Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed webinar attendees that the global markets for alcohol and tobacco are losing ground to cannabis and other competing products. These emerging products are seeking innovative ways to thrive in a challenging yet potentially profitable landscape. “Alcohol distributors recognize the inevitability of cannabis development and are actively engaging in this sector, which could open new avenues for growth and revenue while ensuring their relevance in the coming years,” Malandrakis stated.
Positioning itself to seize this opportunity is Constellation Brands, which announced in October its plan to acquire a 9.9% minority stake in Canopy Growth, a Canadian cannabis company. This $191 million deal will enable the beverage giant and Canopy to create cannabis-infused drinks and “stay ahead of changing consumer trends.” Rob Sands, the CEO of Constellation Brands, told The Wall Street Journal at the time that he does not see marijuana as a significant threat to the alcohol sector; however, Constellation is not going to “stand by idly” as the market expands. Instead of competing against cannabis, Constellation is collaborating with it — a strategy reminiscent of its numerous acquisitions of disruptive craft brands.
Constellation is not alone in exploring this new market. In September, Lagunitas Brewing introduced an IPA made with marijuana terpenes, which are aromatic compounds found in the cannabis plant. However, this limited-edition beer, available only in California, does not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis.
Researchers report that the current legal marijuana market in the U.S. is valued at approximately $5.4 billion, while the illegal market is believed to be around $40 billion, due to inconsistent state regulations. By 2025, the total legal marijuana market is projected to exceed $50 billion. As Canada has legalized recreational marijuana at the federal level, the opportunities there are more immediate.
According to a Gallup poll released in October, American attitudes towards marijuana legalization have changed dramatically, jumping from just 12% approval in 1969 to a record high of 64% today. The firm noted that while marijuana remains illegal at the federal level, eight states and the District of Columbia have fully legalized it, with over one in five Americans residing in a state where its use is legal.
Should more states legalize recreational marijuana, projections indicate that beer sales could face even greater challenges. A report from Cannabiz Consumer Group estimated that the beer industry could lose over $2 billion in retail sales to legal cannabis. Notably, 27% of beer drinkers have already swapped beer for cannabis or would consider doing so if it were legalized. This trend could also negatively impact wine and spirits sales. Last year, beer’s dollar share dropped by 0.3% to 49.2%, and the survey suggested that recreational marijuana could seize 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales appear particularly vulnerable to the “cannibalizing effect” of cannabis, as the primary demographic for beer — young adults and millennials — are also likely to be cannabis users. However, craft beer, small-scale brewing, and artisanal spirits attract a similar audience to premium cannabis strains and could bridge the gap between the two industries through hybrid products and collaboration.
Existing examples of cross-pollination include wines infused with THC, beers containing aromatic marijuana compounds without THC, cannabis-infused vodka, cannabis cocktails, and even a cannabis-containing martini. Additionally, wine and cannabis pairings are being featured in tours aimed at “premiumizing” regions like California. “I foresee more such initiatives in the coming years,” he remarked.
Malandrakis also observed that the language of alcoholic beverages is prevalent in the cannabis industry, with terms like “nose” and “aroma” being commonly used, alongside newly coined phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should embrace the cannabis sector without hesitation, as there are numerous overlapping areas and shared appeal that can be explored for mutual benefit.
In this evolving landscape, the integration of health-focused compounds like calcitriol calcium citrate malate could further enhance product offerings, appealing to health-conscious consumers. As these industries converge, opportunities for innovation and collaboration abound, making it essential for all stakeholders to adapt and thrive.