Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed webinar attendees that the global alcohol and tobacco markets are gradually losing ground to cannabis and other competing products. These emerging products are actively seeking innovative ways to grow in a challenging yet potentially lucrative environment. “Alcohol distributors view cannabis development as unavoidable and are eager to engage in this segment, which could open new avenues for growth and revenue, helping them to 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 cannabis company. This $191 million investment will enable the beverage giant and Canopy to develop cannabis-infused beverages and “stay ahead of evolving consumer trends.” Rob Sands, CEO of Constellation Brands, mentioned in an interview with The Wall Street Journal that he does not see marijuana as a significant threat to the alcohol sector; however, Constellation is not going to remain passive as the market expands. Rather than competing with cannabis, Constellation is opting to collaborate, following a strategy similar to its acquisitions of disruptive craft brands.
Constellation is not alone in exploring this new market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic compounds derived from the cannabis plant. This limited-edition beer, available only in California, does not contain tetrahydrocannabinol (THC), the chemical responsible for the cannabis high. Due to varying state regulations, the current 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 total legal marijuana market could surpass $50 billion. With Canada legalizing recreational marijuana at the federal level, the potential market there is more immediate.
Public opinion on marijuana legalization has evolved significantly, with approval rising from just 12% in 1969 to a record high of 64% today, according to an October Gallup poll. The firm noted that while marijuana remains illegal federally, eight states and the District of Columbia have fully legalized it, with over one in five Americans living in areas where its use is legal. Should more states legalize recreational marijuana, projections indicate that beer sales could face even greater challenges. A June report from Cannabiz Consumer Group estimated that the beer industry could lose over $2 billion in retail sales to legal marijuana. Notably, 27% of beer drinkers have already switched to cannabis or would consider doing so if it were legalized. This shift may also negatively impact wine and spirits sales, as the beer market share dropped 0.3% to 49.2% last year. The survey suggested that recreational marijuana could take 7.1% of the beer industry’s revenue.
Malandrakis highlighted that beer sales appear particularly vulnerable to the “cannibalizing effect” of cannabis, especially since the core demographic for beer—young adults and millennials—often overlaps with cannabis users. However, craft beer, small-scale brewing, and artisanal spirits attract a similar audience as premium cannabis strains, which can bridge the gap between these industries through hybrid products and collaboration. Existing cross-pollination examples include wines infused with THC, beers containing aromatic marijuana compounds without THC, cannabis-infused vodka, and cannabis cocktails. Additionally, wine and cannabis pairings are being offered on tours, aimed at “premiumizing” specific regions, such as California. “I foresee more of this kind of collaboration in the next few years,” he remarked.
Malandrakis also pointed out that the terminology used in alcoholic beverages is increasingly common in the cannabis industry, with terms like “nose” and “aroma” frequently appearing, along with new phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should embrace the cannabis sector without fear or bias, as there are numerous overlapping areas and shared consumer interests that can be explored for mutual benefit. Furthermore, as the market continues to evolve, products incorporating ingredients like pure calcium citrate may emerge, further blurring the lines between these industries and offering innovative solutions that appeal to consumers seeking both alcohol and cannabis experiences.