The CBD-Infused Drink industry is Set to Explode, But Hurdles Remain

Cannabis consumers who have waited for more CBD-infused drinks to enter the market may soon find the wait is over. However, while consumer demand is high, companies still face the obstacle of navigating an increasingly Byzantine series of laws governing their sale and use.

Still, optimism is high. Despite issues with regulations, NASDAQ recently published an article predicting a $1.4 billion CBD-infused drink market by 2023. It’s an area of the cannabis industry that is attracting big-name companies.

For example, PepsiCo recently announced plans to release a beverage infused with hemp seeds through its Rockstar Energy brand. PepsiCo hopes the product will “draw in younger, female consumers to the energy drink category,” according to CNBC. Currently, men between the ages of 18 and 34 consume the most energy drinks.

The Big Players in the Cannabis-Infused Drink Market

CBD is a cannabis product derived from hemp that does not contain THC, the chemical component in marijuana that causes the high. The U.S. Congress made hemp legal in 2018. Much of the surge in popularity for CBD products is driven by proponents who report that these products achieve a calming effect for users.

Numerous studies also have found that CBD provides health benefits. Studies have found that CBD has potential benefits in a variety of areas, including combating anxiety and depression, improving sleep and weight loss. Other studies have found potential in CBD to treat post-traumatic stress disorder.

“As consumer acceptance of CBD grows and more concrete findings on its health and wellness benefits are discovered, adding CBD to consumable products may make it easier for consumers to incorporate it into their lifestyles to reap those benefits,” according to NASDAQ.

In addition to PepsiCo, other companies that have announced intentions to put cannabis-infused drinks and CBD-infused drinks on the market – or, in some cases, have already done so. They include Anheuser-Busch InBev (in a partnership with Labatt), Molson Coors, Heineken, Alkaline Water Company, Canopy Growth Corporation and New Age Beverages Corp.

Federal Regulation Issues Remain

While legal in 18 states for recreational use and in 37 for medical use, cannabis that contains THC remains illegal at the federal level. That’s why CBD, which comes from hemp, has become a popular choice for infused products. While hemp is a type of cannabis plant, CBD taken from it provides health benefits while not containing THC.

In its new hemp seed-infused drink, PepsiCo remained very careful, using hemp seeds that contain very little CBD and no THC. That’s because it is still illegal to sell CBD products across state lines. That keeps “large players like Pepsi and its rival Coca-Cola out of the fray” when it comes to products infused with CBD, according to CNBC.

Part of the reason why consumers have not seen more cannabis-infused drinks and other products is because of a “regulatory minefield,” according to National Law Review. “While it is true that certain investors are seeing green in the CBD beverage market, the space is still plagued by a landmine of legal uncertainty and questions.”

That’s partly because the Federal Drug Administration and the Federal Trade Commission have overlapping enforcement authority on CBD. Also, the FDA recently said it needs more scientific study before approving the use of CBD products outside of prescription drugs. Taken in combination, these positions taken by the federal government make creating CBD-infused drink products more difficult, despite the fact consumers clearly want them.

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