Beverages are barely a blip in legal cannabis markets today.
Data from jurisdictions in the United States where infused drinks are already legally available shows they make up about one per cent of sales, essentially a rounding error. BevCanna, which started trading publicly on the Canadian Securities Exchange earlier this month, is one of several companies attempting to dramatically alter that sales mix.
The company expects to receive its cannabis processing licence from Health Canada before the end of 2019 and have its first infused beverages on Canadian store shelves by early 2020.
The British Columbia-based beverage company commissioned an online survey earlier this year of 2,000 people – half of them in Canada and the other half divided between California and New York State – in hopes of learning what might motivate existing cannabis consumers to start buying infused drinks.
While the sample size is small and surveys conducted via the internet are far from the most reliable, the results nonetheless yield some interesting insights into existing consumption preferences and potential buying intentions among the cannabis community.
Combusting and inhaling dried plant matter remains by far the most popular method of cannabis ingestion across all three jurisdictions, the results showed.
- Cannabis-infused foods were also among the top choices despite California being the only one of the three areas surveyed where edibles are legally available.
- Beverages, however, can be found towards the bottom of all three lists of preferences.
Emma Andrews, BevCanna’s chief commercial officer, said the reason beverages were so low on the list was a result of “distribution and availability.”
“In Canada obviously they are not legally available yet and that is a big barrier to people consuming [beverages] and in the United States there is the challenge of manufacturing because it has to be done on a state-by-state basis and that makes it harder for someone to get into the game so it is mostly smaller entities,” Ms. Andrews said.
Frequency of consumption
The challenge facing cannabis-infused beverage makers could not be more bluntly displayed. Even among existing cannabis consumers, more than half of respondents in all three jurisdictions have never once tried an infused drink.
- In California, the only jurisdiction among the three canvassed where those products are widely (and legally) available, less than one third of cannabis-consuming respondents said they drink more than one or two cannabis-infused drinks over the course of a year.
- And in Canada, nearly three out of every four cannabis-consuming respondents have not once, ever, ingested the drug in a drinkable format.
That result “doesn’t surprise me at all,” Ms. Andrews said. “The technology has not existed until recently to create water-soluble beverages, so previously if anyone was going to tinker around and create a beverage it was going to be what is called a crude extract and it wouldn’t dissolve into water. You would have a really bad experience because it wouldn’t be homogenous, so that is why there hasn’t been a lot of opportunity for consumers to try those products to date, but now that we are in a legal economy, companies have been able to develop and commercialize the appropriate technology to make a water-soluble beverage. That is where Health Canada has really positioned the regulations, meaning every single sip has the exact same potency so the consumer has a really predictable and reliable experience.”
Intent to consume
Given the growing level of attention and excitement around products containing cannabidiol (CBD), the non-intoxicating cannabinoid found in the cannabis plant alongside its more inebriating cousin THC, it is perhaps not surprising that CBD-based edibles generated the highest levels of purchasing intention. Why food products appeared more popular than beverages across all three regions surveyed, however, is less clear. “It is probably just because of the convenience factor,” Ms. Andrews said. “If you think about a 500ml beverage compared to a small bite of chocolate or a mint or a lozenge, that discreetness between the two is very different.”
Preferred product format
Most of the cannabis-infused beverages on the market today come in single serving, ready-to-drink containers. The data suggests regardless of whether the beverage contains CBD or THC, that is precisely the form factor consumers in all three jurisdictions prefer.
- These results have major implications for producers such as Organigram, which just last week announced plans to launch dried powder beverage packets containing cannabis.
“Consumers are convenience driven,” Ms. Andrews said, “they want something that is ready to drink versus something that needs to be mixed, even if that latter option might give you more versatility ultimately, but the ready-to-drink is all about convenience.”