A Tale of Two Markets: The Rise of Cannabis Seltzers in the USA vs. Canada

The hottest new beverage with a refreshing twist, cannabis seltzers have made a splash in the United States and Canada. However, while the U.S. appears to be embracing cannabis seltzers with growing enthusiasm, the Canadian market is moving at a slower pace. 

In large part, this difference can be attributed to the varying regulations and consumer preferences in both countries. 

The Cannabis Seltzer Boom in the USA

In the United States, cannabis seltzers are becoming a fast-growing sector within the broader cannabis beverage market. In 2023, the U.S. cannabis beverage market was valued at over $645 million, with seltzers showing notable growth. Some analysts predict this market could grow at a compound annual growth rate (CAGR) of around 15% through 2028. 

One key factor behind the rise of hemp drinks in the U.S. is their legality and accessibility nationwide. Additionally, restrictions across the country tend to be more flexible when it comes to the potency of hemp-infused beverages. 

There’s also been a growing interest among people, especially younger generations, who are seeking alternatives to alcohol. Millennials and Gen Z make up a significant portion of cannabis beverage consumers, and their interest in healthier lifestyle choices is evident in the growing popularity of these products.

The Cannabis Seltzer Market in Canada

By contrast, the Canadian market for cannabis seltzers has been slower to develop. As of 2022, the Canadian cannabis beverage market was valued at about CAD 80 million, significantly smaller than its U.S. counterpart. 

In Canada, the federal government limits cannabis beverages to a maximum of 10 mg of THC per package, regardless of serving size. This cap may limit product innovation and consumer appeal, particularly when compared to the more flexible U.S. regulations. Additionally, cannabis beverage advertising is highly restricted in Canada, making it difficult for brands to promote their products in the same way U.S. companies can.

Consumer preferences in Canada may also be a factor. While cannabis beverages are available, they make up only a small percentage of total cannabis sales. In 2023, cannabis beverages accounted for just 3% of the Canadian cannabis market, compared to more popular products like flowers and edibles. It seems that Canadians are conservative in their product choices, preferring traditional methods of consumption over newer options like seltzers.

Competitive Landscape and Innovation

The competitive landscape in both countries also reflects regulatory and consumer differences. In the U.S., partnerships between cannabis brands and alcohol companies are common, allowing cannabis seltzers to leverage well-established distribution networks. This strategy might explain why major brands like Lagunitas and Pabst have gained traction relatively quickly in the cannabis beverage space.

Innovation has been more cautious in Canada, though there are signs of change. Brands focus on health-conscious options with lower sugar content and more natural ingredients. The future of Canada’s cannabis seltzer market may depend on regulatory changes and consumer education, as many Canadians remain unaware of these products’ potential.

The Future of Cannabis Beverages

The future of cannabis seltzers in both the U.S. and Canada seems promising but uncertain due to constantly shifting regulations around both country’s cannabis products. 

Capitalizing on its momentum, it’s likely the United States cannabis beverage market will continue to boom. The Canadian cannabis beverage market is poised for significant growth, as soon as it’s able to harness innovation and consumer interest in healthier alcohol alternatives.