Jessica Lukas is the chief commercial officer (CCO) of BDSA and helped produce a report called the “U.S. Cannabis Market Forecast.” In this report, Lukas projects that the cannabis edibles market earned an estimated $3 billion in sales in 2021 alone. Sales of edibles are expected to grow to $6 billion annually by 2025. And a large part of that growth will be from new product development in CBD and cannabis beverages.
The cannabis industry has expanded significantly during the past few years, and now, there are a lot of people looking to take advantage of cannabis food and beverage production. At the same time, this is an industry that has seen a lot of challenges recently, and it is important for people to be prepared. Take a look at a few of the top tips that people need to follow if they want to streamline cannabis food and beverage production.
What is the Current Legal Status of Cannabis Beverages?
The relationship between federal law and any cannabis product remains clear. Cannabis is still a federally prohibited Schedule 1 substance under the Controlled Substances Act (CSA). However, in states where medical or adult-use (recreational) cannabis is now legalized, there is some gray area when it comes to infused beverages. The 2018 Farm Act made CBD beverages nationally legalized. The same is not true for cannabis-infused cocktails, energy drinks, wines, juice, iced coffees, and other products.
Edibles account for approximately 15% of all dollar sales at dispensaries in BDSA-tracked states and markets in 2021. However, cannabis confectionary products (particularly gummies) make up an estimated 70% of all edible sales in legalized states. The most recent BDSA report indicates that cannabis-infused beverages now make up about 5% of all edible sales. But the segment is rapidly growing as more states legalize the production and sale of cannabis beverages.
Leafly published a directory of popular cannabis-infused beverages. Some of the leading manufacturers and products include:
- SteepFuze CBD Coffee
- Strawberry Lemonade Cannabis Quencher (Vcc Brands)
- Legal Sparkling Tonic
- Sprig Soda
- Tomato Jane (van doran)
A report from Fortune Business Insights shared that cannabis beverages with THC are now legally permitted for manufacturing and retail distribution in ten (10) states. You can try a cannabis beverage in states like Arizona, Colorado, California, Illinois, and Nevada.
Even though a lot of people like to stick with one supplier they know, it is always better to work with multiple suppliers. That way, if something goes wrong with one supplier, a cannabis food and beverage company can lean on the other suppliers to pick up the slack. This is not true, however, for states where vertical integration is required for cannabis businesses. When the raw cannabis used in the edible products must be cultivated and processed exclusively by the retailer.
Make Meaningful Lifestyle Branding and Connections With Consumers
Next, cannabis food and beverage companies need to make meaningful connections with buyers. It is critical to talk to buyers to collect feedback from them. Figure out what they like, figure out what they don’t like, and use this information to guide changes. This can increase productivity, reduce mistakes, and keep customers happy.
Marketing a cannabis beverage and scaling popularity with consumers requires lifestyle branding. Because cannabis beverages are new, they are also trendy. Consumers want to relate to a brand persona that fits their lifestyle. Whether that means low-calorie sparkling water or decadent cannabis iced-coffee concoctions. Influencer marketing is key to communicating the brand image to consumers under the age of forty.
Do Not Expand Too Quickly
Even though a lot of cannabis food and beverage companies would like to expand as quickly as possible, it is always better to start off by specializing in one specific product. It is critical for companies to find one specific thing they can do well and hang their hat on. Then, if that goes well, it might be time to expand into other relevant products and services. If companies expand too much too fast, they will not have a strong identity, and customers will have a difficult time figuring out what exactly it is that they do.
Use Tracking Software To Monitor Productivity
Finally, it is important for cannabis food and beverage companies to take advantage of advanced software programs that they can use to monitor productivity. That way, if there is a bottleneck happening somewhere in the supply chain, they can identify and rectify it quickly. States have strict laws for cannabis consumables and tracking from seed to sale for consumer safety and quality assurance.
Prepare for the Growth of the Cannabis Industry
Ultimately, these are just a few of the most important tips that cannabis food and beverage producers need to keep in mind. This is a competitive industry, and it is critical for companies to leverage all resources at their disposal. Paybotic “takes the pain out of payment processing,” serving the cannabis industry and supporting more than one thousand (1,000) dispensaries across the United States.
Learn more about our financial services tailored specifically for medical and adult-use (recreational) cannabis dispensaries and e-commerce businesses. Ask our team about our Merchant Cash Advance service to leverage the funds you need when you need them most to help your business grow.