Fresh Competition Brewing in Cannabis Beverages

Cannabis beverages have been on the receiving end of a fair bit of press during the past year. In August, beverage conglomerate Constellation Brands dropped $4 billion for 38 percent of Canopy Growth, a big Canadian cannabis cultivator. Even Coca-Cola is reportedly getting in on the ganja gulping game, although for now they are considering just CBD, rather than THC, for drinks.

When we examine adult-use states where year-over-year comparisons are useful — for example, Colorado and Oregon, but not California, which last year was a medical state — growth is solid, at 37 percent. And while we can’t examine year-over-year trends in California, we can see how the beverage market has unfolded during 2018, spiking from $980,000 in January to $1.34 million in October, a rise of 37 percent. Either way, in all states with robust adult-use data consumers have different drinks of choice. This is a market with significant variation between states, in terms of consumer preferences.

Californians in October sipped quite a bit of cannabis tea.

Steeping Their Weed in California

Like all other states, Californians prefer the category “drinks” to all other beverage options. Drinks includes bottled beverages like soda, juice and kombucha. Through October of this year, drinks captured 62 percent of $14.5 million in beverage sales. But another option is rising fast — tea. Market share for tea rose from 25 percent in January to 45 percent in October. Meanwhile, drinks slipped from 63 percent in January to 46 percent in September. The dramatic trend line — drinks and tea are effectively tied in October — suggests continued erosion of drinks market share, and tea capturing more of the market.

Coloradans in October poured poured a lot of powdered cannabis into drinks.

Mixing It Up in Colorado

Consumers in the first state to OK sales of recreational marijuana spent $15.25 million on drinks through October of this year, marking 23 percent growth compared to the same period last year. Just as in California, drinks rule, capturing 62 percent of beverage sales. But drinks, which dominated sales since January of 2014, now have a serious contender — powdered mixes. These water-soluble powders, which can be poured into any liquid, captured 31 percent of the market through October. And market share is expanding, from 23 percent in January to 36 percent in October. Powdered mixes’ rise comes at the expense of drinks, which saw market share shrink from 67 percent in January to 60 percent in September.

Oregonians in increasingly like to take shots of their weed. In October, sales nearly tied drinks.

Giving a New Oregon Category a Shot

Beverage sales growth in Oregon is downright intoxicating, at 172 percent through October of this year, on sales of $3.7 million. As in the other states, drinks win — but the race is tight in the Beaver State. Through October of this year, drinks captured 57 percent, but that market share has dwindled. In January, drinks held 73 percent of all beverage sales. In October, that number fell to 48 percent. Big drop! What category sipped on drinks’ market share? Shots. They were less than 1 percent of the beverage market in January, but in October shots captured 46 percent — nearly tied with drinks. The shot category gulped significant market share from drinks, but coffee beverages also saw market share leak away, down from 16 percent in January to 6 percent in October.