Over the last couple of years, the stance on marijuana in the United States has shifted, which can be observed by the number of states that have decriminalized and/or legalized the medical and recreational use of marijuana. According to BDS Analytics, marijuana sales in the United States are expected to be $16.2 billion this year, with marijuana beverage sales making up $1 billion of that amount.
According to the National Cannabis Industry Association, only three states in the country lack some form of legal marijuana; those states are Nebraska, Kansas and Idaho. During the November 2020 elections, Arizona and New Jersey approved measures for adult recreational use of marijuana, with New York possibly following suit in the months to come.
A New Frontier Data survey found that while prior studies couldn’t agree on whether marijuana legalization affected alcohol sales, wellness and health have progressively become consumer priorities, with 81% of marijuana consumers claiming that marijuana is safer when compared to alcohol. This may explain why many alcohol companies have been making considerable investments in marijuana, particularly in the industry’s beverage space, and hedging their bets.
A good example of this would be Constellation Brands, which made a 10% investment into Canopy Growth, a cannabis company based in Canada, a few years ago. This move was followed by other big companies in the alcohol industry getting involved in marijuana. For instance, Great North Distributors, a Southern Glazer subsidiary, started distributing marijuana brand Aphria in 2018 while earlier this year, a CBD-infused sparkling water known as Truss was launched by Molson Coors. Additionally, Pabst and Lagunitas, which are both owned by Heineken, have launched beverages that are infused with THC.
The marijuana beverage market is made up of two primary categories: hemp-derived CBD beverages and THC beverages. With cannabis beverages being seen as healthier alternatives to alcohol and marijuana gaining benefits from the shift towards wellness and health, especially now that millennials are consuming less alcohol, Canopy predicts that the market demand for CBD products derived from hemp will be valued at $10 billion by the year 2023, with hemp-derived CBD beverages making up nearly $1.1 billion of that amount.
However, there are still a few issues these companies have to overcome, both with regard to market challenges and legal hurdles. The first is the fact that CBD and THC are not allowed in alcoholic beverages. With a growing number of players in this burgeoning field, many are excited to see what opportunities this field may offer.
One company that is set to benefit from the interest of the alcohol industry in the cannabis sector is Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF), whose vast experience and dominance of the extracts segment in Canada puts it in pole position to be the ingredient supplier of choice for alcohol companies venturing into making cannabis-based drinks.
NOTE TO INVESTORS: The latest news and updates relating to Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF) are available in the company’s newsroom at https://cnw.fm/PULL
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The post 420 with CNW — Why the Alcohol Industry Is Investing in Cannabis appeared first on CannabisNewsWire.
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