Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed webinar attendees that global markets for alcohol and tobacco are losing ground to cannabis and other competing products. These emerging products are actively seeking avenues for innovation and growth within a challenging yet potentially profitable landscape. “Alcohol distributors recognize the inevitability of cannabis development and are making efforts to engage in this sector, which could foster new growth and revenue opportunities, helping them remain relevant in the coming years,” stated Malandrakis.
Constellation Brands is positioning itself to capitalize on this opportunity, having announced in October its intention to acquire a 9.9% minority stake in Canopy Growth, a Canadian cannabis company. The $191 million investment will enable Constellation and Canopy to develop cannabis-infused beverages, allowing them to stay ahead of evolving consumer trends. Rob Sands, CEO of Constellation Brands, mentioned to The Wall Street Journal that he does not view marijuana as a significant threat to the alcohol industry, but emphasized that Constellation will not “stand around twiddling [its] thumbs” as the market expands. Rather than competing with cannabis, Constellation is opting for collaboration—a strategy reminiscent of its numerous acquisitions of 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-time beer available in California does not contain THC, the active chemical in cannabis responsible for its psychoactive effects.
Researchers estimated that the current legal marijuana market in the U.S. is valued at approximately $5.4 billion, while the illegal market is around $40 billion, due to varying state regulations. By 2025, the legal marijuana market is projected to exceed $50 billion. In contrast, Canada has already legalized recreational marijuana at the federal level, presenting immediate potential.
Public opinion on marijuana legalization in the U.S. has shifted significantly, rising from just 12% approval in 1969 to a record 64% today, as reported by a Gallup poll released in October. The firm noted that while marijuana remains illegal federally, eight states and the District of Columbia have fully legalized it, with over one in five Americans living in areas where it is legal.
If more states legalize recreational marijuana, projections indicate 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 marijuana. Notably, 27% of beer drinkers have either substituted cannabis for beer or would consider doing so if it were legalized. The repercussions could extend to reduced sales of wine and spirits as well. Last year, beer’s dollar share fell by 0.3% to 49.2%, and the survey suggested that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis asserted that beer sales appear particularly vulnerable to the “cannibalizing effect” of cannabis, as the core demographic for beer—young adults and millennials—also tends to be cannabis users. However, craft beer, small-batch brewing, and artisanal spirits share an audience with premium cannabis strains, allowing for hybrid products and collaborations that could bridge the two industries.
Existing examples of cross-pollination include THC-infused wines, beers containing aromatic marijuana compounds without THC, cannabis-infused vodka, and cocktails, as well as cannabis-based martinis. Wine and cannabis pairings are also being offered on tours that aim to “premiumize” specific regions, particularly in California. “I can definitely envision more of this kind of synergy in the next few years,” he remarked.
Malandrakis highlighted that the vocabulary of alcoholic beverages is widely adopted in the cannabis industry, with terms such as “nose” and “aroma” frequently used, along with newly coined 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 common interests that can be explored for mutual benefit.
In this evolving landscape, products like calcium citrate powder 8 oz may also find their way into cannabis-infused beverages, further bridging the gap between these industries. The integration of such ingredients could pave the way for innovative offerings that cater to health-conscious consumers seeking new experiences in both the alcohol and cannabis markets.