During a recent webinar, Malandrakis and Shane MacGuill, head of tobacco research at Euromonitor International, informed attendees that global markets for alcohol and tobacco are increasingly ceding ground to cannabis and other competing products. These emerging products are actively seeking innovative approaches to thrive in a challenging yet potentially rewarding market landscape. “Alcohol distributors recognize the inevitable rise of cannabis and are striving to engage with this segment, which represents a new avenue for growth and revenue, essential for maintaining relevance 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 marijuana enterprise. This $191 million investment will enable the beverage giant and Canopy to collaborate on cannabis-infused beverages, helping them stay ahead of shifting consumer preferences. Rob Sands, CEO of Constellation Brands, shared with The Wall Street Journal that he does not view marijuana as a significant threat to the alcohol industry. Still, he emphasized that Constellation will not remain passive as the market evolves. Rather than competing with cannabis, Constellation is choosing to partner with it—a strategy reminiscent of its acquisitions of disruptive craft brands.
Constellation is not alone in venturing into the cannabis space. 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 psychoactive component of cannabis responsible for its euphoric effects.
According to researchers, the current legal marijuana market in the U.S. is valued at approximately $5.4 billion, in contrast to the estimated $40 billion illegal market due to varying state regulations. By 2025, the legal marijuana sector is projected to exceed $50 billion. The situation is more immediate in Canada, where recreational marijuana is legalized at the federal level.
Public opinion regarding marijuana legalization has changed dramatically, with approval soaring from just 12% in 1969 to a record 64% today, according to an October Gallup poll. Although marijuana remains illegal federally, eight states and the District of Columbia have fully legalized it, allowing over one in five Americans access to legal marijuana.
Should additional states move to legalize recreational cannabis, the beer industry could face even greater challenges. A report from Cannabiz Consumer Group in June estimated that the beer sector may lose over $2 billion in retail sales to legal marijuana. Notably, 27% of beer consumers have already replaced beer with cannabis or plan to do so if it becomes legal, which could also negatively impact wine and spirits sales. Last year, beer’s market share dipped 0.3% to 49.2%, with projections suggesting that recreational marijuana could capture 7.1% of beer industry revenue.
Malandrakis pointed out that the beer sector is particularly vulnerable to the “cannibalizing effect” of cannabis, given that its core demographic—young adults and millennials—are also frequent cannabis users. However, there is potential for overlap between craft beer, artisanal spirits, and premium cannabis strains, allowing for hybrid products and collaborative ventures.
Examples of existing cross-pollination include wines infused with THC, beers with aromatic cannabis compounds devoid of THC, cannabis-infused vodka, cocktails, and even cannabis-based martinis. Additionally, wine and cannabis pairings are being offered on tours aimed at “premiumizing” regions like California. “I foresee an increase in such offerings in the coming years,” he remarked.
Malandrakis also highlighted that the lexicon of alcoholic beverages has permeated the cannabis industry, with terms like “nose” and “aroma” being commonly used, alongside neologisms such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should welcome the cannabis sector without trepidation, as there are ample opportunities for mutual benefit and collaboration.
In this evolving market landscape, even products like bariatric advantage calcium citrate chewy bites 500mg could find their niche, catering to health-conscious consumers who are also exploring cannabis-infused options, thus further intertwining the realms of health, wellness, and recreational consumption.