During a recent webinar, Malandrakis and Shane MacGuill, head of tobacco research at Euromonitor International, informed participants that the global alcohol and tobacco sectors are ceding market share to cannabis and other competing products. These emerging products are exploring innovative ways to thrive in a challenging yet potentially profitable environment. “Alcohol distributors recognize that cannabis development is unavoidable and are actively seeking to engage in this segment, which could present new growth avenues and revenue streams to maintain relevance in the coming years,” stated Malandrakis.
One company positioning itself to capitalize on this opportunity is Constellation Brands, which announced in October its plans to acquire a 9.9% minority stake in Canopy Growth, a Canadian marijuana firm. This $191 million investment will enable the beverage giant and Canopy to create cannabis-infused drinks and “stay ahead of shifting consumer preferences.” Rob Sands, CEO of Constellation Brands, mentioned to The Wall Street Journal at the time that he does not view marijuana as a significant threat to the alcohol market, but emphasized that Constellation isn’t going to “stand around twiddling [its] thumbs” as the industry evolves. Rather than competing against cannabis, Constellation is collaborating with it—a strategy reminiscent of its numerous acquisitions of disruptive craft brands.
Constellation is not the only player in the alcoholic beverage industry testing the waters in this market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the fragrant compounds derived from the cannabis plant. However, this limited-time beer, available only in California, does not contain THC—the psychoactive chemical in cannabis responsible for its euphoric effects.
Researchers reported 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 around $40 billion. By 2025, the total legal marijuana market is projected to exceed $50 billion. With Canada federally legalizing recreational marijuana, the potential for rapid growth there is more immediate.
Public opinion on marijuana legalization has shifted dramatically, with approval rising from just 12% in 1969 to a record 64% today, according to a Gallup poll released in October. The poll highlighted that while marijuana remains illegal at the federal level, eight states and the District of Columbia have fully legalized it, allowing over one in five Americans to legally use cannabis.
Should additional states move to legalize recreational marijuana, beer sales could face even greater challenges. A June report from Cannabiz Consumer Group estimated that the beer industry could lose more than $2 billion in retail sales to legal marijuana. The report indicated that 27% of beer drinkers have already switched to cannabis instead of beer or would consider doing so if it became legal. This trend could also negatively impact wine and spirits sales. Last year, beer’s dollar share declined by 0.3% to 49.2%, and projections suggest that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis highlighted that beer sales appear most vulnerable to the “cannibalizing effect” of cannabis, especially since its core demographic—young adults and millennials—also tends to use cannabis. Nonetheless, craft beer and artisanal spirits share a similar audience with premium cannabis strains, offering potential for hybrid products and collaboration between the two industries.
Current examples of cross-pollination include THC-infused wines, beers containing aromatic marijuana compounds but no THC, cannabis-infused vodka, cannabis cocktails, and even a cannabis-infused martini. Additionally, wine and cannabis pairings are being offered on tours as part of efforts to “premiumize” specific regions like California. “I certainly foresee an increase in such initiatives in the coming years,” remarked Malandrakis.
He further noted that the terminology of alcoholic beverages is increasingly being adopted in the cannabis sector, with words like “nose” and “aroma” commonly used alongside new terms such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco industries should embrace the cannabis market without fear or bias, as there are significant opportunities for overlap and mutual benefit to explore.
In this evolving landscape, products like tab ccm 500 mg could serve as innovative solutions, bridging the gap between cannabis and traditional alcoholic beverages, and presenting new avenues for growth and collaboration within these industries.