CBD is everywhere nowadays, and beverages are no exception. In fact, they provide one of the easiest ways of consuming CBD: while taking tinctures or capsules feels like a relatively medicinal approach, drinking water, juice, a soft drink, or coffee is part of everyone’s daily routine.
A growing number of companies in the US are currently producing and distributing CBD beverages. These are mainly targeted at consumers who are less interested in the medical benefits of CBD; rather, they consider CBD beverages as a healthy, organic way to relieve stress and enhance their mood and mental state. CBD beverages are also marketed as a better alternative to sugary sodas, addressing those in pursuit of a healthy lifestyle.
- A growing market
- The changing regulatory framework
- CBD bottled water and soft drinks
- CBD alcohol beverages
- Do CBD beverages have immediate benefits for your health?
- Innovation and emerging trends
- Challenges for the US CBD beverages industry
A GROWING MARKET
The projected numbers for the global beverage industry, in general, are nothing short of astonishing: revenue generated is estimated to reach $1.9 trillion by 2021, with a 3% annual growth rate.
The global organic beverage industry is growing at an even faster rate, estimated to reach a whopping 8.5% over the next 3 years. Hemp and CBD beverage products could reach a sales value of $1 billion by 2020 in the US alone.
An important number of small-batch, local companies are already successful in the CBD beverages market, each selling a small lineup of CBD beverages in a limited number of states. Only a few companies, such as Sprig, are present across multiple states. Sprig’s 17-state distribution channel is considered the most important in the US CBD beverages sector.
Therefore, it is no surprise that multinational companies (such as Coca-Cola, Corona, and Modelo) are investing in hemp producers.
They are said to be researching their options in launching CBD products, but still seem hesitant to join the movement. This is mostly due to the still-fluid regulatory framework that makes production and distribution at a federal level extremely complicated.
THE CHANGING REGULATORY FRAMEWORK
The legal status of cannabis products in the US varies from state to state. Although cultivation of hemp has been legalized in all states through the 2018 Farm Bill, the regulations about what kinds of cannabis products are allowed in each state are still disparate.
This is particularly true for the cannabis beverages industry, where companies face an ever-changing regulatory framework. In short, FDA approval is necessary for federal distribution. Some states allow the use of THC in beverages, but most don’t.
Most states allow CBD beverages, but a few don’t, and others recently restricted CBD use to ready-made beverages only. An example of this is in New York, where bars and restaurants that jumped early on the CBD bandwagon and started including CBD cocktails and other CBD preparations in their menus had to stop after a new law that banned on-the-spot preparation of CBD beverages took effect in July 2019.
In Los Angeles, California, home to another booming CBD market, a 2019 ban outlawed alcoholic CBD beverages, obliging bars and restaurants that had invested in developing CBD cocktails to withdraw them.
Such differing regulatory approaches between states make nationwide approaches and strategies difficult to develop and implement. Therefore, despite the dynamic growth rate of the sector, the largest beverage and retail brand names play it safe in their proposed cannabis products, and either still have none (neither Coca-Cola nor Pepsi had any CBD products on offer at the time of publishing) or restrict their offerings to the most plain of CBD beverages; namely CBD water.
There are even companies which choose to provide “hemp-flavored” products. These don’t contain either CBD or any other cannabis products, and thus are not subject to CBD regulations.
While frustrating for consumers, this situation can actually be beneficial to the smaller, local companies. These don’t usually distribute their products at a federal level and can adapt their production and distribution more easily to the shifting local legal framework (read more about CBD’s legal status here).
It is hardly surprising. therefore, that most CBD beverage companies currently limit their distribution within specific states.
CBD BOTTLED WATER AND SOFT BEVERAGES
Non-alcoholic cannabis beverages are the most important segment of the CBD beverages industry.
There is a multitude available, including sodas and sports drinks, CBD infusions, tea and kombucha, and coffee. Whatever your beverage preference, chances are there is at least one CBD product available on the market. CBD water, including low-sugar, flavored, and sparkling water, is definitely the star of non-alcoholic CBD beverages.
Companies which produce CBD-infused sparkling water have various marketing approaches. Whereas Sprig or Alkaline aim at entering the mass retail market, Recess focuses on the specific target group of millennials; Sweet Reason and Green Road promote CBD to those pursuing a healthy and organic lifestyle, and Vybes aims at trend-setters. Their points of sales differ depending on their marketing focus. Therefore, you will not find the same brands in the supermarket and the uptown delicatessen store.
THC beverages are allowed in only a few states, as THC is a psychoactive substance extracted mainly from marijuana, legalized for medical or recreational use in only a handful of states.
Therefore, only small-batch companies with distribution channels within those states have created beverages infused with THC. These include the Oh Hi Sparkling Seltzers in Colorado, which contain 10mg of THC, and the Lagunitas Hi Fi Hops in California, supported by Heineken and presented as a beer (although it is really a sparkling water infusion).
CBD ALCOHOL BEVERAGES
Although many companies will tell you that, in the future, they expect to see CBD beer, CBD wine, and CBD cocktails available on the market, CBD alcoholic beverages are rare at this point.
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is regulating how domestic hemp products are processed and requires the approval of the beverage formulation and production process before it can be sold. Mixing alcohol with THC remains illegal.
Infusing wine with CBD is done in some California wineries; however, it is not widely distributed. In fact, it is only available for on-the-spot sales and consumption. Infusing wine with THC is illegal if the wine contains alcohol; therefore, a few California wineries also prepare non-alcoholic wine infused with small doses of THC. Again, in this case, distribution is limited.
DO CBD BEVERAGES HAVE IMMEDIATE BENEFITS FOR YOUR HEALTH?
Players in the CBD beverage industry usually claim that CBD beverages enhance general wellness, relieve stress, promote mental relaxation, and aid a good night’s sleep. They mostly present CBD beverages as a healthier choice than soda, instead of adopting a more medical approach and promoting the possible health benefits of CBD.
This is quite understandable given FDA’s guidelines. It is also honest: the CBD concentration in existing beverages is pretty low, with most containing from 7mg to 25mg of CBD in a total of 250ml to 500ml. Therefore, most CBD beverages will only have a slight effect, if any. CBD water will not take away pain in 15 minutes, as a tincture would, and a THC “beer” will not make you high. This is not to diminish the CBD value of the beverages, but it would be unfair to have high expectations when the dosage is so small.
Finally, the health benefits of CBD beverages depend on the CBD terpenes included. The flavor and taste of CBD are due to terpenes — the aromatic compounds which can be found in all plants. There are more than 100 terpenes in hemp, including myrcene, limonene, linalool, and humulene.
Some beverages embrace the bitter, organic taste of hemp extracts and include terpenes, while other companies search for odorless, flavorless CBD that could be added to your usual beverage as a supplement in a neutral way. This approach tends to exclude terpenes. However, as many terpenes have been found to have anti-inflammatory, analgesic, or antioxidant properties, excluding them from the beverage means weakening the CBD’s beneficial effects. Therefore, the more terpenes in a beverage, the stronger its bitter, organic taste, as well as its potential beneficial health benefits.
A word of caution is still necessary: as with any CBD product, CBD in a beverage might interact negatively with prescription drugs. Therefore, if you are taking prescription drugs, it is advisable to consult your doctor before enjoying CBD beverages.
CHALLENGES FOR THE US CBD BEVERAGE INDUSTRY
Although CBD beverages are currently increasing in popularity, they are still far from being mainstream beverages, found in every retail store, like soda, bottled water, and beer.
Indeed, the major beverage companies need to overcome quite a few hurdles in order to launch products in the CBD beverage sector. The current unstable regulatory framework is a critical challenge, but it is not the only one.
Standardizing cannabis ingredients is also crucial.
Crops, farming methods, extraction methods, and the final cannabis ingredients present inconsistencies that are incompatible with large batches and mass production. That is why reputable CBD producers test their products repeatedly during production to ensure potency and purity.
Mixing CBD into beverages also requires the development of more suitable CBD formats, as CBD is lipophilic and essentially oil, and “oil doesn’t mix with water.” Many beverages require a good shake before using them; this mixes the CBD with the beverage’s watery base. As this is hardly the best customer experience, beverage companies actively seek better mixing methodologies, as well as looking for water-soluble CBD.
So, what’s the verdict? Are CBD beverages just a fad or are they here to stay? And do they offer any health benefits?
While federal legislation is unclear, and unless the industry’s mega-players enter the market, it looks as though CBD beverages will be a small but swiftly growing part of the beverage industry. This is not necessarily bad news, as it will encourage experimentation. Consumers can look forward to the passion brought by smaller firms and aficionados into their drinks.
It is bad news, however, if you are looking at CBD beverages as a way to enjoy the many health benefits CBD is believed to offer. Many CBD beverages will provide few health benefits, although they still are a healthier alternative to sodas.
In short, CBD beverages are here to enjoy, and probably here to stay (excluding a surprise legal U-turn). But if you’re looking for a way to treat your arthritis, they may not be the best choice.
Have you tried CBD beverages? If so, what did you think of them? Let us know in the comments!