As various Conservative politicians tumble over themselves to admit their early experiences with drugs of varying illegality, but within limits naturally, it seems as good as time as any for Ian Buxton to look into the drinks industry’s flirtation with weed.
Yes, cannabis. Or dope, grass, bhang or pot – call it what you will, it’s currently taking up a great deal of the time, attention and budget of the drinks industry’s senior executives. Not that they’re smoking the stuff or baking it into their lunchtime snacks, you understand, but a lot of money is changing hands. Cannabis is shaping up to be the next big thing after alcohol.
Much of the activity currently takes place in North America. Canada has liberalised its laws on cannabis and a number of US states are poised to follow. Cannabis-infused drinks are under active development with brewers leading the way. As just one example, giant Canadian brewer Molson Coors took a majority stake in August 2018 in a joint venture with cannabis producer, The Hydropothecary Corporation. It’s taken the resulting Hexo Molson company less than a year to develop their first products, which will go on sale this December as soon as they become legal in Canada.
And what happens in Canada crosses the border to the US fast though currently Federal law prohibits brewers from using marijuana in beer. That hardly presented a problem to the noted craft brewer Keith Villa, the man behind Blue Moon Belgian Wheat Beer. His Ceria Grainwave Belgian-Style White Ale has no alcohol and but includes 5 milligrams of THC, the high-producing ingredient found in cannabis plants. It’s currently available in Colorado, with further distribution planned.
Likewise San Diego’s Two Roots Brewing Co. which has five styles of non-alcoholic THC beer available in California and Nevada. Other craft brewers are piling in, and this hybrid category is rapidly gathering momentum. Apart from the obvious attraction, drinkers seem to be motivated by the wellness trend that is attracting younger US consumers – an alcohol-free buzz definitely fits with the millennial zeitgeist.
A few craft brewers doing funky things is all very well, however, but what about the big boys. Well, they won’t all fess up to their plans but, behind the scenes, work is definitely going on. After all, as Spiros Malandrakis, Euromonitor’s senior alcoholic drinks analyst explains, the industry needs to realise that it can’t stop cannabis’ inexorable rise. The management “can complain”, he says, “but this is going to happen. They can either sit in their offices and say: ‘Oh my God, our industry’s going to die,’ or they can do something and evolve alongside it.”
And, of course, they are. Heineken, for example, owns California’s Lagunitas Brewing, maker of Hi-Fi Hops. According to their ‘Brewmonster’ Jeremy Marshall, “We’ve often dreamed of hops and their cannabis cousin partying together at the family reunion. We wanted to bring this party to life in a beverage. It’s high-time that good beer inspired a provocative, yet refreshing non-alcoholic alternative. With a smidge of California sun-grown cannabis in every sip.”
For the moment, Diageo has yet to make a move. Though rumoured last year to be in talks with three Canadian cannabis producers the official line is that they are “watching” the market but that cannabis-infused alternative drinks have yet to make any discernible impact on their North American sales. “I wouldn’t call them a threat,” says their North American chief Deirdre Mahlan.
Pernod Ricard take much the same line. According to CEO Alexandre Ricard: “We’re seriously monitoring the situation and starting to consider if it (cannabis) would or would not fit in our portfolio.” He went on to say: “We’re not there yet, we’re currently just analysing the data and observing the market from a consumer point of view in a number of US states and Canada. At this stage, and let me be very clear, we have no evidence whatsoever that cannabis legalisation may have an impact on premium spirits consumption.”
Well, perhaps not. But others don’t agree. Legal marijuana in the US is predicted to reach a value of $23bn by 2022 and that’s too lucrative a market to ignore. Step forward Constellation Brands, a major US drinks business (products include Corona Extra lager; Casa Noble Tequila; High West whiskey and strategic investments in a number of craft distillers), who last year pumped almost $4bn into Canopy Growth, a Canadian cannabis group. This followed a previous smaller investment which made Constellation the first Fortune 500 company and the first major alcoholic beverage maker to take a minority stake in a marijuana business.
Others will surely follow. Let’s hope their money doesn’t go up in smoke.
Though he has neither a beard nor any visible tattoos or piercings, Ian Buxton is well-placed to write about drinks. A former Marketing Director of one of Scotland’s favourite single malts, his is a bitter-sweet love affair with Scotland’s national drink – not to mention gin and rum, or whatever the nearest PR is pouring. Once, apparently without noticing, he bought a derelict distillery. Follow his passionate, authentic hand-crafted artisanal journey on the Master of Malt blog. Or just buy his books. It’s what he really wants.