During a recent webinar, Malandrakis and Shane MacGuill, head of tobacco research at Euromonitor International, informed participants that the global markets for alcohol and tobacco are increasingly ceding ground to cannabis and other competing products. These emerging products are actively seeking innovative strategies for growth in a challenging yet potentially rewarding environment. “Alcohol distributors recognize the inevitability of cannabis development and are striving to engage with this sector, which presents a fresh opportunity for expansion and revenue, as well as a means to maintain relevance in the coming years,” stated Malandrakis.
A prominent player positioning itself to capitalize on this opportunity is Constellation Brands, which revealed in October its plans to acquire a 9.9% minority stake in Canopy Growth, a Canadian cannabis company. This $191 million deal will enable the beverage giant and Canopy to collaborate on cannabis-infused beverages, allowing them to stay ahead of shifting consumer trends. Rob Sands, CEO of Constellation Brands, expressed to The Wall Street Journal that he does not view marijuana as a serious threat to the alcohol industry; however, the company is not simply going to wait idly as the market evolves. Instead of competing with cannabis, Constellation is opting to partner with it, echoing its previous strategies of acquiring disruptive craft brands.
Constellation is not alone in exploring this new market. In September, Lagunitas Brewing launched a limited-edition IPA infused with marijuana terpenes, aromatic compounds derived from the cannabis plant. However, this beer, available only in California, does not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis.
The current legal marijuana market in the U.S. is valued at approximately $5.4 billion due to inconsistent state regulations, while the illegal market is estimated at $40 billion. Researchers project that by 2025, the legal marijuana market could exceed $50 billion. Canada, having legalized recreational marijuana at the federal level, presents more immediate potential. According to an October Gallup poll, public opinion on marijuana legalization has shifted dramatically, with approval rising from just 12% in 1969 to a record 64% today. Although marijuana remains illegal at the federal level, eight states and the District of Columbia have fully legalized it, with more than one in five Americans living in states where cannabis use is legal.
Should additional states legalize recreational marijuana, beer sales are projected to face even greater challenges. A June report by Cannabiz Consumer Group estimated that the beer industry could lose over $2 billion in retail sales to legal cannabis. The report indicated that 27% of beer drinkers have already replaced beer with cannabis or would consider doing so if marijuana were legalized. This shift could also affect sales of wine and spirits. Beer’s market share fell 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 are particularly vulnerable to the “cannibalizing effect” of cannabis, as the core demographic for beer—young adults and millennials—also tends to be cannabis consumers. However, he noted that craft beer, small-scale brewing, and artisanal spirits attract a similar audience to premium cannabis strains, suggesting opportunities for collaboration and hybrid products between the two industries.
Current examples of cross-pollination include THC-infused wines, beers containing aromatic marijuana compounds without THC, cannabis-infused vodka, cannabis cocktails, and a martini product made with cannabis. There are also wine and cannabis pairing tours that aim to ‘premiumize’ specific regions, such as California. “I can definitely envision more of these initiatives in the coming years,” he remarked.
Malandrakis emphasized that the language of alcoholic beverages is becoming increasingly common in the cannabis industry, with terms like “nose” and “aroma” frequently used, alongside newly coined phrases such as “cannatourism” and “cannasseurs.” Ultimately, he concluded that the alcohol and tobacco sectors should embrace the cannabis industry without fear or prejudice, as numerous areas of overlap and mutual appeal can be explored for the benefit of both industries.
By understanding the changing landscape and the potential of cannabis, companies in the alcohol sector, such as those offering Citracal D 315 200 mg products, can find innovative pathways to thrive alongside this burgeoning market.