Cannabis Insight: Consumer Perceptions and

the Innovation HorizonCannabis continues to be a category poised for growth in the food

and beverage industry with consumers projected to spend $3 billion

on cannabis infused products in 2020. In the time of the COVID-19

pandemic and recovery, consumers have sought solace in cannabis

edibles and CBD products to quell their anxiety and find relief. In

this report, we share details from a proprietary FONA survey into

the drivers and preferences of the cannabis consumer. Our research

shows that consumers desire high quality, reliable cannabis products

that taste exceptional. And with new markets emerging in Illinois

and Michigan, cannabis infused treats are primed for innovation.

From ultra-low doses to CBD dalgona coffee to cinnamon-sugar

dusted chocolate bars, let’s dive into cannabis, currently.

Cannabis, Currently

In 2019 the global cannabis industry generated an estimated $14.9 billion, up

nearly 46% from 2018, which saw just 17% growth to $10.2 billion. In the U.S.

alone, consumers are projected to spend nearly $3 billion on cannabis

infused products in 2020, says New Frontier Data. A majority of U.S. growth

will come from recreational markets in newly legalized states like Michigan and Illinois,

and new medical markets in unexpected states like Missouri and Arkansas—but growth

won’t stop there. Voters and lawmakers could potentially approve recreational markets

in New York, New Jersey, Pennsylvania, Rhode Island and other states in the coming

months.

EDIBLES U.S. 2020 GROWTH PROJECTIONS

BAKED GOODS: Annual growth of 14%, reaching $748.1 million

BEVERAGES: Annual growth of 15%, reaching $587.8 million

CONFECTIONS: Annual growth of 16%, reaching $2.2 billion

Covid-19 & Cannabis

COVID-19 has naturally affected every market in

2020, and the cannabis market is no different. Edibles

sales skyrocketed in the U.S. amidst nationwide stay

at home orders—in the week of March 9-15, 2020,

edibles sales were up 10.6%.

Digging into the market drivers, it’s no surprise that

edibles use surged Spring 2020. Two of the top

reasons for cannabis use is stress reduction and

anxiety relief—two emotions that have swept the

nation during the COVID-19 pandemic. In fact, 75%

of US consumers who live in legal states and who

use cannabis say they use it to relax.

PRODUCTS OF NOTE:

CODA SIGNATURE COFFEE & DOUGHNUTS MILK CHOCOLATE BAR

Contains 30g THC per serving and is described

to taste like coffee, creamy milk chocolate,

toasted milk, and is said to be euphoric and

relaxing.

EFEX CHILL SOUR WATERMELON GUMMIES

A 3:1 THC-to-CBD hybrid, each gummy con-

tains 10mg THC and 3.3mg of CBD for a calm,

happy buzz in both body and mind.

Images Sourced: A Proper High

Consumer PerceptionsIn February 2020, FONA launched our CBD Edibles and Beverages Innovation Horizon Consumer Survey, a nationwide survey of

current CBD users or consumers interested in trying CBD products. Below are a few top takeaways.

From Baby Boomers to Generation Z, consumers prefer

product portfolios to contain between 4 to 6 flavors.

Consumers crave flavor options when purchasing CBD

products, and don’t want to be limited to just one or two

choices. This indicates that LTO’s and seasonal flavors are

ready for innovation!

Incredibles Blueberry Bliss White Chocolate Bar

is a baby blue hued 100mg THC-infused seasonal

chocolate bar studded with blueberries and crispy

rice. (Image Source: Incredibles)

Consumer expectations for clean cannabis products mirror

what we see in food and beverage categories. Most important

claims ranked by consumers in our survey:

• Contains Nothing Artificial – 25% • Organic – 21%

• Non-GMO – 16% • Sugar-Free – 15%

• Portion Controlled – 13%

Fruit Slabs Tropical Haze Fruit Strips is fruit

leather with 10mg THC per serving and is made

with organic ingredients, contains no added

sugar, is gluten free, and vegan.

According to Mintel data, consumer trust is two-fold: the

quality (taste and ingredients) and the safety (effects) of a

product both matter. From child-safe packaging to reliable

THC-content labeling, these measures help ensure canna-

bis-enhanced products are consumed safely—and it’s key to

building consumer trust and positive brand association. In fact,

38% of consumers would be more willing to pay for a product

they trust, and 32% would trust a product from a mainstream

brand they’re familiar with.

Source: Mintel

MORE FLAVORS, PLEASE!

TRUST + SAFETY

CANNABIS + CLEAN

Robert Arabian, founder of Pop-Up Potcorn

Consumers make similar choices when they’re

shopping for cannabis as they do when they’re

shopping for food, so people who have made

organic and GMO-free an important part of

their life will continue to look for those

products in cannabis as well.

Strawberry

Sour Watermelon

Peach

Citrus

Chocolate

Lemon

Raspberry

Mango

Dark Chocolate Sea Salt

Pineapple & Coconut

Blue Raspberry

Wildberry

Blackberry

Marionberry

Peach Mango

Huckleberry

Pineapple Habanero

Blueberry

Peppermint

Strawberry Kiwi

Popular Flavors in Cannabis Infused Food

Berry

Fruit Punch

Pineapple

Orange Soda

Root Beer

Watermelon

Cranberry Lime

Berry Lemonade

Cola

Chamomile Tea

Hops

Matcha

Pineapple Mango

Pink Lemonade

Orange Mango

Apple Cider

Hibiscus

Grape Soda

Cherry Limeade

Orange Cream Pie

Top Flavors in Cannabis Infused Drink

Source: Headset - April -May 2020 Data

CBD Craze

The CBD market will reach $2.1 billion in 2020, and according to our

CBD Edibles and Beverages Innovation Horizon Consumer Survey, 43% of

US consumers have either tried or are interested in trying food and drink

that contains CBD as a functional ingredient. The functional benefits of

CBD, like pain relief, anti-inflammatory activity, anxiety reduction, and

beauty enhancement have attracted a lot of attention in the last few years.

PRODUCTS OF NOTE:

WYLD CANNABIS INFUSED PEACH GUMMIES

A 2:1 CBD and THC hybrid gummy containing

5mg of CBD and 2.5mg THC per serving. They are

described as having a citrus-sweet flavor with a

relaxing affect that brings relief.

CBD LIVING INSTANT COFFEE

Delivers 7mg of CBD per serving, and comes in three

flavors: Black Coffee, Golden Milk Coffee, and Matcha

Coffee. The product launched in April 2020—just in time

for the wildly popular dalgona coffee trend you’ve been

seeing all over your social media.

Three years ago, there was essentially no one searching about CBD online, but now there are an estimated 6.4 million unique searches each month.

-Dr. John W. Ayers, co-author of UC San Diego’s Cannabis Study and Vice Chief of Innovation at the University of California

Image Source: A Proper High Image Source: Trend Hunter

Infused Eats, Treats and Drinks Trends

Edibles spending in the U.S. and Canada

topped $1 billion in 2017 and is forecasted to

grow to more than $4.1 billion by 2022. Let’s

explore some trends we’ve spotted in cannabis

infused foods and drinks.

CANDY AND CHOCOLATE REIGNSWhen it comes to edibles, consumers have a

sweet tooth. 58% of cannabis users are

interested in trying or purchasing cannabis

infused chocolate, and 47% are interested in

sugar confectionery edibles.

NEED FOR SPEED: FAST-ACTING EDIBLESOne of consumers’ top concerns with

cannabis edibles is the time it takes to start

feeling the effects. After consumption,

products may take up to two hours to produce

effects, and in some cases the effects may

linger for up to six hours. This can often lead

to over-consumption and misdosing. Fast-

acting edibles often only take 10-15 minutes

to feel effects, and most only last about two

hours, making it easier for consumers to pace

themselves and avoid misdosing.

Image Source: A Proper High Image Source: Trend Hunter Image Source: Spherex

PHYX SPARKLING WATER

Comes in lime, grapefruit, and

dragonfruit flavors and claims

effects can be felt in minutes and

only last about an hour.

KIVA CHURRO CANNABIS INFUSED MILK CHOCOLATE BAR

Contains 100mg THC and is dusted

in cinnamon sugar, claiming to taste

like a golden, fried churro dipped in

delicious hot chocolate.

WANA QUICK FAST-ACTING GUMMIES

Available in cocktail-inspired

flavors and have an onset of 5-15

minutes with effects lasting up to

three hours.

Infused Eats, Treats and Drinks Trends CONT'D

SMALL DOSESAs recreational cannabis legalization

continues, more and more consumers will be

exploring edibles and potentially

encountering a common problem for new

cannabis users: overdosing. This often occurs

because of the delayed sensations and

effects edibles have. “The experience when

you eat too many edibles really isn’t pleasant.

It’s pretty intense,” said Niccolo Aieta,

founder and chief technology officer for

Spherex. “These canna-curious consumers

don’t really know enough. They don’t want

something that will knock them out or that

tastes really bad. They want something that

tastes great and makes them feel better.”

So what dose is best? One survey conducted

by Canadian-based Organigram suggests

5mg; and Mintel found that 33% of edibles

consumers prefer low-dose products

containing less than 10mg of THC per serving.

FLAVOR CAN'T BE OUTDOSEDConsumers interested in cannabis infused

food and drink may have more adventurous

palates—and therefore care about taste more

than anything else. 47% of consumers

interested in cannabis infused edibles reported

that they were generally interested in trying

new foods and drinks, and when ranking

attributes of importance in edibles,

consumers ranked taste (45%) as more

important than dosage (37%).

Images Sourced: A Proper High

PLATINUM COCOA BANANA CREAM PIE GUMMY COINS

Covered with cookie crumbs and

deliver 5mg THC per serving.

CANN GRAPEFRUIT ROSEMARY SOCIAL TONIC

A cannabis-infused seltzer water with

2mg of THC and 4mg of CBD. It is said

to have a crisp flavor of citrus and a light

herbal aftertaste with a relaxing and

uplifting social effect.

MELLOWS COOKIES N' CREAM MARSHMALLOWS

Contain 4mg THC per serving and

claims the high is intended to be

calm and unwound..

THE TAKEAWAYSConsumers want safe, high quality edibles options, and they expect them to

taste great. In fact, consumers ranked taste in cannabis as even more important

than dosage. With the impacts and future restrictions of COVID-19 still

unknown, consumers will continue to seek cannabis as a natural way to unwind

and relax. And with new markets opening up as more states legalize recreational

use, brands should consider experimenting with new and exciting seasonal

flavors or expanding a product portfolio to include at least 4 four flavors to meet

consumers’ preference for more—not less— when it comes to edibles and flavor.

Let’s help you get started in this space.

What does true partnership look like? You deserve a flavor partner ready to turn these

trends into the tangible.

Let FONA’s market insight and research experts get to work for you. Translate these

trends into bold new ideas for your brand. Increase market share and get to your

“what’s next.” Our technical flavor and product development experts are also at

your service to help meet the labeling and flavor profile needs for your products

to capitalize on this consumer trend. Let’s mesh the complexities of flavor with

your brand development, technical requirements and regulatory needs to deliver a

complete taste solution.

From concept to manufacturing, we’re here for you — every step of the way. Contact

our sales service department at 630.578.8600 to request a flavor sample or chat us

up at www.fona.com/contact-fona/

SOURCES

• Candy Industry

• BDSA

• Prepared Foods

• MJ Biz Magazine

• Beverage Daily

• Mintel

• Ganjapreneur

• LA Times

• Headset

• Businesswire

• Kikoko

• Leaflink List

• Forbes

• A Proper High

• Trend Hunter

• Kiva Confections

You Deserve More. Let's Get Started.

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