A Bulls Case For Cannabis Beverages
Looking past the limitations of analyzing the current percentage of consumers purchasing cannabis beverages
There is one number that I’ve had on my mind of late: 78.5%.
That’s the percentage of Canadians over the age of 15 who were estimated to have consumed alcohol in the past 12 months. This same figure for the percentage of Canadians who were estimated to have consumed cannabis was just 15%.
Why is there such an enormous difference between these two?
There’s a number of factors that are contributing to this statistic such as the shortage of cannabis retail stores that are currently open here in Canada as well as the stigma that still exists surrounding the consumption of cannabis.
If ever we are to reach a point globally whereby a similar percentage of the population is consuming cannabis products then I personally think that we need to perfect cannabis in a form factor outside of dried flower.
In my mind, the most likely candidate is a cannabis beverage.
The thought process behind this thinking is simple - if my parents were to start consuming cannabis tomorrow what would their preferred method of consumption be?
Personally, I think it’s an obvious answer as the likelihood of my parents smoking cannabis is on par with my chances of winning the lottery (I don’t even purchase lottery tickets).
As a form factor, cannabis beverages are easily transportable, with a good shelf life, and could easily be served in bars and restaurants once the regulations permit it.
(📸 / Sevenfifty)
Here in Canada, a limited number of companies are focused on producing cannabis beverages. Still, in my estimation, Truss beverages seem to be in the lead, with cannabis giant Canopy Growth in 2nd place.
While the branding of both products is very strong, Truss has produced a line of cannabis beverages with a more desirable flavor profile based on the feedback I have received from cannabis consumers.
It’s worth noting that Truss beverages products are very simple, yet they are highly innovative within this new category. VeryWell is a dropper you simply add to your drink. House of Terpenes uses actual terpenes.
These product features may seem simple, however, sometimes simplicity is the ultimate sophistication.
(📸 / Truss Beverages)
In the U.S, Cann seems to be building a very strong brand with its microdose product line that appeals to a category of consumers who I suspect, if not for these new microdose cannabis products, probably wouldn’t consume cannabis at all.
As such, I can foresee products that have similar characteristics to Cann becoming much more mainstream in the coming years as the gap between the number of consumers who are choosing to only consume alcohol over cannabis is closing.
The strongest cannabis products are not always the best cannabis products.
(📸 / LA Guestlist)
Companies like Truss and Cann are what I would consider the front runners in this new category. Both have the potential to expand the reach of the cannabis industry by a considerable amount.
If both companies can continue to improve their formulations by dialing them in based on consumers’ preferences, this category has the potential to go from having less than 3% of all sales (as is the case here in Canada) to reaching over 30% of all sales.
Cannabis Content For Cannabis Professionals
What’s standing in the way?
The biggest barrier to cannabis beverages becoming mainstream is the regulations that are currently constraining this new form factor.
The pivotal moment for this form factor of cannabis will come when cannabis beverages as permitted to be sold at bars and restaurants.
Given that most people still avoid shopping at cannabis retail stores today, many consumers aren't even aware of cannabis beverages - let alone are they aware of the benefits of consuming one.
With the largest investors in the cannabis industry in recent times being large alcoholic beverage companies, I can certainly see the regulations that are currently constraining this new form factor of cannabis being resolved in the coming years.
If you can't beat them, join them.
What happens after this?
If cannabis beverages continue to improve in both quality, price, and availability I can see the sum of these three factors providing this new category of cannabis with somewhere between 25-35% overall market share within the next decade.
For this to happen dried cannabis flower does not have to become less popular, rather cannabis beverages will have to succeed in expanding the existing market.
With these changes, we may even see a day in the not so distant future whereby a cannabis store only carries beverages.
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