Millennials Are Driving the Surge in CBD Usage
"We anticipate that the beverage component of the CBD landscape will be over $1.5 billion," says industry exec.
Tara Rozalowsky, vice president of beverages and edibles at Canopy Growth Corp (NASDAQ:CGC), discussed the latest developments on the CBD front at the Benzinga Cannabis Capital Conference on Thursday.
The Pandemic and CBD
The COVID-19 pandemic helped catalyze what was already a growing demand for CBD products, Rozalowsky said.
“CBD in general has become so mainstream, hasn’t it? Over the past two years, even before COVID, a lot of us were looking for more progressive, more in-control ways to take control of our physical and mental wellness,” the Canopy Growth exec said.
In the domestic U.S. market, Rozalowsky said about one-third of consumers have already tried CBD products, and another third of the market said they plan to try it within the next year.
CBD Market Projections
Millennials are driving the surge in CBD usage, with over half of U.S. millennial consumers having already tried a CBD product, Rozalowsky said.
“This puts the projection for the overall CBD market in the U.S. at around $10 billion by 2023.”
A large part of that growth will come from the CBD beverage market, in her view.
“We anticipate that the beverage component of the CBD landscape will be over $1.5 billion across our industry just in the next couple of years, so beverages will be one of the fastest-growing subsegments within total CBD,” Rozalowsky said.
The CBD Beverage Opportunity
The familiarity of beverage products creates a unique opportunity for disruption, Rozalowsky said, adding that the U.S. CBD beverage market is extremely fragmented and cluttered at the moment.
“It presents a very clear and compelling opportunity for a company like Canopy Growth to come in there. We are better-resourced and better able to manufacture a science-backed solution that we can scale and we can run through the space in an intuitive way for consumers,” she said.
In March, Canopy launched its Quatreau CBD beverage brand in the U.S. market, and Rozalowsky said Canopy’s partnership with Southern Glazer’s Wine & Spirits allowed the company to distribute Quatreau in seven states right out of the gate.
“We’re going to be adding more and more states through this partnership that Canopy has with Southern Glazer’s Wine & Spirits throughout this year. And I will make a plug to say it’s because of Canopy’s partnership with Constellation Brands, Inc. (NYSE:STZ) that we were able to secure the partnership with Southern,” she said.