Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed webinar participants that the global alcohol and tobacco markets are losing ground to cannabis and other competing products. These sectors are seeking innovative methods to thrive in a challenging yet potentially profitable environment. “Alcohol distributors recognize the inevitability of cannabis development and are proactively engaging in this segment, which could open new avenues for growth and revenue and help them stay relevant in the coming years,” Malandrakis noted.
Constellation Brands aims to capitalize on this opportunity, recently announcing its acquisition of a 9.9% minority stake in Canopy Growth, a Canadian marijuana firm, for $191 million. This partnership will enable the beverage giant and Canopy to create cannabis-infused drinks and “stay ahead of changing consumer preferences.” Rob Sands, CEO of Constellation, told The Wall Street Journal that he doesn’t view marijuana as a significant threat to the alcohol industry, but emphasized that Constellation would not “sit idle” as the market expands. Rather than competing against cannabis, Constellation is choosing to collaborate with it—a strategy reminiscent of its previous acquisitions of disruptive craft brands.
Constellation isn’t the only player in the alcoholic beverage sector venturing into this market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic compounds found in cannabis. However, this limited-time beer, available only in California, does not contain THC—the active compound in cannabis that induces a high.
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 to reach $40 billion. By 2025, the legal marijuana market is projected to exceed $50 billion, especially since Canada has legalized recreational marijuana at the federal level, providing more immediate potential. Public opinion on marijuana legalization has shifted dramatically, with a Gallup poll revealing that support has risen from just 12% in 1969 to an all-time high of 64% today. The firm noted that although marijuana remains illegal at the federal level, eight states and the District of Columbia have fully legalized its use, meaning more than one in five Americans live in areas where it is legal.
If additional states legalize recreational marijuana, projections indicate that beer sales could be adversely affected. A report from Cannabiz Consumer Group estimated that the beer industry could lose over $2 billion in retail sales to legal marijuana. The report highlighted that 27% of beer drinkers have already opted for cannabis over beer or would consider doing so if marijuana were legalized. This impact could extend to decreased sales for wine and spirits as well. Beer’s market share dipped by 0.3% to 49.2% last year, and the survey indicated that recreational marijuana could claim 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales appear most vulnerable to the “cannibalizing effect” of cannabis, as the core demographic for beer—young adults and millennials—also tends to be cannabis consumers. However, craft beer, small-scale breweries, and artisanal spirits share a similar audience with premium cannabis strains and can bridge the gap between the two industries through hybrid products and collaboration.
Current cross-pollination examples include wines infused with THC, beers containing aromatic marijuana compounds without THC, cannabis-infused vodka, cannabis cocktails, and a martini featuring cannabis. Tours are also offering wine and cannabis pairings, aimed at “premiumizing” regions like California. “I foresee more of these developments in the coming years,” Malandrakis remarked.
He also noted that the language of alcoholic beverages has permeated the cannabis industry, with terms like “nose” and “aroma” being commonly used, alongside newly coined phrases such as “cannatourism” and “cannasseurs.” The takeaway is that both the alcohol and tobacco sectors should embrace the cannabis industry without apprehension or bias, as there are numerous opportunities for mutual exploration and benefit. Additionally, as consumers seek the best calcium citrate supplement for osteoporosis, the intersection of these industries could pave the way for innovative products that cater to health-conscious individuals.