader consumer packaged goods markets. Total spending on legal cannabis in the United States is set to more than double to $34.5 billion by 2025—and the edibles product category, including beverages, is outpacing that rise considerably. In Canada, where edibles just made their debut late last year, the category is growing much faster than the overall market, which is forecast to reach $6.1 billion in 2025.
Cannabis edibles are a key driver of legal cannabis sales, accounting for 15% of total spending at present. That share is forecast to increase over time: By 2025, sales of edibles are expected to grow to 2.4 times 2020 sales volume versus 2.1 times growth in the total legal cannabis market—where sales are forecast to expand from $16.2 billion in 2020 to $34.5 billion in 2025.
Cannabis vapes had been the fastest growing product category in legal markets until late 2019, with total monthly sales across Arizona, California, Colorado, Nevada and Oregon growing from $64 million in January 2018 to almost $160 million by August 2019.
With launch of Retail Sales Tracking, BDSA Provides Comprehensive Suite of Market and Consumer Insights on the Canadian Cannabis Market
BDSA has launched retail sales tracking data for Canada, providing brands and retailers with greater insight into the world’s largest nationally legal cannabis market.
BDSA forecasts Canada’s cannabis industry will reach CAD$3.3 billion ($2.5 billion) in spending in 2020 and grow to CAD$8.1 billion in 2025, rising at a compound annual growth rate of 20%. Canada’s market is divided into the medical and adult-use channels, with the latter commencing sales in October 2018. Consumer spending in the adult-use channel has grown rapidly since launch and is expected to account for nearly 84% of Canada’s total legal cannabis market in 2020.
43% of alcohol consumers also consume cannabis
An interesting interaction is evolving between beverage alcohol and cannabinoid products that is becoming an increasingly important issue for both alcohol and cannabis brands and retailers to watch as worldwide cannabis consumption grows. Growing acceptance and consumption of cannabis, consumption of both alcohol and cannabis and cannabis product innovation are three factors influencing beverage alcohol consumption.
Infused gummies make up 84% of candy ingestible sales in 2020
While sales of ingestible cannabis have grown steadily in legal markets, candies have seen particularly strong sales, with infused gummies making up 84% of candy ingestible sales so far in 2020 across Arizona, California, Colorado, Nevada and Oregon. Overall gummy sales in these 5 states have seen strong growth in recent years, from $20 million in July 2017 to almost $64 million in July 2020, a growth rate that far exceeds that of other candy ingestibles. The familiar form factor and multitude of flavors that gummy products present make them especially appealing to consumers, who report that the product type is their favorite type of ingestible cannabis.
Six Cannabis Legalization Measures Make the November Ballot
Pre-COVID-19, it appeared as though citizens in as many as 12 states would have the opportunity to vote on medical or adult-use cannabis on Nov. 3, 2020. Had that come to pass, the 2020 election could have eclipsed the monumental events of Nov. 8, 2016, when eight states passed cannabis initiatives. But COVID-19 put a damper on the legalization push in the U.S., as many ballot measures lost steam due to the inability to gather signatures in person. Campaigns for legalization persisted though shelter-in-place orders stopped many signature drives, and with an October 2019 Gallup poll showing 66% support for full legalization, those campaigns that make it to the ballot seem likely to pass.
Canada’s legal cannabis market has soared since the introduction of adult-use sales on Oct. 17, 2018. In 2019, sales of adult-use cannabis neared $1.2 billion while medical continued to grow nationally, though signs of a coming contraction in that channel became apparent as the year ended.
Even so, the market is growing more slowly than the forecast in “The State of Legal Cannabis Markets, 8th Edition” published earlier in 2020 by Arcview Market Research and BDSA. In accordance with this slower than anticipated growth, the forecast for 2020 adult-use spending has been adjusted down to $2.1 billion from the previous forecast of $2.4 billion, while medical spending in 2020 has been adjusted down to $402 million from $470 million.
The cannabis industry is faring remarkably well, despite – or, likely, because of – the global COVID-19 pandemic, according to BDSA’s analysis of retail sales tracking data year-to-date 2020.
Nearly every jurisdiction in the United States and Canada declared cannabis an essential service and most cannabis retailers remained open during the pandemic, and consumers have continued shopping, though their behaviors have changed somewhat during the crisis.