Cannabis-based Alcoholic Beverages Market

The global Cannabis-based Alcoholic Beverages Market is valued at USD 1.53 Billion in 2024 and is projected to reach a value of USD 2.88 Billion by 2035 at a CAGR (Compound Annual Growth Rate) of 5.90% between 2025 and 2035.

Premium Insights

According to the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, cannabis is legal for adult use in 19 states and for medical use in 36 states. According to data from the National Survey on Drug Use and Health, in 2021, an estimated 36.4 million individuals aged 12 or older used marijuana in the past month. The percentage of individuals 12 or older who reported using marijuana in the past month gradually increased from 6.1% in 2008 to 13.0% in 2021. In addition, the National Conference of State Legislatures, U.S. stated that, 18 states, 2 territories, and the District of Columbia have legalized small amounts of cannabis for adult recreational use. Although the national government in Europe does not support the legalization of cannabis sales for recreational use, and all countries have prison sentences for illegal supply of cannabis-based. But the usage and consumption of cannabis-related products for medicinal purposes have been allowed by governments in various countries such as Germany, France, Italy, and Spain; said the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA). Thus, increased use of cannabis and its legalization in various countries are propelling the growth of Cannabis-based Alcoholic Beverages Market in recent years.

Furthermore, after the legalization of CBD in sports by the World Anti-Doping Agency (WADA), the industry has been opened to an immense opportunity because of CBDs benefit in treating inflammation and pain. According to a study shared in the Journal of Neuroscience, CBD essentially lightens the potentially overstimulating side effects of THC, which can help reduce the feelings of anxiety or paranoia that may come with the psychological effects that THC induces. Thus, Cannabis-based Alcoholic Beverages are positioning themselves as a healthier alternative to traditional alcoholic beverages. Many cannabis-infused drinks are low in calories, gluten-free, and can contain various natural ingredients, such as fruits and botanicals, appealing to health-conscious consumers who prioritize quality and natural ingredients. Moreover, the rising consumer interest in cannabis and the desire for new, innovative, & experiential products have fuelled the demand for cannabis-infused alcoholic beverages. These beverages, formulated with different strains and cannabinoid profiles, promise unique sensory experiences by blending the euphoric effects of cannabis with the soothing effects of alcohol. For instance, Lagunitas, Heinekens fast-growing California beer label, launched Hi-Fi Hops, which is a cannabis-based beverage with zero calories or carbs and is infused with Cannabidiol (CBD) and Tetrahydrocannabinol (THC). Similarly, PepsiCo-owned brand Rockstar Energy launched a line of hemp-infused drinks in Germany. Infused with hemp seed oil, spearmint, lemon balm, and only about 80 milligrams of caffeine, Pepsi is hoping to attract younger, female consumers and men between the ages of 18 and 34 years.

Key Highlights

• North America accounted for the largest growth with a revenue share of 40.30% in 2024,
• The Asia Pacific is expected to dominate the market during the forecast period,
• On the basis of Product, the Cannabis-infused Wines segment accounted for the largest market growth and contributed more than 32.7% of the total revenue share in 2024,
• Based on Components, the Tetrahydrocannabinol (THC) segment revealed the most significant market growth and contributed more than 51.6% of the total revenue share in 2024,
• Based on End Use, the Households segment accounted for the potential market growth with more than 32.4% of the total revenue share in 2024,

Economic Insights

The growth of the Cannabis-based Alcoholic Beverages market has resulted in job creation, particularly in the cannabis cultivation, processing, and distribution sectors. This has had a positive impact on the local economies where these businesses operate. Governments have recognized the potential economic benefits of legalizing Cannabis-based Alcoholic Beverages. Tax revenues generated from the sale of these products can help support various public services and infrastructure development. Cultivation of cannabis plants is a key component of the supply chain for Cannabis-based Alcoholic Beverages. Regulations around cultivation practices and licenses vary across different regions, affecting the availability and cost of cannabis ingredients. Once cannabis plants are harvested, they need to be processed to extract the desired compounds, such as THC and CBD, for use in alcoholic beverages. Regulations around processing methods, quality control, and product testing impact the efficiency and safety of the supply chain.

Top Market Trends

1. Social Acceptance and Reduced Stigma: As cannabis becomes more socially accepted, the stigma surrounding the plant and its consumption is gradually diminishing. This shift in attitudes is driving consumers to openly explore cannabis-based products, including alcoholic beverages. Increased social acceptance encourages individuals who may have been reluctant to try cannabis products to experiment with cannabis-infused alcoholic drinks and contribute to the growth of this emerging market. According to NIH, social acceptability ratings for cannabis use were higher for women who reported anxiety or acute pain than for women who did not endorse those conditions. Women found cannabis use to be more socially acceptable than cigarette, e-cigarette, and other tobacco use.
2. Tourism and Experiential Value: Cannabis-based Alcoholic Beverages offer a unique selling proposition for tourist destinations where cannabis is legal. Cannabis tourism has gained momentum in regions like California, Colorado, and Canada, where enthusiasts and curious travelers seek to experience both the cannabis culture and the local alcoholic beverage scene. This overlap of offerings creates a symbiotic relationship, driving growth in the Cannabis-based Alcoholic Beverages market within these regions. For instance, Amsterdam is widely considered the cannabis capital of the world. The city is famous for its coffee shops, which are licensed to sell small amounts of cannabis. Tourists can visit famous coffee shops like The Bulldog, Green House, and Barney’s, which offer a range of cannabis products. Similarly, Denver was one of the first cities in the United States to legalize cannabis for recreational use. The city is home to a thriving cannabis industry, with many dispensaries selling a range of products. Visitors can take guided tours of dispensaries, learn about the cultivation process, and even take cooking classes that teach how to infuse cannabis into food.

Market Segmentation

The global Cannabis-based Alcoholic Beverages market can be categorized based on the following factors: Product, Component, End Use, and Region. Based on Product, the market can be segmented into Cannabis-infused Beers, Cannabis-infused Infused Vodka, Cannabis-Infused Gin, Cannabis-infused Wines, and Other Products. Furthermore, based on Component, the market is sub-segmented into Cannabidiol (CBD) and Tetrahydrocannabinol (THC). Similarly, on the basis of End Use, the market is categorized into Households, Restaurants, Hotels, and Cafes. In terms of Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Product

Cannabis-infused Wines Dominate the Market Owing to the Increasing Legalization of Cannabis in Various Countries and States

The Cannabis-infused Wines segment has experienced remarkable growth within the Cannabis-based Alcoholic Beverages market in 2024. The increasing legalization of cannabis in various countries and states has created a favorable environment for the development and sale of cannabis-based products, including alcoholic beverages. This has led to a surge in the number of companies and brands entering the market and offering innovative products such as cannabis-infused wines.

Based on Component

Tetrahydrocannabinol (THC) to Witness Significant Growth Owing to its Perceived Health Benefits and Unique Sensory Experiences

Tetrahydrocannabinol (THC) segment is anticipated to have substantial growth in the market in 2024. The perceived health benefits and unique sensory experiences associated with Cannabis-based Alcoholic Beverages have attracted a diverse consumer base. THC-infused beverages are believed to offer a range of potential benefits, including relaxation, stress reduction, and pain relief. This has particularly resonated with consumers seeking alternative ways to consume cannabis instead of smoking or vaping.

Based on End Use

Household to Dominate the Market Growth Owing to the Potential Health Benefits Associated with Cannabis

Household application accounted for the most significant growth of the market in 2024. The potential health benefits associated with cannabis have also contributed to the popularity of these beverages. Cannabidiol (CBD), a non-intoxicating compound found in cannabis, is believed to have various therapeutic properties, including pain relief, relaxation, and anxiety reduction. CBD-infused alcoholic drinks are sought after by individuals looking for a potentially healthier alternative to traditional alcohol. This demand for wellness-focused products has played a role in the growth of Cannabis-based Alcoholic Beverages in household applications.

Based on Region

North America Holds a Prominent Market Share Due to its Legalization and Regulatory Framework

In 2024, North America held a significant market share in the global Cannabis-based Alcoholic Beverages market. The gradual legalization of recreational cannabis across North American jurisdictions has been a major catalyst for the growth of the market. With legalized cannabis in both Canada and various U.S. states, entrepreneurs and companies have been able to operate within clear regulatory frameworks, fostering innovation and product development. Certain states, such as California, have further eased regulations by allowing licenses for the production and sale of both cannabis and alcoholic beverages.

Competitive Landscape

Players in the industry are responsible for establishing distribution networks to ensure their products reach retail stores and consumers. This includes entering into partnerships with distributors, negotiating contracts, and managing logistics to efficiently deliver products to the market. For instance, Constellation Brands, the third-largest beer manufacturer in the U.S., entered into a partnership with Canopy Growth - the world’s largest marijuana grower, to develop cannabis-infused beverages. In addition, the combination of cannabis and alcohol introduces complex regulatory requirements that players in this industry must navigate. They need to stay updated on changing regulations, ensure compliance with marketing and labeling restrictions, and work closely with regulatory bodies to address any concerns or issues that arise.

Recent Market Developments

• May 2023: Naka launched a new all-natural CBD water drink as an alternative to alcoholic drinks. New launched "Naka Moonlight" drink contains 30mg equivalent CBD per can which help in reducing alcohol consumption and also help in relaxation.
• September 2022: Legacy Distribution Group Acquired Direct Store Distribution (DSD) Operation from New Age Beverage and NABC Properties.
• November 2022: Ablis launched new potency of its CBD beverages and shooters in all drinks with doubling CBD isolates in each beverage. Ablis created a CBD drink with all-natural ingredients and high-quality products and made from 100% pure hemp CBD isolate.
• April 2022: PepsiCo-owned brand Rockstar Energy launched a line of hemp-infused drinks in Germany. Infused with hemp seed oil, spearmint, lemon balm, and only about 80 milligrams of caffeine, Pepsi is hoping to attract younger, female consumers and men between the ages of 18 and 34 years.

Segmentation of the Global Cannabis-based Alcoholic Beverages Market