2021 May Be the Year for Cannabis-Infused Foods and Drinks

But several hurdles remain before cannabis is legal nationwide.

January 21, 2021

ALEXANDRIA, Va.—Cannabis products were expected to be big in 2020, but that didn’t happen. 
The pandemic slowed down product development, and federal regulation remained in a gray area, with no official guidance and many questions unanswered.   

But now analysts and companies are saying that 2021 could be year cannabis breaks out, reports FoodDive.com. The last election cycle saw more states legalize cannabis, and a new presidential administration arrives with a Democrat-controlled Congress that could push the U.S. Food and Drug Administration to issue a federal regulatory framework. 

“We’re seeing legalization spread to markets that were a challenge for cannabis activists in the past ... so I expect that to continue in the coming year,” said Alex Esposito, research analyst at Euromonitor International. “As more recreational markets come online, we generally expect there to be more availability of edible and beverage formats.”

More companies are moving into the U.S. market with products that contain CBD, the popular non-psychoactive compound of the cannabis and hemp plants, and THC, the best-known psychoactive component. Several Canadian companies are entering the U.S. market through acquisitions and plan to shake up the category.

“The U.S. is expected to be the largest market opportunity globally, and we will be ready and well positioned to compete in the U.S. when cannabis is federally permissible,” said Irwin Simon, chairman and CEO of Aphria, a Canadian cannabis company that is entering the U.S. market through a brewery acquisition. 

There are many moving pieces in the regulatory space when it comes to cannabis and CBD, from state legalization and legislation to FDA regulation. The 2018 Farm Bill removed hemp-derived products from Schedule I status under the Controlled Substances Act. However, federal law still prohibits the addition of cannabis and its derivatives to food and drink. Product manufacturers are pushing for more clarity.

“I hope that this is finally the year that the FDA creates some guidance,” said Henry Baskerville of Fortis Law Partners. “In a way, it’s really harming the industry to have no guardrails, because for a lot of reasons, it makes it so that consumers are maybe more reluctant to try the products than they otherwise would if they were at least passively accepted by the FDA.”

Jeremy Kahn, FDA spokesperson, said that the agency is “working toward a goal of providing additional guidance and has made substantial progress.” The FDA is looking at potential ways for various CBD products to be lawfully marketed and is working to get research, data and other safety input to inform its approach, he added.

“The FDA recognizes that there is substantial public interest in marketing and accessing CBD for a variety of products,” Kahn said. “There are many questions to explore regarding the science, safety, effectiveness and quality of products containing CBD, and we need to do our due diligence.”

​One step in that direction happened in December, when the House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement Act, which seeks to decriminalize marijuana nationwide and remove it from the government’s Schedule I controlled substance list.

With the new Congress, the act would need to be reintroduced, passed again in the House and go to the Senate. However, the FDA would still determine regulation for the inclusion of cannabis in food and drink. 

Mike Gruber, vice president of regulatory and government affairs at the Consumer Brands Association, believes the marketplace needs stability.

"I think there's a pivot point here for 2021 for all stakeholders to get behind legislation that provides FDA additional authority and additional funding to create a durable, national standard for CBD and other hemp derivatives that may be used in food, beverages, topicals and other products," he said. 

Despite the patchwork of state regulations for cannabis, "it's only a matter of time before it gets federally legalized," said Tyler Williams, chief technical officer and founder at Cannabis Safety & Quality.

Euromonitor forecasts the U.S. market for adult-use cannabis, including in beverages and edibles, will grow from about $11.5 billion in 2020 to $53.6 billion in 2025.