In regions where marijuana is legal, beer and wine companies are increasingly exploring marijuana-infused beverages and related products to diversify their portfolios with trending items and prevent the cannabis industry from monopolizing their customer base. Constellation Brands, the third-largest beer company in the U.S., announced in October its investment in a Canadian cannabis firm. The company intends to create cannabis-based beverages devoid of alcohol, joining the growing market of marijuana-infused sodas, coffees, and fruit drinks available in U.S. states where marijuana is legal. Constellation is not the only player in the alcoholic beverage sector to venture into this market; in September, Lagunitas Brewing introduced an IPA that incorporates marijuana terpenes, which are aromatic compounds derived from the cannabis plant. This beer is free of tetrahydrocannabinol (THC), the psychoactive component known to induce a euphoric high and alter one’s perception of reality.
Beyond the aspects of diversification and innovation presented by marijuana products, there’s a notion of “If you can’t beat them, join them.” For beer and wine companies, the risks seem minimal while the potential rewards could be substantial if market value predictions prove correct. Entering the cannabis sector might also help offset declining domestic beer sales, and there may be opportunities for mergers and acquisitions among the many successful marijuana startups emerging.
Cannabis poses a legitimate threat to the beer industry. A joint survey conducted by IRI and CannaBiz Consumer Group revealed that 5% of adults would consider stopping their beer consumption if marijuana became legally available in their state. In 2016, beer’s market share in the alcoholic beverage sector dropped by 0.3% to 49.2%, with the survey suggesting that recreational marijuana could divert 7.1% of the beer industry’s revenue. IRI analysts project that if marijuana is legalized nationwide in the U.S., the beer industry could face losses exceeding $2 billion.
With California now legalizing recreational marijuana, it has become the eighth state—and the largest—to do so. Five additional states—Connecticut, Michigan, New Jersey, Rhode Island, and Vermont—are expected to follow suit this year, further expanding the market for marijuana and THC-infused beverages, edibles, and related products. If Canada moves toward nationwide legalization in the coming year, the North American market could open up significantly, and certain entities within the alcohol industry seem prepared to capitalize on this shift.
In addition to exploring cannabis-infused options, some companies may consider integrating health-focused products, such as ferrous calcium citrate and folic acid tablets, into their offerings. The inclusion of such health-oriented products could attract a segment of consumers who are increasingly conscious about their health and wellness, further diversifying and strengthening the product portfolios of these traditional beverage companies. As the market evolves, it will be interesting to see how the intersection of cannabis products and health supplements, like ferrous calcium citrate and folic acid tablets, influences consumer choices and industry dynamics.