Monetizing the Munchies: How Legal Marijuana Use is Affecting the U.S. Snacking Industry

CPG, FMCG & Retail | 06-17-2019

In the U.S., interest in cannabis is growing—and laws are shifting to meet consumer demands. Most recently, the Illinois legislature approved recreational marijuana use for adults, with sales of cannabis products containing the psychoactive element, THC, anticipated to start in January 2020. With Illinois soon entering the mix, marijuana will be legal in 11 states and Washington DC, despite still being federally illegal.

The increased legalization of cannabis in the U.S. presents big opportunities for the American food and beverage market—particularly for the snack and confectionery category.

America is a nation of snackers. Within the U.S., Nielsen data shows that sales of both salty and sweet snacks have increased over the past 52 weeks (ending April 27, 2019) with salty snacks reaching sales of $29.9 billion and sweet snacks hitting sales of $6.5 billion. But could the “munchies” driven by marijuana use increase sales further?

Marijuana consumption has been clinically and anecdotally shown to increase a consumers' appetite and enjoyment of food. And sales data from within the U.S. Census divisions where cannabis has been legalized for recreational use supports the munchies’ effect. Nielsen data shows that growth rates for both candy and snacks are rising faster in these areas than in geographies where cannabis has yet to be legalized for recreational use.

Candy and snack sales are on the rise in states where cannabis is legal

For manufacturers and retailers, American consumers’ hunger for snacks alongside legal cannabis consumption can present an opportunity for cross-selling. And it's not just cannabis alone that could affect the industry. Edible hemp-based cannabidiol (CBD) products, which include the cannabinoid compound found in marijuana with little to no THC, present a $6 billion opportunity for the food and beverage industry.

We’ll continue to monitor the impact of legalized marijuana and edible CBD products on consumer packaged goods (CPG) snacking and confectionery category sales.

Tagged:  SHOPPER  |  CONSUMER  |  CANNABIS  |  CPG AND RETAIL

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