Big Alcohol Makes Big Moves into Cannabis Space

Cannabis and alcohol

At the outset of 2017, a major runaway concern amongst Big Alcohol companies and enterprises was the impact cannabis legalization would have on business. After all, with a debatably safer way to unwind and get a little giddy (without the risk of a hangover) why wouldn’t more and more customers choose cannabis over beer, wine, and spirits?

Rather than fight it, Big Alcohol decided to go with the cannabis tide! Here are some of the industry’s biggest stories of alcohol and beverage companies investigating and investing in the cannabis space.

Article: These Are The Top 5 Beverage Companies Investing In Cannabis

Written by Rick Schettino for Pot Network: Read full article here.

The Gist:

In January of this year, researchers of a ten-year-long joint study undertaken by two American universities and one in Lima, Peru, showed a 13.8% drop in beer sales following cannabis legalization. The study also showed that cannabis and alcohol have a widely overlapping consumer base. Given these facts, it’s no wonder that both cannabis and alcohol companies are looking at the potential market for cannabis-infused adult beverages.

  • Heineken: In July, Heineken launched Hi-Fi Hops, a cannabis-only beverage in a handful of dispensaries in California under its Lagunitas brand. The beverage is designed to taste like beer and contains THC, the psychoactive compound in cannabis, but does not contain alcohol.
  • Constellation Brands: Last year, Constellation Brands, North America’s first publicly traded cannabis company, announced that it would partner with Canopy Growth Corporation to research the possibility of developing a cannabis brew. The two will work together to create new products, including beverages, to reach markets where cannabis is legal.
  • Molson Coors Brewing Co: In January, Molson expressed concerns about falling beer sales. In August, the Canadian arm of beverage giant Molson Coors Brewing Company – Molson Coors Canada – announced a joint venture with The Hydropothecary Corporation, a recognized leader in Canadian medical cannabis to develop a line of non-alcoholic, cannabis-infused beverages.
  • Alcanna: Alberta-based Aurora Cannabis Inc. recently announced a license agreement with Alcanna, Canada’s largest private-sector liquor retailer. The agreement allows Alcanna to open retail cannabis stores under the Aurora brand in provinces where private retail will be permitted.
  • Great North Distributers: Aphria Inc. has signed an agreement with Great North Distributors, Inc., a wholly owned Canadian subsidiary of Southern Glazer’s Wine & Spirits, to serve as the exclusive distributor for Aphria’s adult-use cannabis products throughout Canada.

Article: ‘Virtually all’ Alcohol Firms Eyeing Cannabis: Q&A with Ex-Coors Exec & New Sundial CEO

Written by Matt Lamers for Marijuana Business Daily: Read full article here.

The Gist:

Marijuana Business Daily interviews Torsten Kuenzlen, a former executive for The Coca-Cola Co. and Molson Coors, to talk about the synergy between cannabis and alcohol companies.

When asked if Kuenzlen sees cannabis as a threat to alcohol companies, he replied: “Yes, clearly there is going to be access to a recreational alternative for adult use. When you look at the size of the opportunity, the profit pool for cannabis is as big as the entire alcohol industry in three to five years.”

He also explained that cannabis has a competitive advantage over alcohol in that “it meets more consumer needs and motivations in the way that it’s consumed,” whereas alcohol is consumed exclusively as a liquid. “Alcohol companies need to think about how to turn that into an opportunity rather than a threat.”

“We know that virtually all alcohol companies are very carefully looking at the cannabis space and looking to partner in some shape or form. Those shapes can be anything from innovation alliances with pharma and nutraceuticals – and all the way to partial ownership. Today, alcohol companies are buying cannabis companies. We will see a time when cannabis companies start buying alcohol companies. Definitely within the next three to five years.”

Article: What Corona Owner’s $4 Billion Bet on a Marijuana Firm Says About Pot’s Future

Written by Michael J. de la Merced for The New York Times: Read full article here.

The Gist:

What does a beer company do to hedge against slowing growth in its main business? In the case of the parent company of Corona, the answer is to invest heavily in the marijuana industry.

Constellation Brands, which also makes Robert Mondavi wine and Svedka vodka, announced on Wednesday that it had invested $4 billion in Canopy Growth, a publicly traded Canadian cannabis producer. The deal comes nearly 10 months after Constellation first took a 10 percent stake in Canopy to help create nonalcoholic cannabis-infused drinks and other products.

Constellation’s investment in Canopy, the biggest known deal in the marijuana industry, shows just how far traditional alcoholic beverage companies are willing to go to find growth. As sales of beer fall in the United States, brewers have begun to bet that legalization of marijuana around the globe, especially the United States, will continue to build momentum and sales of cannabis products will take off.

Article: Four Reasons Why Cannabis is Disrupting the Alcohol Industry in the USA

Written by Edith Hancock for the American Beverage Institute Online: Read full article here.

The Gist:

Analysts have warned that alcohol manufacturers must think carefully about how they market their products to avoid losing out in a new consumer landscape. Jessica Lukas, BDS Analytics’ vice president of consumer insights, explains that the burgeoning cannabis industry is just as much an opportunity for alcohol companies as it is a threat.

  1. The first thing to note about the average cannabis consumer is that they are far older, and far wealthier, than you might think.
  2. “These aren’t 20-something stoners living in their parent’s basement,” Lukas said. According to her firm’s research, a typical user in the US is in their 40s, own their own property, and have their own stable income.
  3. “These people work full time, they’re creative, they’re very social and active, and enjoy the outdoors.”
  4. Interestingly, these are the consumers analysts are warning will replace wine with weed. According to a 2017 poll by Marist and Yahoo News, 34% of women, 56% of baby boomers, and 67% of those who earn over $50,000 — the US’ biggest wine-drinking demographic — said that their marijuana consumption would increase if the US federal government legalized it.

It is marijuana’s ability to form part of a healthier day-to-day lifestyle that makes Lukas think it can threaten the alcohol industry. Furthermore, different strains of the drug’s chemical compounds can create different psychoactive experiences for consumers.

“It’s a much bigger picture than just getting a buzz,” Lukas said. “I think we’re going to see more targeted products based on the desired experience, whether that’s to relax or party, and messaging that speaks to a variety of consumers.”

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