Cannabis Edibles Market Set to Quadruple in U.S., Canada to $4B
A new report sees the market for edibles growing from about $1B to $4B by 2022, apparently at the cost of smoked marijuana.
Marijuana edibles have long been an area where rapid growth is anticipated. Now, a marijuana market research company has put a number to it: $4.1 billion.
That’s the amount consumers in the United States and Canada are expected to spend on marijuana edibles by 2022, according to projections in a report from ArcView Market Research and BDS Analytics. It seems far from a pie-in-the-sky estimate considering consumers in both countries spent $1 billion on edibles in 2017. Marijuana edibles have moved so fast into the mainstream that they were named a food trend of the year for 2018 and have quickly created opportunities for entrepreneurs.
“Legal cannabis-derived edible products, from candy and chocolate to infused beverages, is a sector worth watching over the next few years,” the report stated. “It has become clear that the legal cannabis market is about much more than inhaling the smoke of smoldering cannabis flower.”
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Other than the stunning $4.1 billion number by 2022, highlights from the report’s other findings included the following.
- In Colorado, 64 percent of adult-use marijuana customers tried an edible; the number is 55 percent in California
- Edibles are projected to grow from 12 percent to 14 percent of the total cannabis market by 2022, while flower drops from 50 percent to 36 percent
- Edibles’ share of the total cannabis market has already more than doubled, from 5.4 percent in 2011 to the current 12 percent
- Worldwide sales of cannabis-based products are expected to reach $32 billion by 2022 (it was $9.5 billion in 2017)
All this signals opportunity for investors and entrepreneurs who want to get in early on what ArcView and BDS Analytics expect to become one of the biggest areas of growth in the adult-use cannabis industry. As the report notes, branding and standing out from competitors is easier with edibles, where individualized packaging and marketing can distinguish a brand on a dispensary shelf.
Attracting Big Industry
The potential for edible marijuana sales already has attracted the attention of giants in the Consumer Packaged Goods industry, according to a letter in the report from Tom Adams, the editor-in-chief of ArcView and managing director of BDS Analytics.
He noted the several recent develops in the marijuana-infused beverage market. They include the $4 billion investment by Constellation Brands into Canada’s Canopy Growth Corp., the plan at Molson Coors Brewing Co. to develop a cannabis beverage and the fact Heineken NV’s Lagunitas brand already sells a non-alcoholic, THC-infused beverage.
It’s even more impressive when considering that beverage sales make up only about 6 percent of edible cannabis sales in the U.S. Clearly, these companies see the potential for big growth. “That is clearly just the start of what will be a product innovation explosion as major CPG companies come rushing into the legal cannabis market in the years ahead,” Adams wrote.