You’d think that between America’s love of weed and functional beverages, cannabis-infused drinks would be riding high right now.
So far, that hasn’t proven to be the case.
The budding category has been hyped up for years, predicted to give alcohol companies a run for their money. But while the market is certainly growing — sales are estimated to hit $571m this year and $756m by 2029 at a 33% growth rate — it has yet to take off, per Business Insider.
Why it’s fizzling
For one, regulations. Cannabis-infused drinks started hitting shelves following the 2018 Farm Bill, which legalized hemp (cannabis with 0.3% THC or less) on a federal level — but the legislation is subject to renewal every several years, which leaves the future of the cannabis industry uncertain.
Another issue is how widely state laws vary, regarding if and where the beverages can be sold, and how much THC it can contain.
- Beverage company AMASS Brands Group launched Afterdream, a THC-infused drink, in 2021 but pulled it after nine months given regulatory hurdles.
- In weed-happy states like California and Colorado, their sales have been largely limited or banned, usually to protect the states’ licensed marijuana industries from competition, a Brightfield Group research analyst told BI.
There are also cultural barriers
A social stigma still exists, and one cannabis drink founder told BI that consumer awareness of the product is low.
Another obstacle: People who’ve had bad experiences with edibles or those with little cannabis experience might be hesitant to try them, and marijuana enthusiasts might want something stronger.
Plus, they aren’t always the tastiest refreshments.
Why it could still make a splash
It’s still early days for the industry, and while widespread adoption still presents a challenge, the regulatory landscape has improved in recent years. Plus:
- Functional beverages are trending, and low-dose THC drinks offer a hangover-free alternative to alcohol, which is falling out of favor.
- Bigger retailers like DoorDash and Total Wine have started carrying them.
- In Minnesota, THC sales have boosted liquor store profits.
- Possibly the greatest indicator: alcohol companies are nervous. Some, in anticipation of the competition, are even pushing their own THC-infused offerings.
Drinkmakers like AMASS, which relaunched Afterdream in May, are hopeful the grass will be greener on the other side. But whether they should be might become clearer next month, when that darn Farm Bill is set to expire.
