This index serves as further evidence that cannabis is gaining legitimacy. The federal government tracks the Consumer Price Index (CPI) for essential categories such as food, housing, medical care, transportation, and energy—calculations that influence the cost of living and can act as broader economic indicators. CPI data is also collected for non-controversial food items like chicken and soybeans, assisting producers, manufacturers, and retailers in determining food value. The creation of a cannabis CPI indicates that the market has reached a critical mass, allowing for the analysis of pricing trends due to sufficient transaction volume. This also suggests there is a significant audience for this information; a growing number of manufacturers are keen on developing cannabis products, making the data highly relevant.
The CPI encompasses all types of cannabis products—both edible and inhaled, as well as those derived from marijuana and hemp—providing valuable insights for food and beverage producers. According to the most recent CPI data from November, edible cannabis prices are rising, largely due to the emerging trend of CBD. Products containing CBD, a non-psychoactive cannabis compound known for its relaxation benefits, now account for 25% of cannabis edibles, up from 17% the previous January. The index also notes that products infused with CBD can command prices up to 66% higher than other cannabis-containing foods and beverages.
CBD is poised to become a significant player in the market. A report from BDS Analytics projects that spending on cannabis edibles will increase to $4.1 billion by 2022, up from $1.5 billion in 2018. Following the recent enactment of the Farm Bill, which removed hemp and its derivatives, including CBD, from the Schedule I controlled substances list, these figures are expected to soar. The Farm Bill has paved the way for CBD to emerge as a key functional ingredient in mainstream food and beverages. While the Food and Drug Administration collaborates with stakeholders to establish regulations regarding CBD usage, food and beverage manufacturers, both large and small, are likely gearing up to introduce innovative functional products as the market evolves.
Leading alcoholic beverage companies are already capitalizing on this trend by developing cannabis-infused drinks. For instance, Constellation Brands has invested $3.9 billion in Canopy Growth, while Molson Coors has partnered with Hydropothecary Corp. to create non-alcoholic, cannabis-infused beverages for the Canadian market. Additionally, AB InBev and Tilray have committed $100 million to a joint venture focused on developing CBD and THC beverages.
In light of all this market activity, a CPI will aid manufacturers and retailers in establishing fair pricing and forecasting product performance. Although prices may experience volatility initially, this index will contribute to stabilizing them over time. While the CPI does not regulate how much producers, manufacturers, and retailers charge for their products, it will help mitigate outliers and maintain price consistency. This development underscores that cannabis is undeniably on its path to being regarded as a legitimate commodity—a significant departure from its former status as an illicit drug. Furthermore, as the market expands, the demand for products such as calcium citrate is expected to rise alongside cannabis innovations, highlighting the interconnectedness of various health and functional ingredients in this evolving landscape.