BDSA Cannabis Insights: 2024 Beverage Category Trends

Despite ongoing industry headwinds, the cannabis industry is still growing rapidly, with BDSA forecasting that US cannabis retail sales will total more than $32 billion in 2024. While THC beverage market makes up a small share of total cannabis sales, the beverage category can yield significant returns for brands that take a strategic, insights-driven approach to product assortment, formulation, and audience targeting.

How are Cannabis Beverages Performing in 2024?

Beverages make up 1%-dollar share (.9% to be exact) of all cannabis sales, and totaled $54 million with an increase of +8% between Q2 2023 and Q2 2024 across BDSA tracked markets.

Narrowing the focus to the universe of edibles, Beverages made up 6% share of Edible sales in Q2 2024, and is the fourth biggest edible category behind Candy (78% share), Chocolates (7% share), and Pills (6% share).

The Drinks subcategory remains the largest Beverage subcategory (making up 70% of Beverage sales), followed by Shots (12%), Powdered Mixes (10%) and Other Beverages (7%). The growth of Shots has been especially strong, with dollar sales of Shots almost doubling between Q2 2023 and Q2 2024, totaling $6.7 million in Q2 2024. Shots growth was especially strong in Illinois, Massachusetts, and Ohio.

In Q2 2024, there were 144 total brands selling Beverage products across BDSA-tracked markets, with the top ten best-selling THC Beverage brands bringing in a 59% share of total Beverage sales. 52 of these brands were multi-state brands, and 72 were multi-category brands.

THC Beverage Performance by Market

Across the 15 BDSA-tracked markets, all but two markets saw either an increase or stability in Beverage sales over the past year. The two notable exceptions were Colorado and Massachusetts.

Missouri, which launched adult-use sales in early 2023, perhaps unsurprisingly grew its Beverage sales the most last year, totaling $15.3 million in 2023, up from $7 million in 2022.
Michigan, which has consistently outperformed other mature adult-use markets, also grew its Beverage sales significantly. Beverage sales in Michigan totaled $6.1 million in 2023, a +32% year-over-year increase.
California had the most developed Beverage brand landscape in Q2 2024, with 47 brands active in the state. Beverage Sales in California totaled $19.5 million in Q2 2024, a year-over-year increase of +6%.
The emerging Massachusetts market also has a budding Beverage brand landscape, with 34 brands active in the state last quarter, however it did see a year over year decrease in sales. Massachusetts brought in $5.7 million in Beverage sales in Q2 2024, a decrease of -3.7% from Q2 2023.

Beverage Product Attribute Trends

A careful consideration of consumer preferences and product attribute trends is a key step for any brand looking to launch a new product. This is especially true in smaller categories like cannabis beverages, where attributes like dosage and flavor can be make or break for a brand looking to make a splash with a new product.

Looking at consumer preferences, BDSA Consumer Insights show that 43% of edible consumers in adult-use states prefer a dosage of 10 mg or less of THC per occasion, with dosages between 2.5 mg and 5 mg of THC being the most preferred (with 19% preferring this dosage).

BDSA Retail Sales Tracking show that 47% of beverages sold in Q2 2024 were 100 mg products, while only 1% of products sold were 5 mg products, suggesting that there is an audience expansion opportunity for brands that can effectively launch a lower-dose product, especially in markets with a less saturated beverage brand landscape. Of course, the brand must also align to enough frequency and consumption occasions for the audience to be an effective revenue driver.

33% of consumers citing taste or flavor as a top driver of their product choice, so flavor is another attribute that brands looking to enter the beverage category should consider. Unlike the Gummy subcategory, which is dominated by berry flavors, top flavors in the Beverage category are playful flavors you may see with niche beverage products in grocery or convenience stores with Strawberry Lemonade, Fruit Punch, and Orange taking the top three spots in the best-selling flavors list.

Beverage Brands

Best-Selling Beverage Brands of Q2 2024

Keef Cola
St. Ides
Uncle Arnie’s
Sip Elixers
Tonic

St. Ides
Journeyman
Drink Loud

¹BDSA Tracked Markets include: AZ, CA, CO, FL, IL, MA, MD, MI, MO, NJ, NV, NY, OH, OR, and PA

²BDSA Tracked Shot Brands with >$500K in Q1 2024 Sales

Looking for more cannabis industry insights? Check out our recent blog on Maximizing Cannabis Brand Revenue Through Product Mix Optimization and SKU Rationalization. Want more information on BDSA products and services? Reach out to request a demo.