Cannabis Beverages Post Impressive Beginnings by Brandan Chesebro and Kelly Nielsen Although BDSA’s trending Consumer Insights shows greater penetration for cannabis beverages in the US compared to Canada, cannabinoid-infused beverages are already making waves in Canada’s edibles market. The innovation and initiative of the initial round of Canadian beverage brands in 2020 has created a breakout year for cannabinoid-infused beverage sales across provinces. While edibles were delayed until Cannabis 2.0, consumers have already developed a taste for edible products (yes, BDSA categorizes beverages under edibles). BDSA identifies approximately 30% of Canadian consumers preferring edible products mid-way through 2020. This is up significantly from preference seen pre-Cannabis 2.0. Canadian consumer preference for edibles is approaching levels seen among consumers in fully legal (and more mature with full product assortment) adult-use markets in the US. Carbonated drinks are really dominating the space, likely on account of availability. This segment is a key focus for many organizations, especially those that are supported by larger beverage manufacturers. development. As of October 2020, the Canadian market had far fewer beverage products than most US markets, with about 35 beverage products in Alberta and British Columbia compared to over 240 beverage products in California alone. However, cannabinoid-infused beverages in Canada have seen some of the fastest growth of any edibles category in 2020, as seen in BDSA’s product-level retail sales tracking data. In Alberta and British Columbia alone, beverages grew from 3% of monthly edible sales in January 2020 to 23% of monthly edible sales by the end of October. Some of the fastest growth was seen from July to September, when beverage sales were seeing 20-30% month-over-month sales increases. Not surprising, availability of the products in stores is a major driver, as this spike in sales closely followed big beverage brands hitting store shelves in June and July. This impressive first year of beverage sales in Canada definitely looks different than what has transpired in the fully adult-use legal US markets. As a comparison point, in the most successful cannabinoid-infused beverage market in the US today, BDSA tracks beverages at only 7% of total edible sales. The US beverage market has followed an interesting path over the past seven years, overcoming questionable consumer/product fit, confusing dosing mechanisms, some not so great tasting products, only high THC products available, and more. Reasons for Purchase To date, there are quite a few unique market dynamics for cannabinoid-infused beverages in Canada—a similar timeline for all edibles entering the market and arguably more thoughtful product formats, flavour, and branding than what was seen in the early days in the US. Another fact we cannot ignore, which has been discussed many times by BDSA, is the familiar form factor that draws in consumers who might be less knowledgeable about cannabis. Consumers are used to seeking functional benefits from beverages (relax, calm, energize, sleep, etc.), and cannabinoids fit right into these occasions. Canadian cannabis consumers are already claiming to seek the benefits of relaxation, peacefulness, fun, sleep, and pain management from cannabinoid-Fast Growth Keep in mind that the Canadian edibles market is still in its early stages of 28 CANNABIS RETAILER
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