Medical Marijuana is currently legal in 33 US States. Colorado and Washington in 2012 became the first two to legalize marijuana for recreational purposes. 9 States in total have followed. Last year Canada legalised medical and recreational marijuana. Attitudes towards cannabis are now changing especially with younger consumers, who perceive ingesting cannabis as less harmful than alcohol.
What makes cannabis infused food and drink so appealing to consumers? Cannabis in food and drink appeals to individuals who don’t enjoy smoking or are worried about the health concerns associated with smoking. ‘Edibles’ (the colloquial term for cannabis infused food or drink) can also provide longer lasting relief to chronic symptoms like pain, often making them a preferred choice for medical patients.
So just how big is the potential for cannabis in the food and beverage industry? It is estimated the US cannabis market will reach $75 BN by 2030. Many food corporations are looking into Cannabidiol (CBD), a naturally occurring chemical found in cannabis. It is one of the most highly concentrated and studied compounds found in the plant. CBD has numerous health benefits such as pain management and relaxation, it is not to be confused with THC, which is the ingredient in cannabis that creates a high.
Companies are looking at infusing the CBD ingredient into food and some have already started. It is thought CBD infused drinks are more likely to threaten the sales of alcoholic beverages than non-alcoholic, but the product has been attracting interest from a range of major food and beverage corporations and has seen companies start to invest seriously:
- Molson Coors listed legal cannabis among the biggest possible risks to its business in its annual shareholder report in 2018. They have agreed a joint venture in Canada to develop non-alcoholic, cannabis-infused beverages with cannabis producer Hydropothecary Corporation taking a 57.5% stake in the start-up.
- Coca-Cola is said to be watching the cannabis sector and is rumoured to be in talks with Canada’s Aurora (Licenced Cannabis Producer).
- Constellation Brands, who produce numerous drinks including Corona is said to have invested more than $4 BN into Marijuana producer Canopy Growth to make cannabis based products.
- Kiva and Défoncé are leading the way within THC infused chocolate bars and gummies which are sold in limited amounts due to containing THC. These products are currently only sold in California but as legalisation spreads they may be stocked elsewhere.
Cannabis products have faced challenges with legislation and regulation. Many producers have been working towards marketing to appeal only to adults and creating child resistant packaging. The development of cannabis infused food and drinks is still mostly in early stages and veering towards the drug working in a way that works for a higher number of consumers.
One of Speciality Food Associations (SFA) top 2018 food trends in the US was CBD starting to show up in restaurant dishes. In the U.S. alone, the cannabis edibles market accounted for $1 billion last year. This is significantly high considering marijuana is only legal recreationally in 10 States. Many eatery’s around the US and Canada have bought into the trend with food and drink ranging from cannabis infused lattes to full meals and desserts. The UK had its very first CBD Infused restaurant opened in Brighton last year which is also on trend with vegan and vegetarian food. Their website states they want to ‘change the way people think about the cannabis plant’.
What is the future for food and drink companies looking to invest in edibles? Whilst products on the market will range from food and drinks containing THC to brands infusing CBD, there are more options that are yet to be explored. It would seem companies selling in Canada and the 10 legal States in America have an early advantage in development of product for when (and if) cannabis is made legal in other countries and States. Also, companies such as Constellation who have invested in the market early will have an upper hand. Food and Beverage companies who have yet to delve into the cannabis market may be seen collaborating with cannabis companies in the next few years if the trend of edibles continues.
Connect Search have been monitoring developments across international markets for some time, working closely with global experts and pioneers in the sector. The full potential within the ‘edibles’ market will become clearer in the months and years ahead, as will the impact on talent requirements.
What we do know is that food and beverage businesses are investing significant funds in what looks to be a high potential market across many international regions. The race is on to take market share as opportunities open up, and whilst knowledge and expertise in the sector will grow over time, in the short-term, companies will require adaptable, open-minded leaders with the ability to spot opportunities, innovate and quickly create competitive advantage.