Health Conscious Consumers Have Sparked the Creation of a $600 Million Dollar Industry

J. Frank Sigerson  |

The cannabis sector is already having huge ramifications for other sectors. It is already a formidable player in the health and wellness sector as its medical benefits continue to draw the attention of consumers worldwide but it has also had effects on some unexpected industries. The beverage sector, in particular, has already seen a wave of innovation in the wake of Canadian legalization.

Citing Canaccord Genuity, Business Insider said that the revenue from cannabis beverages could outperform the general demand for cannabis products by acquiring 20 percent of the market by 2022. More specifically, the cannabidiol (CBD)-infused beverage market will be worth $260 million while the tetrahydrocannabinol (THC)-infused beverage market will be worth $340 million.

An Increasingly Important Sector

One of the biggest names that joined the growing roster of cannabis-infused drinks is Heineken's Lagunitas brand ( (HEINY)). Earlier this year, the company launched THC and CBD-infused sparkling water under the name HiFi Hops.

Another name, Recess, remains to be the said leader in the cannabis-infused beverage market. Recess founder Benjamin Witte said. “Consuming CBD through oils, gummies, or tinctures isn’t ideal for daily life. There was a massive opportunity to bring CBD and adaptogens to new product formats, primarily functional beverages.” This could be one of the reasons why beverages are gaining traction in leading stores nationwide.

The Recess line of sparkling water has met success. It comes in several fruit flavors such as peach and pomegranate citrus, and they contain 10 milligrams of CBD. With each can selling for $4.99 each, Recess has made it more affordable and easier for people to incorporate the wonders of CBD into their lives.

Bottled Water Companies Have a Built-In Consumer Base

Nevertheless, consumer trends are rapidly changing. Bottled water has performed incredibly well. According to a recent study, bottled water consumption reached 418 billion liters in 2017, which is 92 percent higher than it was ten years ago in 2007. In comparison, soft drink consumption only grew by 24 percent for the same period.

This is where premium bottled water like Alkaline88 from The Alkaline Water Co. ( (WTER)) (WTER:CNX) are interesting. Not just your average product, Alkaline88 is developing hemp-derived and CBD-infused products. The retailer has already made a name for itself with health-conscious consumers Alkaline88 can be purchased in over 47,500 retailers in the U.S. and is the top product in the beverage section in 39 of the 50 best grocers in the country. Their loyal customer base is the perfect market for a healthy CBD product that doesn’t require them to inhale vaporizers or pop pills.

Chairman Aaron Keay has this to say about the company’s recent quarterly revenue report: “The Alkaline Water Company Inc. is one of the fastest-growing, most innovative bottled water companies in the United States, and is building a loyal following both amongst consumers and retail partners. Our customers love us for our great taste and clean label, and retailers appreciate our scalability, economics, and bulk sizes."

"We are positioned with the right product at the right time in the right market, and we have achieved our current success relying only on word-of-mouth marketing. As we enter new markets in flavor- and CBD-infused alkaline water and other nutraceutical product lines, I am confident that we have the branding, operational expertise, and entrepreneurial vision to achieve the same growth trajectory we have seen in the alkaline water market,” he adds.

Indeed, CBD-infused drinks represent a market with incredible potential. If investors are looking for companies that will succeed they should focus on beverage companies that already have a large body health-conscious consumers. Premium bottled water providers, like The Alkaline Water Co. already target these consumers and will be able to leverage their brand name to encourage them to try CBD-infused beverages, sparking the rise of an entirely new sector.

DISCLOSURE: I don't have any financial interests or connection with any of the companies mentioned in this article.


The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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