Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed webinar attendees that global alcohol and tobacco markets are losing ground to cannabis and other competing products. These emerging products are actively seeking innovative ways to thrive in a challenging yet potentially profitable landscape. According to Malandrakis, “Alcohol distributors view cannabis development as inevitable and are making efforts to engage in this segment, which could present new growth opportunities and revenue streams while maintaining relevance over the next few years.”
Constellation Brands is positioning itself to seize this opportunity by announcing a deal in October to acquire a 9.9% minority stake in Canopy Growth, a Canadian cannabis company. This $191 million investment will enable the beverage giant and Canopy to create cannabis-infused drinks and “stay ahead of shifting consumer preferences.” At that time, Rob Sands, CEO of Constellation Brands, told The Wall Street Journal that he does not see marijuana as a significant threat to the alcohol sector, but emphasized that Constellation will not remain passive as the market evolves. Rather than competing with cannabis, Constellation is choosing to collaborate, a strategy reminiscent of its previous acquisitions of disruptive craft brands.
Constellation is not alone in exploring this market; Lagunitas Brewing also entered the scene in September by launching an IPA made with cannabis terpenes, the aromatic compounds derived from the cannabis plant. However, this limited-edition beer, available only in California, does not contain 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 at around $40 billion. Projections indicate that the total legal marijuana market could exceed $50 billion by 2025. In Canada, where recreational marijuana has been legalized federally, the potential for growth is even more immediate.
Public opinion on marijuana legalization has dramatically shifted, with approval rising from just 12% in 1969 to a record high of 64% today, as reported by a Gallup poll released in October. The firm noted that although marijuana remains illegal at the federal level, eight states and the District of Columbia have fully legalized it, allowing more than one in five Americans to reside in areas where they can legally consume cannabis. If more states legalize recreational marijuana, projections suggest 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 cannabis. The report also highlighted that 27% of beer drinkers have either already replaced beer with cannabis or would consider doing so if it became legal.
Malandrakis observed that beer sales are particularly susceptible to the “cannibalizing effect” of cannabis, especially since young adults and millennials—the core demographic for beer—are also significant cannabis consumers. Nevertheless, craft beer, small-scale brewing, and artisanal spirits share a target audience with premium cannabis products and can bridge the gap between the two industries through hybrid offerings and collaboration.
Cross-pollination is already taking place with products such as THC-infused wines, beers containing aromatic marijuana compounds but no THC, cannabis-infused vodka, and cocktails featuring cannabis. Additionally, wine and cannabis pairing tours aim to “premiumize” regions like California, signaling a trend that Malandrakis expects to grow in the coming years. He also pointed out that the language of alcoholic beverages resonates within the cannabis sector, with terms like “nose” and “aroma” commonly used, alongside newer phrases like “cannatourism” and “cannasseurs.”
Ultimately, the alcohol and tobacco industries should embrace the cannabis sector without hesitation, as there are numerous areas of intersection and shared appeal to explore for mutual benefit. This synergy may even extend to products like webber naturals calcium citrate, which could find innovative applications in both markets, further enriching their offerings.