California’s Cannabis Drinks Grow Amid Wider Industry Slowdown
August 6, 2024The California cannabis drinks markets continues to expand, seeing year-over-year growth throughout 2024 according to data from Headset, despite challenging conditions in other sectors of the Golden State’s adult-use market. For the first half of 2024, cannabis drinks grew by an average of 8.8% per month, with February seeing the largest jump of 14.2%. The data covers the dispensary channel but not the hemp THC segment.
The growth contrasts with the wider California cannabis market, which has seen bulwark categories like flower, edibles, and vape pens all decline in 2024. According to Headset’s data, cannabis beverages are the only category within the legal market to show gains in three or more months in 2024 so far. The other categories to show any growth—pre-rolls, topicals, and vape pens—failed to reach 4% or more growth in any of the first six months of the year, eking out smaller increases.
The cannabis drinks sector in California, sold legally through the state’s dispensaries, leans towards higher-dose products, with all of the top 10 cannabis drinks coming in at 100-mg. doses. The category leader is the cannabis offshoot of malt-liquor brand St. Ides, with six of the top 10 labels coming from the brewer’s alcohol-free THC releases. The top four are all cannabis infused teas from St. Ides, in flavors like Raspberry, Peach, Mango, and Fruit Punch, packaged in 12-ounce cans. St. Ides is also seeing growth with its 100-mg. THC shots. The most popular four-ounce shots are in Strawberry Lemonade and Blue Razz flavors.
Boston Beer Company-backed Uncle Arnie’s is the second-largest drinks brand in the state, notching three of the top 10 products. Like St. Ides’s offerings, Uncle Arnie’s most popular drinks come in 100-mg. doses in both shot and more typical drink forms. The brand’s leading product in California is Pineapple Punch, coming in an 8-ounce portion. Uncle Arnie’s other leading products are Iced Tea Lemonade (also 100-mg. per 8-ounces) and Strawberry Kiwi Shot at 100-mg. per 2-ounces. The final top-10 drink in California’s is Not Your Father’s Root Beer’s namesake release in 100-mg. dosage. According to Headset’s data, both St. Ides and Uncle Arnie’s had sales of over $1 million in June.
While the above brands skew towards high-dosage products, likely due to their restriction to the dispensary market, other brands, like Mary Jones, are operating in the lower-dose space. Mary Jones, which markets both traditional THC and hemp-derived THC drinks, is aiming to bring in consumers outside the traditional dispensary market, placing its hemp-derived beverages in Total Wine. The future of that retail push is uncertain, however, as the state issued a consumer warning against the products in late May as the regulatory framework for hemp THC offerings continues to evolve.—Shane English
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