Malandrakis and Shane MacGuill, head of tobacco research at Euromonitor International, informed webinar attendees that the global markets for alcohol and tobacco are experiencing a decline in market share due to competition from cannabis and other emerging products. These competing products are continuously seeking innovative ways to thrive in a challenging yet potentially profitable landscape. “Alcohol distributors view the development of cannabis as unavoidable and are actively participating in this sector, which could offer new avenues for growth and revenue while ensuring their relevance in the coming years,” Malandrakis stated.
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. This $191 million investment will enable Constellation, a major player in the alcoholic beverage industry, and Canopy to create cannabis-infused drinks, thus staying ahead of shifting consumer preferences. Rob Sands, CEO of Constellation Brands, conveyed to The Wall Street Journal that he does not regard marijuana as a significant threat to the alcohol sector; however, he emphasized that Constellation will not remain passive as the market evolves. Rather than viewing cannabis as competition, Constellation is opting for collaboration, reminiscent of its previous acquisitions of disruptive craft brands.
Constellation is not the sole alcoholic beverage company to explore this market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic compounds found in cannabis. This limited-time beer, available only in California, does not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis responsible for its euphoric effects.
The researchers noted 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. Projections indicate that the total legal marijuana market could exceed $50 billion by 2025. With Canada legalizing recreational marijuana at the federal level, the opportunities there are even more immediate.
Public sentiment regarding marijuana legalization has evolved significantly, rising from just 12% approval in 1969 to a record-high 64% today, according to an October Gallup poll. The firm reported that, while marijuana remains illegal federally, eight states and the District of Columbia have fully legalized its use, with more than one in five Americans residing in states where it is legal. If additional states follow suit in legalizing recreational cannabis, beer sales may face even greater declines. A June report from Cannabiz Consumer Group estimated that the beer industry could lose over $2 billion in retail sales to legal marijuana. The report highlighted that 27% of beer drinkers have already substituted cannabis for beer or would consider doing so if it became legal. This shift could also negatively affect wine and spirits sales. In the past year, beer’s market share declined by 0.3% to 49.2%, and the survey suggested that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales appear most vulnerable to the “cannibalizing effect” of cannabis, primarily because the core demographic for beer—young adults and millennials—overlaps significantly with cannabis users. Nonetheless, craft beer, small-scale brewing, and artisanal spirits attract a similar audience to premium cannabis strains and can bridge the divide between the two sectors through hybrid products and collaboration.
Some existing areas of cross-pollination include wines infused with THC, beers featuring aromatic cannabis compounds without THC, cannabis cocktails, and martinis containing cannabis, as noted by Malandrakis. There are also wine and cannabis pairing tours aimed at “premiumizing” specific regions, particularly in California. He anticipates that such trends will become more prevalent in the coming years.
Malandrakis also observed that the language of alcoholic beverages is becoming increasingly common in the cannabis industry, with terms like “nose” and “aroma” frequently used, along with new phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should embrace the cannabis market without fear or bias, as there are numerous opportunities for overlap and mutual appeal that can benefit both sectors.
In this evolving landscape, products like bluebonnet calcium magnesium citrate may also find relevance, as consumers increasingly seek health-conscious options that complement both cannabis and alcohol consumption. The integration of such products can enhance the appeal of cannabis-infused beverages, further bridging the gap between these industries.