Weed is increasingly more socially accepted and its regulation is more than ever a reality. No wonder the world’s largest alcoholic beverage producers, being aware of this, are starting to invest in the manufacturing of cannabis drinks. This strategic decision aims to find a solution to the sharp drop in alcohol sales experienced by those states where recreational cannabis has been legalized. Some of them, like Heineken or Pernod Ricard, are already working on it.
Spirits companies are determined to diversify their markets, one of their strategies being the use of cannabis as an ingredient for some of their products. The plant is definitely growing in popularity, and well-known brands cannot look the other way.
This new scenario with cannabis gaining ground thanks to recent developments in legislation has given way to a myriad of research studies claiming the pot regulation certainly influences the consumption and sale of alcohol. For example, a study conducted by the University of Connecticut and Georgia State University in 2017 found alcohol sales to have dropped by 12.4% in U.S. counties where medical marijuana was legalized. Although this could well be a fast-changing trend caused by the recent legalization of marijuana, the report speaks about a significant trend that has remained stable for 24 months. The positive trend is 100% evident in states like California and Colorado.
Hi-Fi Hops: the cannabis-infused Heineken
The well-known California brand Heineken has been one of the first beer-producing companies to take a share of this market. Heineken has always been associated with the color green, due to its bottle. So now, thanks to Lagunitas, the newly-released beer brand of the Heineken family only available in California, this association is based on more solid foundations. Their brand-new cannabis-infused beverage named Hi-Fi Hops is part of a strategic move into this sector.
It is available in two versions: one with 10 mg of THC per can, and one with a mix of THC and CBD, 5 mg of each. The non-alcoholic cannabis 'beer' was launched in July and can already be purchased in several Californian cannabis dispensaries. At $8 a can, it's not cheap, but it isn't pricey either when compared to other canned beers.
Beer also wants to shine
These are indeed times of positive change for the beer industry, with producers hoping this increasingly relaxed stance towards cannabis to bring them great joy. Hops, one of the basic ingredients in beer, and cannabis actually belong to the same family (Cannabaceae). They look so much alike and they've got so much in common that their partying together was all but inevitable.
Thanks to this alliance, brews made out of hops, barley, malt, and cannabis aren't just available in small craft markets but also as mass-produced products. A good example of a large-scale producer is the U.S. $42,000 million-worth firm Constellation Brands, who's just bought a 9.9% stake in Canada's most important medical cannabis producer, Canopy Growth Corp. The firm, whose portfolio includes Corona beer, has paid $191 million, with the possibility of increasing its stake, should they feel like it in the future. That's quite a thing to say, isn't it?
Wary but interested
Another major company putting its eye on cannabis is the French spirits giant Pernod Ricard, the world's second most important liquor company. They have repeatedly stressed the importance of adjusting to an ever-changing market where big breaks just fade away and never come back.
Liquor titan's CEO, Alexandre Ricard, stated that they were watching the cannabis sector closely, assessing how badly their sales would be affected by the legalization of pot, something that seems quite likely to happen in many countries. According to data from the company, there's no evidence cannabis is causing them to lose market share in the states where it's been made legal, although Ricard believes it's still too early to know for sure. What he did claim was that, if cannabis was legalized, manufacturers of alcoholic drinks could use it in their products to create completely new lines for their potential customers. This way, they'll see their market shares grow or, at least, they won't get stuck.
Making the switch from alcohol
Some entities, like the national trade association representing producers and marketers of distilled spirits sold in the U.S. Distilled Spirits Council, refute any data indicating cannabis to be responsible for the plunging of alcohol sales and claim it is early to know whether there is any truth in them.
The one thing that is clear is the fact that cannabis-infused beverages offer some advantages that traditional alcohol drinks don't. This is the opinion of Keith Villa, head brewmaster of Blue Moon, who's making his initial foray into cannabis drinks by marketing three new cannabis-laced drinks, similar to traditional beers but without the risk of a hangover.
In principle, the brews will only be available in Colorado. They will not contain any alcohol but a very special mix of cannabinoids that provide a very pleasant sense of euphoria or relaxation. Beer will be brewed like always, with the exception that, in this case, it will be subject to a process of de-alcoholization prior to the addition of cannabis extracts.
Weed refreshments?
The booze business is not the only one keenly watching the evolution of the cannabis market, though. Many other drink-producing companies see the plant as the new cash cow. Sales of fizzy drinks with high sugar content have also been affected as a result of greater awareness of their negative impact on health. That's why CBD, and not THC, has become the new focal point.
One of the major brands seriously considering the possibility of partaking in this sector is The Coca-Cola Company. Now that Canada has legalized pot use, they're talking with the Canadian company Aurora Cannabis about the possibility of teaming up to create a cannabis-infused beverage. However, they claim to have no intention of entering the market "in the short run". Weed seems to have attracted the attention of PepsiCo as well. Although their plans haven't been revealed, the main competitor of Coca-Cola could be looking into the cannabis industry to find the best way to boost sales.
The craze of cannabis-infused drinks has definitely come to stay. In fact, the industry is expected to generate $500 million by 2022 in the U.S., an incredible figure that would make the beverage sector one of the most important ones within the cannabis field. We're talking about 20% of the U.S. cannabis edibles market, some 14% more than today.
Such data leads us to believe that this kind of beverages, which have so far been marginal players of the cannabis game, will soon become standard products for companies and consumers alike. Can cannabis overthrow the alcohol industry? It's still too early to venture that far out, but the alcohol industry knows that marijuana can be a hard-to-beat competitor.
Great post!