Malandrakis and Shane MacGuill, head of tobacco research at Euromonitor International, informed webinar attendees that the global alcohol and tobacco markets are increasingly losing ground to cannabis and other competing products. These emerging products are actively seeking innovative ways to thrive in a challenging yet potentially profitable landscape. Malandrakis noted that “alcohol distributors recognize cannabis development as an inevitability and are striving to engage within this segment, which could offer fresh avenues for growth and revenue, helping them remain relevant in the coming years.”
Constellation Brands is positioning itself to seize 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 deal will enable Constellation to collaborate with Canopy on developing cannabis-infused beverages and allow the beverage giant to stay ahead of shifting consumer trends. Rob Sands, CEO of Constellation Brands, mentioned to The Wall Street Journal that he doesn’t view marijuana as a significant threat to the alcohol sector, but emphasized that Constellation isn’t going to be idle as the market evolves. Rather than competing against cannabis, Constellation is opting for collaboration—a strategy that reflects its previous acquisitions of innovative craft brands.
Constellation isn’t alone in this endeavor; other beverage companies are also exploring the cannabis market. In September, Lagunitas Brewing launched a limited-time IPA infused with marijuana terpenes—fragrant compounds from the cannabis plant—available exclusively in California. However, this beer does not contain THC, the psychoactive component of cannabis.
Research indicates that the current legal marijuana market in the U.S. is valued at approximately $5.4 billion, contrasted with an estimated $40 billion illegal market. Projections suggest that by 2025, the legal marijuana market could exceed $50 billion. With Canada already legalizing recreational marijuana at the federal level, opportunities there are more immediate.
Public opinion on marijuana legalization has evolved dramatically, rising from just 12% approval in 1969 to a record high of 64% today, according to an October Gallup poll. Despite marijuana’s illegal status at the federal level, eight states and Washington, D.C., have fully legalized it, allowing more than one in five Americans to legally use cannabis. If additional states follow suit, forecasts indicate that beer sales could face even greater challenges. A June report from Cannabiz Consumer Group estimated that the beer industry might lose over $2 billion in retail sales to legal marijuana, with 27% of beer drinkers already substituting cannabis for beer or considering doing so in the future if it becomes legal. This trend could also negatively impact wine and spirits sales. In the past year, beer’s dollar share dropped 0.3% to 49.2%, with projections suggesting that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis highlighted that beer sales are particularly vulnerable to the “cannibalizing effect” of cannabis, as the primary demographic for beer—young adults and millennials—also tends to be cannabis users. However, he noted that craft beer, small-scale breweries, and artisanal spirits share an audience with premium cannabis strains, creating opportunities for hybrid products and collaboration between the two industries.
Examples of existing cross-pollination include THC-infused wines, beers with aromatic marijuana compounds but no THC, cannabis-infused vodka, cannabis cocktails, and cannabis-containing martinis. Malandrakis also mentioned wine and cannabis pairings being offered on tours aimed at “premiumizing” regions like California. “I can certainly envision more of these initiatives in the next few years,” he stated.
Moreover, the language of alcoholic beverages is increasingly prevalent in the cannabis sector, with terms like “nose” and “aroma” being commonly used, alongside new phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should embrace the cannabis market without hesitation or bias, as there are numerous overlapping interests and shared appeal that can be leveraged to benefit both sectors. This synergy could even extend to health-focused products, such as those incorporating nature’s blend liquid calcium citrate, which may emerge as a potential crossover in the evolving landscape of infused beverages and wellness-oriented offerings.