Pot: A new golden goose
NEW YORK: The world’s major alcohol producers can no longer ignore the pot phenomenon, as young consumers may increasingly swap beer and cocktails for joints and cannabis-infused drinks. Some have decisively seized the moment. Constellation Brands, maker of Corona beer and Svedka vodka, has poured $4 billion into the Canadian marijuana firm Canopy Growth.
The coming market is “potentially one of the most significant global growth opportunities of the next decade,” said Constellation Chief Executive Robert Sands. Sales of legal marijuana and related products should reach $200 billion within 15 years and the market is opening “much more rapidly than originally anticipated,” he said. Following in Uruguay’s footsteps, Canada on Wednesday will become the second country in the world to legalize recreational marijuana.
Cannabis is still banned under US federal law for any purpose but nine states so far have legalized its recreational use under their own laws, while others have moved toward softening its prohibition in recent years. As a result newer methods of consumption are proliferating: edibles in the form of candies, baked goods and ice creams as well as vaporizers and ointments. And then there are drinks.
Diageo, the world’s largest producer of spirits, including Smirnoff vodka and Johnny Walker whisky, is in talks with Canadian producers, according to Bloomberg. In response to a question from AFP, the company said only that it was closely watching the market. Beer producer Molson Coors has also announced a joint venture with Canada’s Hydropothecary Corporation. Others are more reluctant.
Alexandre Ricard, CEO of Pernod Ricard, explained at the end of August that his company was keeping an eye on the market, especially to determine whether it was likely to “cannibalize” consumption of high-end liquors. And for now, the signals are mixed. Researchers at the University of Connecticut and Georgia State University last year found sales of alcohol dipped 12.4 percent in US counties where medical marijuana was legalized.
But others, including the Distilled Spirits Council, an industry body representing liquor makers in the United States, say sales have not been hurt. “It is still too soon to say one way or the other,” said Keith Villa, a Colorado brewmaster. Creator of the popular Belgian-style “Blue Moon” wheat beer, Villa plans to market a non-alcoholic brew containing THC, the psychoactive ingredient in marijuana. “As with a regular beer, you get a buzz that is similar to the alcohol buzz,” he said. “But the next morning you should not have a hangover.” —AFP