The marijuana industry’s growth over the past couple of years has been surprising, even from a corporate level. The acceptance for cannabis-based products increased considerably over this time, especially after the US Federal government passed the Farm Bill into law in December.
A few businesses have been quick to take advantage of the rising awareness on the benefits of CBD and will stand to make gains in the long term. These companies have been engaged in a rat-race to increase their own hemp production and engage in partnerships to develop innovative products in a budding market that holds a lot of promise.
The hemp industry is estimated to grow at a CAGR of 18.4% between 2018 and 2022. And according to Hemp Business Journal, hemp-derived CBD industry will be valued at around $1.3 billion by 2022, compared to just $390 million in 2018.
2019 is already seeing active research on CBD-infused products, but beverages will be first to take shape in this regard. Except for an occasional spark of innovation, the beverage industry has largely been insipid over the past few years. This trend is set for a change soon.
From water to coffee, pot companies are experimenting with a wide range of drinks that can be infused with CBD. These businesses are betting on the recent studies that reveal the health benefits of CBD intake to boost sales, as more countries and regions take a liberal stand on hemp cultivation and use.
Among the companies making headway in the CBD-beverage segment is New Age Beverages Corporation (NBEV), which has inked a deal to develop and distribute Marley branded cannabis-infused beverages. Initial market rollout to customers will be in Colorado, Oregon, Washington, and Michigan where cannabis is legal for responsible adult consumption.
The brewer of Corona beer and Svedka vodka, Constellation Brands (STZ), meanwhile, has stashed about $4 billion in Canadian weed giant Canopy Growth Corporation (CGC), in its biggest investment till date. Both the companies together plan to produce their own cannabis drink, and investors are betting on this product to drive future sales growth.
Separately, premium water brand The Alkaline Water Company (WTER) is currently waiting for FDA approval of its cannabis-infused water. Notably, the FDA has been pretty liberal with CBD products so far, and approval is expected sometime early this year.
Besides these, a slew of smaller firms is also in the process of consolidating and developing drinks based on cannabis. With a favorable market environment and rampant ongoing researches, we are sure to see some great stories coming out of the beverage industry this year.
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