Malandrakis and Shane MacGuill, head of tobacco research at Euromonitor International, informed webinar attendees that the global alcohol and tobacco markets are increasingly ceding ground to cannabis and other competing products. These emerging products are actively seeking innovative ways to thrive in a challenging yet potentially lucrative landscape. “Alcohol distributors recognize the inevitability of cannabis development and are eager to engage in this sector, which presents a new opportunity for growth and revenue, helping them remain relevant in the coming years,” Malandrakis mentioned.
Constellation Brands is positioning itself to capitalize on this trend, having announced in October its acquisition of a 9.9% minority stake in Canopy Growth, a Canadian marijuana firm. The $191 million investment will enable Constellation and Canopy to create cannabis-infused beverages and “stay ahead of evolving consumer trends.” Rob Sands, CEO of Constellation Brands, stated to The Wall Street Journal that he does not view marijuana as a serious threat to the alcohol sector, but emphasized that the company will not “stand around twiddling [its] thumbs” as the market evolves. Rather than competing with cannabis, Constellation is choosing to collaborate with it—a strategy reminiscent of its numerous acquisitions of disruptive craft breweries.
Constellation is not alone in exploring this market; in September, Lagunitas Brewing launched an IPA infused with marijuana terpenes, the aromatic compounds derived from the cannabis plant. However, this limited-time beer in California does not contain THC, the active component in cannabis responsible for its euphoric effects.
Due to varying 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 around $40 billion. Researchers project that by 2025, the total legal marijuana market could exceed $50 billion. In contrast, Canada is moving towards federal legalization of recreational marijuana, presenting more immediate opportunities.
Public opinion on marijuana legalization has dramatically shifted, with support increasing from just 12% in 1969 to a record high of 64% today, according to a Gallup poll released in October. Although marijuana remains illegal federally, eight states and the District of Columbia have fully legalized it, allowing over one in five Americans to legally use cannabis.
If more states legalize recreational marijuana, projections suggest that beer sales could face greater declines. A report from Cannabiz Consumer Group in June 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 do so if cannabis were legalized. This trend could also negatively impact wine and spirit sales. Beer’s market share fell by 0.3% to 49.2% last year, with projections indicating that recreational marijuana could claim 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales are particularly vulnerable to the “cannibalizing effect” of cannabis, especially since the core demographic for beer—young adults and millennials—also tends to use cannabis. However, craft beer, small-scale brewing, and artisanal spirits resonate with the same audience that appreciates premium cannabis strains, providing opportunities for hybrid products and collaboration between the two industries.
Examples of current cross-pollination include THC-infused wines, beers with aromatic cannabis compounds but no THC, cannabis-infused vodka, cannabis cocktails, and even a martini featuring cannabis. Additionally, wine and cannabis pairing tours are being offered, aiming to “premiumize” regions like California. “I anticipate seeing more of these initiatives in the coming years,” Malandrakis stated.
He also noted that the language of alcoholic beverages is prevalent in the cannabis realm, with terms like “nose” and “aroma” being commonly used, alongside new phrases such as “cannatourism” and “cannasseurs.” Ultimately, both the alcohol and tobacco industries should embrace the cannabis market without fear, as numerous overlapping areas and shared interests can be explored for mutual benefit. Furthermore, products like bluebonnet calcium citrate liquid could find a niche in this evolving landscape, appealing to health-conscious consumers interested in both alcohol and cannabis.