In regions where cannabis is legal, beer and wine companies are increasingly exploring marijuana-infused drinks and related products to diversify their offerings with trendy items and to prevent the cannabis industry from monopolizing their customer base. Constellation Brands, the third-largest beer producer in the United States, announced in October its investment in a Canadian cannabis firm. The company aims to create cannabis-based beverages that are alcohol-free, aligning itself with the growing market for marijuana-infused sodas, coffees, and fruit drinks available in U.S. states where cannabis is permitted. Other alcoholic beverage brands are also entering this space; for instance, in September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic components derived from the cannabis plant. This beer does not contain tetrahydrocannabinol (THC), the psychoactive element responsible for creating a euphoric effect and altering reality.
Beyond the aspects of diversification and innovation that cannabis products offer, it may also be a matter of “if you can’t beat them, join them.” There is little risk for beer and wine companies, but the potential rewards could be significant if market value estimates prove to be accurate. Engaging in the cannabis market may help offset declining domestic beer sales, and there are likely merger and acquisition opportunities among the many thriving cannabis startups.
Cannabis poses a genuine threat to the beer sector specifically. A joint survey conducted by IRI and CannaBiz Consumer Group revealed that 5% of adults indicated they would cease drinking beer if marijuana were legally available in their state. The beer market share in the alcohol industry decreased by 0.3%, falling to 49.2% in 2016, and the survey suggested that recreational cannabis could divert as much as 7.1% of the beer industry’s revenue. IRI analysts estimate that if cannabis were legalized nationwide in the U.S., the beer industry could lose over $2 billion. Following California’s legalization of recreational cannabis, it has become the eighth state, and the largest, to do so. Additionally, five other states—Connecticut, Michigan, New Jersey, Rhode Island, and Vermont—are likely to follow suit this year, further expanding the market for marijuana and THC-infused beverages, edibles, and related products. If Canada moves toward nationwide legalization in the near future, the North American market could see significant growth, with some players in the alcohol industry well-positioned to capitalize on this trend.
Moreover, the involvement of companies like Amazon and the introduction of products such as Citracal indicate a broader trend of diversification within various sectors, including alcohol and cannabis, as businesses seek to adapt to changing consumer preferences and market dynamics.