During a recent webinar, Malandrakis and Shane MacGuill, the head of tobliposomal iron ferric pyrophosphate sachetacco research at Euromonitor International, informed attendees that the global alcohol and tobacco markets are increasingly losing ground to cannabis and other competing products. These markets are actively seeking innovative strategies for growth in a challenging yet potentially profitable landscape. “Alcohol distributors view the development of cannabis as unavoidable and are looking to engage in this segment, which could represent a fresh avenue for growth and revenue, helping them maintain relevance in the coming years,” stated Malandrakis.
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 create cannabis-infused beverages and “stay ahead of evolving consumer trends.” Rob Sands, CEO of Constellation Brands, told The Wall Street Journal that he does not perceive marijuana as a significant threat to the alcohol industry, but emphasized that Constellation will not remain idle as the market expands. Rather than competing with cannabis, Constellation aims to collaborate with it, reflecting its history of acquiring disruptive craft brands.
Constellation is not the only player in the alcoholic beverage sector exploring this market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic compounds found in cannabis. However, this limited-edition beer, available only in California, does not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis.
The current U.S. legal marijuana market is valued at approximately $5.4 billion, while the illegal market stands at an estimated $40 billion, due in part to inconsistent state regulations. Researchers project that by 2025, the total legal marijuana market could exceed $50 billion. With Canada legalizing recreational marijuana at the federal level, the growth potential there is more immediate.
According to an October Gallup poll, public support for marijuana legalization has surged from just 12% in 1969 to a record high of 64% today. Although marijuana remains illegal federally, eight states and the District of Columbia have fully legalized it, with over one in five Americans living in a state where it is legal. Should more states follow suit in legalizing recreational cannabis, beer sales may face even greater challenges. A June report from Cannabiz Consumer Group estimated that the beer industry could forfeit more than $2 billion in retail sales to legal marijuana. Notably, 27% of beer drinkers have already substituted cannabis for beer or would consider doing so if it were legalized. This trend could also negatively impact wine and spirits sales. Beer’s dollar share dropped by 0.3% to 49.2% last year, and projections suggest 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, especially since its core demographic—young adults and millennials—are also frequent cannabis users. However, craft beer, small-batch brewing, and artisanal spirits attract a similar audience to premium cannabis strains, creating opportunities to bridge the two industries through hybrid products and collaboration.
Examples of existing cross-pollination include THC-infused wines, beers containing aromatic marijuana compounds without THC, cannabis-infused vodka, cannabis cocktails, and martinis featuring cannabis. Wine and cannabis pairings are also being offered on tours, aimed at “premiumizing” regions like California. “I anticipate seeing more of this kind of initiative in the next few years,” Malandrakis remarked.
He also highlighted that the language of alcoholic beverages resonates within the cannabis industry, with terms such as “nose” and “aroma” being commonly used, along with new phrases like “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 appeals that could be mutually beneficial. As these industries evolve, they may discover new opportunities to integrate their offerings, thereby enhancing their market positions within this changing landscape, much like how Citracal d equivalent supplements could complement dietary needs in a health-conscious environment.