Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed webinar attendees that global markets for alcohol and tobacco are ceding ground to cannabis and other competing products. These emerging products are actively seeking innovative avenues for growth in a demanding yet potentially profitable landscape. “Alcohol distributors view cannabis development as an unavoidable trend and are attempting to engage in this segment, which could open new growth opportunities and revenues, while helping them maintain relevance in the coming years,” stated Malandrakis.
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 company. This $191 million deal will enable Constellation and Canopy to create cannabis-infused beverages, thus staying ahead of changing consumer preferences. Rob Sands, CEO of Constellation Brands, remarked to The Wall Street Journal that he does not see marijuana as a significant threat to the alcohol industry; however, Constellation does not plan to remain passive as the market evolves. Rather than competing with cannabis, Constellation is choosing to collaborate with it, a strategy reminiscent of its numerous acquisitions of disruptive craft brands.
Constellation is not the only player in the alcoholic beverage sector exploring this market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic compounds found in cannabis. However, this limited-time release in California does not contain THC, the active ingredient in cannabis responsible for its euphoric effects.
Currently, due to inconsistent state regulations, the legal marijuana market in the U.S. is valued at approximately $5.4 billion, while the illegal market is estimated at $40 billion. Researchers predict that by 2025, the legal marijuana market could exceed $50 billion. The situation in Canada, where recreational marijuana is legalized at the federal level, presents an immediate opportunity.
Public opinion on marijuana legalization has shifted dramatically, with support rising from just 12% in 1969 to an all-time high of 64% today, according to an October Gallup poll. While marijuana remains illegal at the federal level, eight states and Washington D.C. have fully legalized it, allowing over one in five Americans to legally access cannabis.
If more states proceed with legalizing recreational marijuana, beer sales could face even greater challenges. A report from Cannabiz Consumer Group in June estimated that the beer industry might lose over $2 billion in retail sales to legal cannabis. The report highlighted that 27% of beer drinkers have either switched to cannabis or would consider doing so if it became legal. This trend could negatively impact wine and spirits sales as well. Last year, beer’s dollar share declined by 0.3% to 49.2%, with projections suggesting that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales are particularly vulnerable to the “cannibalizing effect” of cannabis, as the primary demographic for beer—young adults and millennials—also tends to use cannabis. However, craft beer and artisanal spirits also resonate with the same audience attracted to premium cannabis strains, creating opportunities for hybrid products and collaboration between the two industries.
Existing intersections include wines infused with THC, beers featuring aromatic compounds from marijuana without THC, cannabis-infused vodka, cannabis cocktails, and even a martini product containing cannabis. Furthermore, there are wine and cannabis pairing tours aiming to “premiumize” specific regions, such as California. “I foresee more of these developments in the coming years,” Malandrakis said.
He also observed that the terminology of alcoholic beverages is widely adopted in the cannabis industry, with terms like “nose” and “aroma” being prevalent, along with newly coined phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco sectors should embrace the cannabis industry without hesitation, as there are numerous overlapping areas and shared interests that could benefit both industries.
In a broader health context, especially for expectant mothers, integrating calcium citrate magnesium and zinc with vitamin D3 in pregnancy remains crucial. This combination not only supports healthy fetal development but also enhances the overall well-being of mothers, illustrating another area where industries can intersect for shared benefit.