The Global "Cannabis Based Alcoholic Beverages Market" is expected to grow at a CAGR of 15.4% during the forecasting period (2022-2029).
Cannabis is a flowering herb well-recognized for its various therapeutical and medicinal benefits. Cannabis-based alcoholic beverages are made through the infusion of cannabis flowers, hemp seeds, Cannabidiol and tetrahydrocannabinol (THC) into alcoholic beverages such as vodka, wine, whiskey, gin, and beer. The legalization of cannabis is gaining impetus worldwide which is primarily fueled by the increasing recognition of cannabis possessing a range of legitimate medicinal benefits and therapeutic distribution channels. The rising popularity of innovative and premium alcoholic beverages is anticipated to drive the market in forthcoming years. The global cannabis-based alcoholic beverages market valued USD XX billion in 2020 and is estimated to reach USD XX billion by 2028, at a CAGR of XX% during the forecast period
A fundamental transformation in beverages industry is supporting market growth
Cannabis consumers are no longer limited to smoking flowers with joints, pipes, or bongs, but have their choice of an increasing variety of products, including concentrated and infused products. The beverage industry in itself is undergoing a fundamental transformation with the ingredients and additives. Consumers, especially in the developed markets of North America and Europe are constantly shaping the category amidst ‘all-natural’, ‘chemicals-free,’ and with ‘recognizable and herbal formulations’ trends and developments. Moreover, the utilization of cannabis in potential treatment of chronic pain, cancer, insomnia, neurological diseases, epilepsy, and anxiety, is expected to further accelerate the market trend of consuming cannabis-based alcoholic beverages. The favorable rules and regulations about the utilization of cannabis in various countries such as Canada and the U.S. are anticipated to leverage the market of cannabis-based alcoholic beverages positively. For instance, Cannabis is legalized in U.S. and Canada and decriminalized in some cities of India, and some parts of Europe for medicinal as well as recreational use which is expected to boost the production of cannabis-based alcoholic beverages within these countries. Furthermore, growing HoReCa sector and modern trade practices proliferate revenue. The increasing number of bars, pubs, clubs, and lounges in the developed and developing regions along with the rising popularity of premium sized alcoholic beverages is anticipated to propel the sale of CBD-infused beverages.
On the other hand, strict rules and regulations about the consumption and production of cannabis-based alcoholic beverages in various regions are expected to hamper the market growth. For instance, the cannabis-based alcohol beverage should first meet the requirements of TTB (Alcohol and Tobacco Tax and Trade Bureau) before launch. The lengthy approval process before the launch of CBD-infused drinks is anticipated to restraint market growth.
Cannabis-based wine to hold a considerable share in the global market
Cannabis-based wine is anticipated to hold a considerable share in the global market of cannabis-based alcoholic beverages owing to its tremendous popularity among millennials. The prominent market players are advertising CBD-infused wine as a healthy drink with low alcohol content and various health benefits are anticipated to propel the sale of CBD-infused wine worldwide. For instance, Cannawine, CBD infused wine producer and distributor claimed that the consumption of Cannawine gives a quick sensation of calmness and relaxation and it’s a healthy alternative to regular wine. Furthermore, many people on a tight budget are resorting to CBD-infused wine as there is no need to buy two products separately. CBD-infused wine offers a cheap way of enjoying beneficial effects from two products in a single drink.
By end-use, restaurants hold the largest share in the market. This is due to the growing demand for cannabis-based alcoholic beverage amongst youngsters. Due to its low alcoholic content and health factors, it is allowed to be sold in restaurants. The favorable rules and regulations applied by the government is also making it easily available for consumption in restaurants.
The offline distribution channel of cannabis-based alcoholic beverages such as clubs, pubs, bars, various restaurants, lounge, and others are anticipated to hold a significant chunk of CBD-infused alcoholic beverages sales. The rising trend of nightlife culture across developing regions is increasing the sales of alcoholic beverages in offline distribution channels which are anticipated to impact cannabis-based alcoholic beverages consumption positively.
Europe is expected to hold a significant share in the global cannabis-based alcoholic beverages market. Regulations in U.S. is limiting American market
Europe is expected to grow with a CAGR of YY% during the forecast period. The number of CBD users in the United Kingdom increased from 125,000 in 2016 to 250,000 in 2017, according to the Cannabis Trade Association. In addition, businesses in the region are launching new products to keep up with the growing trend of wellness beverages. CBD Ultra and Cloud 9 Brewing in Manchester, for example, have released the UK's first CBD Session IPA beer brewed with Cannabis Sativa extract. In the UK, it is fully legal to combine CBD with alcoholic and non-alcoholic products. On the other hand, North America cannabis-based alcoholic beverages market share is less when compared to other regions such as Europe. This is due to the fact that while THC is soluble in alcohol, it is illegal to combine alcohol and cannabis in the United States. In December 2018, Health Canada released regulations saying cannabis-infused alcoholic products would not be permitted in Canada, except where the alcohol content is minimal, such as in tinctures meant to be consumed a few drops at a time, and they would have to be labelled as non-alcoholic.
The cannabis based alcoholic beverages market is fragmented with global and local companies. Some key companies contributing to market growth include Anheuser-Busch InBev, California Dreamin', CannaVines, Dutch Windmill Spirits BV, Heineken NV, Klosterbrauerei Weißenohe GmbH & Co.KG, MJ Wines LLC, NABC, Inc., Rebel Coast Winery and Winabis, and Wine & Cannabis among others. The major companies are assuming numerous growth strategies such as product launches, acquisitions, and collaborations, contributing to cannabis based alcoholic beverages growth globally. For instance, in July 2019, Top Beverages, craft spirit start-up, has expanded its product portfolio with the launch of a gin and a rum infused with CBD. The product is widely available in the UK market. In April 2019, a group of alcohol and cannabis companies in Canada formed The Cannabis Beverage Producers Association to push the industry developments once cannabis edibles are legalized in Canada. In September 2018, CannTrust signed a strategic partnership with Breakthru Beverage Group to establish a cannabis-focused sales brokerage company.
COVID-19 Impact: Negative impact on the cannabis-based alcoholic beverages market
The demand for cannabis based alcoholic beverages decreased during the pandemic owing to the fear of consuming cold beverages resulting to health issues. Governments of various countries have imposed strict lockdown and social distancing measures across the world. Market closures, diminished eating-out trends, and the dampened demand for cold beverages have resulted in the aggravation of the market. The food services sector and other food businesses such as the bakery sector, beverage servings, and dairy are facing a huge decline in their revenue generation since January 2020, thereby resulting in the less sales of cannabis beverages.
Due to the lockdown, the biggest issue which was generated in this industry was supply chain disruption. Mostly, seeds and other products related to cannabis are imported from one country to other. For instance, The U.S. is a bigger importer of cannabis and related products as the consumption and legalization is high. As supply chain disruption took place, the cannabis and related products import got decreased which has ultimately impacted the market growth. Another factor that has impacted the market is consumer behavior. Consumers are also not able to receive the products or seeds due to a lack in the supply chain. For instance, patients with health issues are facing delays in the procurement of medicines of medical cannabis.
The global cannabis-based alcoholic beverages market report would provide access to approximately 45 market data tables, 40 figures, and 180 pages
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