[ad_1]
By Madeline Scanlon
Cannabis drinks are one of the most accessible ways to consume cannabis. There’s no smoke, smells, or uncomfortable coughing. Minnesota is taking a new approach to THC drinks by allowing low-dose varieties in mainstream channels – including where alcohol is sold. Opening up the availability of cannabis drinks could accelerate normalization and create a new business opportunity for the emerging U.S. cannabis market.
The Minnesota Approach to Legal Cannabis
Minnesota made headlines when it legalized ingestible hemp-derived THCs in 5mg doses with 50mg perpack. This allowed hemp companies to develop low-dose drinks, gummies, and other innovative food options. In legalizing cannabis, the state did not destroy this new hemp-derived foods market. Especially with brands opting to offer 5mg delta-9 THC over other forms like delta-8, consumers would have lost significant access to delta-9 products if Minnesota insisted all delta-9 THC be sold through dispensaries.
Good for the industry, Minnesota’s cannabis legalization further expanded access to delta-9 THC by formalizing the sale of low-dose ingestibles, including in liquor stores. Now, for the first time legally, consumers will have access to psychoactive cannabis drinks alongside alcoholic drinks.
Better Channel for Beverages
When customers visit a dispensary, THC drinks are in competition with gummies. Shoppers are faced with a choice that looks something like this: purchase a 4-pack of 5mg THC drinks for $20 or a 10-pack of 10mg THC gummies for $15. Analyzing the economics of purchasing by milligrams, the scales tip in favor of THC gummies.
Products with a higher milligram per dollar are an attractive proposition for customers looking to maximize the value of their cannabis purchases. In 2023, 66% of U.S. cannabis consumers say “price” and/or “value for the money” is a top purchase influence. As such, gummies are the most popular edible cannabis consumers use – 51% have used gummies in the past 6 months compared to just 17% having used cannabis drinks.
However, in a liquor store, shoppers are coming in looking for something to sip on that provides mind-altering effects. Additionally, it is not uncommon for consumers to spend $20 on a pack of craft beverages. This puts THC beverages in a distribution channel where they can thrive alongside products of comparable price points and format and gives cannabis consumers unprecedented access to THC drinks.
Drinks for the Newbies
Cannabis drinks are an excellent entry into the world of cannabis products. Everyone knows how to enjoy a beverage, but smoking is not as common. With THC beverages in mainstream channels, canna-curious individuals have easy access without having to go to the dispensary.
Plus, there’s been a trend of alcohol consumers, especially younger ones, wanting more non-alcoholic options. Brightfield Group’s Q1 2023 study of the general population revealed that 59% of Gen Z and millennial alcohol consumers “want more non-alcoholic alternatives.” And of Gen Z and millennials that tell us they are drinking less alcohol than previously, 32% are using cannabis instead of alcohol. THC drinks within mainstream alcohol channels will create a boom of new consumers introduced to cannabis via beverages rather than inhalables. If more states follow Minnesota’s lead, this could be the start of a significant shift away from inhalable use among the cannabis consumer population. There could be a new wave of cannabis consumption – and also normalization.
Business will Boom for Beverages
With broader acceptance anticipated and more channels to sell in, Minnesota presents a massive business opportunity for ingestibles brands, but especially drinks brands. The variety on shelves is already impressive – from ciders and seltzer to sodas and teas. Popular cannabis drinks brand CANN is also present in the state, and others will likely make their way up north to get in on the action as adult-use legalization rolls out.
The market forecasts already show a bright future for cannabis drinks. Brightfield Group sized the psychoactive hemp-derived cannabinoid market in 2022, estimating the drinks category to achieve $61 million in sales nationwide in 2023. Additional regulatory clarity at the state level and expanded distribution will keep this number growing.
Additionally, cannabis-derived THC drinks are forecast to be worth $348 million in 2023 and have one of the highest growth rates of cannabis product types through 2028. Brands that can operate in both the cannabis- and hemp-derived THC regulatory landscape will find the most success in this booming yet fragmented category.
Overall, the sale of THC beverages beyond the dispensary channel presents a significant revenue opportunity for businesses. States that choose to leave hemp-derived THC products in a gray area or confine them exclusively to dispensaries will likely miss out on this potential revenue stream. With THC beverages within a more comprehensive range of channels, businesses can tap into new markets and reach a broader customer base, ultimately driving higher revenue and increased normalization of cannabis.
[ad_2]
Source link
