‘Lipstick effect’ driving boom in CBD and cannabis-infused drinks

By Andrew Catchpole

Published: 18 June, 2020

The global cannabis drinks market will treble in value by 2024, according to research by market analyst Prohibition Partners.

According to its recently published Disrupting Drinks report, cannabis is fast growing in every segment of the drinks industry, from alcoholic drinks to wellness beverages and everyday boosters like tea and coffee.

This growth is driving a global market for cannabis and CBD products that is predicted to hit US$1.82bn by the end of 2020, and US$5.8bn by 2024.

The report finds that currently “CBD and cannabis infused drinks are benefiting from ‘the lipstick effect’, whereby consumers seek out small luxuries, during Covid-19 lockdown and beyond”.

The potential impact on the drinks trade, with cannabis-infused drinks seen as a healthy option and legalisation of marijuana sales gathering pace around the world, is clear.

One in four consumers from a 15,000-strong poll in the US and Europe said they “would be willing to try cannabis-infused drinks”, while 28% of people that have already tried such drinks reported that they intended to buy more on the coming months.

The report found that the purported relaxing properties of CBD and cannabis-infused drinks are proving popular as an antidote to the stress of living with the Covid-19 pandemic.

““We are on the cusp of a drinks revolution, for centuries, legal socialising has either involved alcohol, or sobriety; outside of caffeine and nicotine, ultimately you either consumed alcohol in varying qualities, or you didn’t,” said Stephen Murphy, MD of Prohibition Partners.

“Cannabis infusions bring a third choice to leisure consumerism, and consumer research from Prohibition Partners finds that it’s a choice a lot of people plan to make.”

He added that cannabis infusion “will truly disrupt the drinks market”, predicting that those companies that embrace the growing market would find it a lucrative one moving forward.

In the UK, although well behind the US embrace of CBD and cannabis-infused options, some mainstream wine and spirits companies have already moved to include CBD products in their portfolio, such as Enotria & Coe’s OTO, which CEO Troy Christensen reported before the on-trade shutdown as “doing well” as an optional addition to cocktails.

A raft of RTD CBD drinks products have also been launched to market, including beers and alternative adult softs drinks, with mainstream high street brands such Bill's launching mindful drinking menus including CBD-infused options.

Prohibition Partners has previously estimated the UK black market for cannabis to be worth £8bn a year, with that potentially growing to over £16bn if cannabis is legalised, although the UK government has so far shown little appetite for following other western countries and US states down that path.

The Disrupting Drinks report was published ahead of the online Prohibition Partners Live event next week, which will explore the growing impact of cannabis-related products on many sectors, including food and drink.

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