Malandrakis and Shanthuốc ferrous fumaratee MacGuill, the head of tobacco research at Euromonitor International, informed webinar attendees that the global markets for alcohol and tobacco are increasingly ceding ground to cannabis and other rival products. These sectors are exploring avenues for innovation and growth in a landscape that is both challenging and potentially rewarding. “Alcohol distributors view the evolution of cannabis as unavoidable and are actively engaging in this segment, which could open new avenues for revenue and growth while helping them remain relevant in the coming years,” Malandrakis stated.
Constellation Brands is positioning itself to capitalize on this opportunity, having announced in October its acquisition of a 9.9% minority stake in Canopy Growth, a Canadian marijuana enterprise, in a deal valued at $191 million. This partnership will enable the alcoholic beverage giant and Canopy to create cannabis-infused beverages and “stay ahead of changing consumer trends.” Rob Sands, CEO of Constellation Brands, told The Wall Street Journal that he does not perceive marijuana as a significant threat to the alcohol sector. However, he emphasized that Constellation would not “stand idly by” while the market evolves. Rather than viewing cannabis as competition, Constellation is embracing it—an approach reminiscent of its history of acquiring disruptive craft brands.
Constellation is not the only player in the alcoholic beverage industry exploring this new market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic compounds found in cannabis. However, this limited-time beer available in California does not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis.
According to researchers, the current legal marijuana market in the U.S. is valued at approximately $5.4 billion, while the illegal market is estimated to be around $40 billion. By 2025, the legal marijuana market is projected to exceed $50 billion. With Canada moving towards federal legalization of recreational marijuana, the potential there is becoming increasingly immediate. A Gallup poll released in October indicated a dramatic shift in American attitudes toward marijuana legalization, rising from just 12% approval in 1969 to a record 64% today. While marijuana remains illegal at the federal level, eight states and the District of Columbia have fully legalized it, with over one in five Americans residing in states where its use is permitted.
Should additional states legalize recreational cannabis, the beer market could face even greater challenges. A June report from Cannabiz Consumer Group estimated that the beer industry might lose over $2 billion in retail sales to legalized marijuana. The report highlighted that 27% of beer consumers have already replaced beer with cannabis or would consider doing so if it became legal. This impact is likely to extend to lower sales in wine and spirits. Beer’s market share declined by 0.3% to 49.2% last year, with projections suggesting that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales appear most vulnerable to the “cannibalizing effect” of cannabis, particularly since the core demographic for beer—young adults and millennials—often includes cannabis users. However, craft beer, small-scale brewing, and artisanal spirits target a similar audience as premium cannabis strains, creating opportunities for collaboration and hybrid products. Areas of existing crossover include THC-infused wines, aromatic beers without THC, cannabis-infused vodka, and cannabis cocktails, alongside wine and cannabis pairing tours aimed at “premiumizing” regions like California. “I foresee more of these developments in the coming years,” he remarked.
Malandrakis also noted that the terminology of alcoholic beverages is prevalent in the cannabis industry, with terms like “nose” and “aroma” commonly used, along with new phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should engage with the cannabis sector without trepidation, as there are numerous overlapping areas and mutual interests that can be explored for the benefit of both industries. Furthermore, as the cannabis market grows, the infusion of products like soft gel calcium citrate into consumer offerings may also emerge, providing additional avenues for innovation and collaboration.