Edibles Sales Projected to Surpass $4.1 Billion by 2022, According to New Report

Edibles Sales Projected to Surpass $4.1 Billion by 2022, According to New Report

A report from Arcview Market Research and BDS Analytics says the growth will be driven by strategies and participation from the consumer-packaged goods industry.

Subscribe
October 16, 2018

Edibles sales in the U.S. and Canada are on pace to reach more than $4.1 billion by 2022, and with consumer-packaged goods giants making sizable investments in cannabis companies—such as Constellation Brands’ multi-billion dollar investment in Canada’s Canopy Growth Corp.—the category’s potential could exceed expectations, according to a new report released by Arcview Market Research in partnership with BDS Analytics.

By employing naming, branding and product development strategies already common in the consumer-packaged goods industry, cannabis edibles companies are quickly gaining market share and helping to normalize cannabis, the report says. As the cannabis industry matures, consumers will want more than smokables—a 2017 survey conducted by BDS Analytics’ Consumer Insights group showed that 64 percent of consumers in Colorado’s adult-use market had used edibles in the past six months, just behind inhalation at 81 percent. A similar survey conducted in California during that timeframe had similar results, with 55 percent of consumers using edibles and 88 percent using inhalation.

And edible products are worth watching over the next five years, when legal cannabis markets in the U.S. and Canada will be the incubators of this category, the report adds.

Edibles spending in U.S. and Canadian markets reached $1 billion in 2017, according to the report, and the category will continue to grow, reaching $1.5 billion in 2018, $2.2 billion in 2019, $2.8 billion in 2020, $3.5 billion in 2021 and eventually topping $4.1 billion in sales in 2022.

“Consumers in front-running adult-use markets in the U.S. have significantly shifted their spending over recent years to other categories of cannabis consumables, especially concentrates and edibles,” the report reads. “That trend will continue over the next five years, with flower’s share of total spending dropping from 50 percent in 2017 to just 36 percent in 2022. Edibles will grow from 12 percent to 14 percent in that time frame, and concentrates is expected to swell from 23 percent to 36 percent.”

Overall, the edibles category presents an early opportunity for investment in a sector that is brand-focused, well-understood and growing quickly, the report says. “The brands being built today will be the edibles powerhouses of tomorrow, and they’ll be very attractive acquisition targets when the attention of the multi-billion-dollar mainstream food and beverage industry shifts to possibilities offered by legal cannabis—and it will, especially with national legalization in Canada and continued movement in that direction in the U.S.”

Top Image: © fudio | Adobe Stock