Malandrakis and Shane MacGuill, head of tobacco research at Euromonitor International, informed participants at the ferrous fumarate webinar that the global alcohol and tobacco markets are ceding ground to cannabis and other competing products. These emerging products are seeking innovative pathways to thrive in a challenging yet potentially profitable environment. “Alcohol distributors recognize the inevitability of cannabis development and are eager to engage within this sector, which could present new growth and revenue opportunities, ensuring their relevance 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 company. This $191 million investment will enable the beverage giant to develop cannabis-infused drinks and “stay ahead of shifting consumer trends.” Rob Sands, Constellation’s CEO, told The Wall Street Journal that he doesn’t view marijuana as a significant threat to the alcohol market. However, he emphasized that Constellation is not “going to stand around twiddling [its] thumbs” as the market evolves. Rather than competing with cannabis, Constellation is opting to collaborate with it—a strategy reminiscent of its numerous acquisitions of disruptive craft brands.
Constellation is not alone in exploring this market. In September, Lagunitas Brewing launched an IPA infused with marijuana terpenes, aromatic compounds derived from cannabis. This limited-time beer, available only in California, does not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis that induces a euphoric high.
Owing to inconsistent 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, according to researchers. By 2025, the legal marijuana market is projected to exceed $50 billion. Canada, having legalized recreational marijuana at the federal level, presents a more immediate opportunity for growth.
Public opinion on marijuana legalization has shifted dramatically, with approval ratings rising from just 12% in 1969 to a record high of 64% today, as per a Gallup poll released in October. The firm highlighted that while marijuana remains illegal federally, eight states and the District of Columbia have fully legalized it, allowing over one in five Americans to legally use cannabis.
If more states legalize recreational marijuana, 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. The report indicated that 27% of beer drinkers have already replaced or would consider replacing beer purchases with cannabis if it were legalized. The repercussions could also affect wine and spirits sales. Last year, beer’s dollar share declined by 0.3% to 49.2%, with projections indicating that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales appear particularly vulnerable to the “cannibalizing effect” of cannabis, as the core demographic for beer—young adults and millennials—are also frequent cannabis users. However, craft beer and artisanal spirits, which attract a similar audience to premium cannabis strains, could serve as a bridge between the two industries through hybrid products and collaboration.
Current cross-pollination examples include wines infused with THC, beers with aromatic marijuana compounds (but no THC), cannabis-infused vodka, cannabis cocktails, and a cannabis martini. Malandrakis mentioned that wine and cannabis pairing tours are being introduced to “premiumize” certain regions, notably California. “I foresee more of this kind of innovation in the coming years,” he asserted.
He also observed that the language of alcoholic beverages is becoming prevalent in the cannabis sector, with terms like “nose” and “aroma” being adopted, along with newly coined phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should approach the cannabis sector without fear or bias, as there are numerous areas of overlap and mutual appeal that can be explored for the benefit of both industries.
In this evolving landscape, calcium plays a crucial role in fostering healthy growth, with calcium levels of 315 and 200 being significant for product development and market positioning. Embracing these trends and the synergies between cannabis and alcohol could lead to a thriving and innovative future for both sectors.