Beverages

Cannabis Beverages Are Bubbling Up in Legal Markets

September 11, 2018

Executive Summary

Cannabis beverages are quickly becoming one of the most interesting niche categories in cannabis. This report covers the ins and outs of this category, looking at overall growth over time, seasonal trends, price movement, consumer flavor preferences, and the the category’s sub-segments. It offers insight to anyone interested in how consumers are using Beverages, as well as anyone interested in producing and selling them.

Introduction

When cannabis was first legalized, few people thought they’d eventually be reaching for cannabis-infused bubbly water. Now, stoney soda water isn’t just a reality, it’s being produced and marketed by none other than Lagunitas Brewing Co., one of the biggest names in craft brewing. Obviously, cannabis beverages are entering the mainstream.

But before Lagunitas entered the market, there were plenty of producers in legal states tinkering with drinkable pot, like Washington’s Mirth Provisions or Colorado’s Dixie Elixirs. While beverages aren’t a massive share of the market, they are a category that displays consistent growth. 

The market share of edibles grew about 0.5%, give or take, in each state, between 2017 and 2018. No state’s Beverages market commands more than 2% of the overall market share, but that will likely change by next year. The general trend among consumers is shifting away from Flower and traditional, combustion-based methods of consumption to more niche products. Vape Pens, Capsules, and Beverages all benefit from that.

Within the Beverages category, we see some clear consumer preferences emerging. Certain beverages do better in certain seasons—hot chocolate isn’t exactly a summertime classic—and consumers in different states gravitate towards different flavors. Whether those state to state differences will remain as the cannabis industry becomes a nationwide one is an interesting question, but they’re there for now. We also see significant differences in what sub-segments are popular in each state, likely influenced by which brands have become entrenched there.

Beyond that, there are some noteworthy generational and gender differences in Beverages, and a few interesting notes about prices. While most prices are stable across the states, we see spikes in certain segments in certain states. Again, likely due to which brands have a hold on the market.

Overall, the category has a lot of insight to offer. Trends in flavor should be interesting not just to people looking to make the Coca-Cola of cannabis, but anyone who makes an edible cannabis product. While consumer preference for fruit punch flavors might not translate to, say, brownies, it’s definitely useful to have a broad understanding of the prevalence of citrus flavorings. Data for Beverages also highlight just how pronounced seasonal trends can be, another phenomenon that affects the entire cannabis market. Needless to say, information in this study should be of interest to alcoholic beverage and soft drink manufacturers outside the cannabis industry. We hope you’ll leave with a better understanding of not only how consumers approach Beverages, but how they approach the cannabis market as a whole.

Methodology

Data for this report comes from real-time sales reporting by participating Colorado, Nevada, and Washington State cannabis retailers via their point-of-sale systems, which are linked up with Headset’s business analytics software. This report is based on data collected from retailers on in 2017 and 2018. That data is cross-referenced with our catalog of over 310,000 products to provide detailed information on market trends. 

Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.

Beverages Are Burgeoning

Across all three states in this report—Washington, Colorado, and Nevada—the total market share for beverages grew by at least 0.5%. In Nevada and Washington, it was .6%. This might sound like peanuts, but Beverages make up between 1-2% of the overall market in each state, so a full half percentage gain is a big deal. This is consistent with a steady, gradual shift away from flower as the primary focus of the cannabis industry. Specialty categories like Beverages aren’t becoming ubiquitous by any means, but they are gaining ground. They enjoy their greatest popularity in Washington, where they make up 1.9% of the market, as compared to 1.4% and 1.2% in Colorado and Nevada, respectively.


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Team Headset

With extensive experience within the cannabis industry, Headset is comprised of a team of industry experts, data scientists and market analysts combining our abilities in technology, design and data to help push the cannabis industry forward.