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Cannabis Beverage Sales Accelerate In The U.S.

April 6, 2021

Cannabis beverage sales reached more than $15 million in California in January, roughly doubling in size compared to the year-earlier period and illustrating the category’s strong growth over the past several years. While cannabis drinks still make up a small fraction of total cannabis consumption and sales, they are now selling at six times the rate they were just three years ago, according to a recent report from market research firm Headset. Increasing customer awareness and a bevy of new brands are finally fueling growth in the promising segment.

In California, the top seven brands account for approximately $5 million in monthly sales, or one-third of the market. The top seven include Lagunitas Brewing, Kikoko, Keef Cola, Cannabis Quencher, Legal Beverages, Manzanita Naturals, and Cann Social Tonics, according to Headset. The last of those, Cann, has made a big impression in its early days on the market. It began to take off in March of last year and gains have held remarkably steady since, propelling Cann to become the biggest beverage brand in California, doing just under $2 million in monthly sales as of February. Cann recently struck a deal with Green Thumb Industries to expand into new U.S. markets including Illinois. While Keef Cola and Lagunitas’ THC lineup have also thrived in the last year, the increased pressure has clearly taken a bite out of Cannabis Quencher and Kikoko, whose sales have flagged somewhat.

“Between advancements in THC infusion technology, and myriad new brands catering to the occasional, low-dose consumer, there is a lot of reason to believe in the growth potential of this category,” Headset noted in its report.

Zooming out, the report also highlighted some differences in trends among states. In Washington State, for instance, 90% of beverage sales go to products containing 100mg or more of THC, compared to 44% in California. Since 2018, both low-dose and extremely high-dose products have gained share in California, Colorado, Oregon, Nevada, and Washington, squeezing out the middle. In 2018, drinks in the 20-50mg range commanded 17% of the market; so far in 2021 they have accounted for only 5% of sales. Meanwhile, drinks with 5mg or less of THC have grown from 14% to 18% of the market, and 100mg or higher has grown from 47% to 60%. Drinks brands dosed at between 50 and 100mg are scarce.

While the beverage category is clearly making strides, cannabis drinks “are still very much add-on purchases,” Headset notes. Only 23% of drinks sold are sold alone, without the customer picking up additional form factors. More than 34% of drinks sales are accompanied by edibles, 26% by flower, and 24% by pre-rolled joints. Across generations, drinks are far more popular with women than men; female Gen-X consumers are currently the top buyers of cannabis drinks.—Danny Sullivan

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