Cannabis-infused edibles are a booming market. The near-endless array of cannabinoid-rich foods and beverages are coupled with positive sales figures, suggesting that edibles should stick around as a market leader in the years to come.
Why Does It Matter?
Edibles have been a steady gainer in many markets as flower and concentrates continue to hold the top sales spots.
Industry statistics for 2022 placed edibles as the third-highest-selling cannabis category (9%) behind concentrates (22%) and flower (61%), according to Flowhub.
An October 2021 report from Headset projected the US to generate $3 billion in sales this year.
The years ahead should see further growth.
BDSA's 2022 infused beverage and food report stated that edibles made up approximately 15% of the market spending this year, with figures projected to increase 2.2x by 2026.
The report cited various reasons consumers turn to edibles, including improved sleep, relaxation and pain relief.
Edibles market growth appears fueled by potential regulation changes. "This slight increase in share estimates changing regulations in markets such as Pennsylvania that don't currently sell edibles," said Dana Mason, VP of wholesale marketing for Cresco Labs Inc (OTC:CRLBF).
In April 2022, state representative Dan Laughlin proposed a bill allowing edibles into Pennsylvania's medical program.
Anna V. Pham, a licensing and economics specialist at firm Vicente Sederberg LLP, said the pandemic had fueled the market interest. She noted shifts to non-smoked or vaped products during the pandemic's peak.
"We have not necessarily seen the peak of edibles market share but a stasis given the current regulatory regimen," said Pham who added that she feels the market has room to grow as state markets expand.
Lifelong Consumers?
Select findings suggest that edibles sales are not a fad.
Data firm GOODQUES dove further into the habits of edibles consumers, noting that 35% of Americans between 21 and 54 are in that category. Of those users, 38% reportedly consume at least once a week or more.
Holland Martini, co-founder and chief insights officer agrees that edibles are an entry point for many cannabis-curious consumers.
"A lot of people who are frequent cannabis consumers don't even smoke or never have," Martini said.
Others offered similar opinions. "We've seen an influx of new cannabis users throughout the pandemic; however, many new users prefer more simple ways to consume cannabis rather than smoking," said Blake Schroeder, CEO of Medical Marijuana Inc (OTC:MJNA).
Schroeder reported that gummies and beverages were the most popular consumables purchased.
Maria Vorovich, GOODQUES co-founder and chief strategy officer, echoed the sentiment. "The kind of people that are entering the space are people who would never consider themselves stoners or potheads," she said of the consumer market base.
Sources expect consumers to make cannabis edibles part of their daily lives as cannabinoid-specific options become more accessible.
Maigread Eichten, CEO of Coda Signature, said minor cannabinoids like CBN, CBG and THCv are signs of future market potential.
"We are at the forefront of that progress with cannabis and minor cannabinoids, which will undoubtedly result in edibles continuing to increase their share," she said.
GOODQUES' data concluded that while edibles are widespread, most consumers aren't brand loyal. Instead, word-of-mouth recommendations play a vital role. In addition to user testimonies, BDSA cited flavor (39%), brand familiarity (29%) and price (27%) as leading purchasing factors.
Copycat Concerns?
A long-held practice in the cannabis industry has seen unlicensed brands copying popular household brands. Leading brands have tried to quell the issue for years and are ramping up efforts as of late.
In April, over a dozen leading CPG brands and organizations urged Congress to amend the SHOP SAFE Act to address copycat edibles brands, saying they "must be stopped."
The letter, sent by General Mills, Inc. (NYSE:GIS), MONDELEZ INTERNATIONAL INC Common Stock (NASDAQ:MDLZ), PepsiCo, Inc. (NASDAQ:PEP) and The Association for Dressings & Sauces, among others, cited pot products resembling household items including Trix cereal, Cheetos and Oreo cookies.
"Like any industry, there will always be those who are simply looking to make a quick dollar," said Medical Marijuana Inc.'s Schroeder. He advised consumers to look for QR codes on packages that consumers can use to view a product's certificate of analysis.
Rhett Jordan, co-founder and COO of Massachusetts-based brand Greatest Hits Cannabis Co., noted that the issue occurs most in lesser regulated markets, citing New York and California as markets not taking action. Jordan said the solution comes from federal reform and that legalization would allow established brands to take actual action against offending cannabis brands.
"If federal legalization existed, these companies can sue because it's legal, which currently is not the case and therefore, the copycat/copyright issue will continue to be a blemish on the industry."
