Three Reasons Why Cannabis Edibles and Beverages will be Game Changers
By: Narbe Alexandrian
Tags: Venture Capital, Cannabis, Edibles, Cbd, Business

Edibles/beverages will increase general cannabis penetration across all segments

The segment of cannabis consumers with the most potential for growth are “intenders”: those who do not use cannabis on a regular basis but are willing to become regular consumers.

Data shows that intenders represent ~33% of the population today, with over 50% of intenders having tried cannabis in the past. Deloitte suggests that intenders favour extract-based products because they are perceived as a more discreet, safe, and familiar way to consume cannabis. Legalized edibles and beverages will make cannabis more accessible to this segment, subduing the illicit market.

Edibles appeal to 59% of the intenders surveyed by Deloitte, especially male-identified Ontario residents between the ages of 18 and 34, while a younger-skewing 37% of intenders gravitate toward cannabis-infused beverages. Cookies, brownies, chocolate and gummies are intenders’ preferred edible format while tea is their preferred beverage format, suggests Deloitte data.

Dosage control will empower consumers to finally take control

Dosage control is the key to developing sustainable trust across the segment. Canopy Rivers’ internal research shows that US mass-market penetration of cannabis edibles/beverages has failed due to issues surrounding the high-dosed products on shelves, with upwards of 100–250mg of THC in products, equivalent to 8–25 joints.

Over 25% of cannabis “rejectors” (those who don’t plan to use cannabis) had tried cannabis in the past, with a large chunk having been turned off by a high-dosed homemade edible. As the Canadian regulations come into force and the dosage limit of 10mg of THC are put into play, consumers will feel the “Big-Mac effect” — a consistent product, no matter where and what brand they buy, that they can use to properly control dosage.

Cannabis-infused beverages are expected to cannibalize the alcoholic beverage market

Cannabis-infused beverages are in a prime position to capture a share of the multi-billion-dollar alcoholic beverages market, which is predicted to grow to US$1.7 billion by 2025. Based on the Deloitte study, over 1/3 of intenders expect cannabis-infused beverages as an alternative to (and even a replacement for) alcoholic beverages, due to the low calorie intake, and ability to reduce stress, improve mood, socialize, and/or alleviate pain. Cannabis-infused beverages continue to experience rapid growth in U.S. markets, and Canada should anticipate considerable demand for this product category.

The Canopy Rivers Advantage

Canopy Rivers invests in innovative companies that are well-equipped for the emerging cannabis-infused edibles and beverages market. Here are just some milestones that our portfolio has accomplished to date:

Agripharm holds exclusive Canadian rights to the IP and brands of SLANG Worldwide, an industry-leading manufacturer and distributor of CPG products including District Edibles.

In June 2019, TerrAscend acquired Valhalla Confections, a manufacturer of cannabis-infused gummies. Valhalla Confections was co-founded in California in 2014 and rapidly gained popularity as one of the most consistently dosed, best tasting, and fast acting gummies on the market.

Greenhouse Juice, one of the leading North American cold-pressed juice producers, is working on bringing a line of CBD products to market.

Herbert, an adult-use cannabis beverage and edibles brand, is slated to produce THC infused extract-based products out of Greenhouse Juice’s state-of-the-art production and processing facility.

Whether it’s working within edibles, beverages, or other segments of the cannabis value chain, Canopy Rivers helps companies find the right suppliers, distributors and retailers, so that companies can focus on what they do best — building great brands.