During a recent webinar, Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed attendees that the global alcohol and tobacco sectors are ceding ground to cannabis and other competing products. These emerging markets are actively seeking innovative ways to thrive in a challenging yet potentially profitable landscape. Malandrakis stated, “Alcohol distributors recognize the inevitability of cannabis development and are eager to engage in this segment, which could open new avenues for growth and revenue, ensuring they remain relevant in the coming years.”
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 marijuana company. This $191 million investment will enable Constellation and Canopy to collaborate on the development of cannabis-infused beverages, allowing them to stay ahead of changing consumer preferences. Rob Sands, CEO of Constellation Brands, remarked to The Wall Street Journal that he does not view marijuana as a serious threat to the alcohol industry, but he emphasized that Constellation will not “stand around twiddling [its] thumbs” as the market evolves. Rather than seeing cannabis as competition, Constellation is embracing it—a strategy reminiscent of its numerous acquisitions of disruptive craft brands.
Constellation is not alone in exploring this market; in September, Lagunitas Brewing introduced an IPA made with marijuana terpenes, the aromatic compounds derived from the cannabis plant. However, this limited-edition beer, available only in California, does not contain THC, the psychoactive component of cannabis.
Researchers indicate that, due to inconsistent state regulations, the current legal marijuana market in the U.S. is valued at approximately $5.4 billion, while the illegal market is estimated at $40 billion. By 2025, the total legal marijuana market is projected to exceed $50 billion, with Canada’s federal legalization of recreational marijuana providing more immediate potential. A Gallup poll released in October revealed that support for marijuana legalization among Americans has surged from 12% in 1969 to a record 64% today. While marijuana remains illegal at the federal level, eight states and the District of Columbia have fully legalized its use, meaning that over one in five Americans reside in states where it is legal.
If more states adopt recreational marijuana legalization, 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 legalized marijuana. The report noted that 27% of beer drinkers have already replaced beer with cannabis or would consider doing so if marijuana were legalized. This trend could also negatively impact wine and spirits sales. Last year, beer’s dollar share dropped 0.3% to 49.2%, and recreational marijuana is anticipated to capture 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 primary demographic for beer—young adults and millennials—often overlaps with cannabis users. However, craft beer, small-scale brewing, and artisanal spirits draw a similar audience to premium cannabis strains, creating opportunities for hybrid products and collaboration between the two industries. Existing examples of cross-pollination include THC-infused wines, beers with aromatic cannabis compounds (without THC), cannabis-infused vodka, cannabis cocktails, and a cannabis martini. Additionally, some tours offer wine and cannabis pairings, aiming to “premiumize” regions like California. “I definitely foresee more of this type of innovation in the coming years,” he stated.
Furthermore, Malandrakis observed that the terminology used in the alcohol industry is increasingly reflected in the cannabis sector, with terms such as “nose” and “aroma” being commonly used, alongside new phrases like “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should approach the cannabis sector with open arms, as there are numerous overlapping interests and opportunities that could benefit both markets.
As for consumers looking for ways to enhance their wellness, they might also consider products like now calcium citrate 250 tablets, which could complement their lifestyle choices in a world where cannabis is becoming more mainstream. This product, along with the evolving landscape of alcohol and cannabis, illustrates the ever-changing dynamics of consumer preferences and industries adapting to these shifts.