With 11 states and the District of Columbia now legalizing recreational marijuana, and 33 states legalizing other forms, the slogan “this Bud’s for you” may take on a completely new meaning, as beer providers expand into the cannabis market.
The alcohol industry has seen sales dropping since 2006, as much as 15%, in states where cannabis has been legalized. With the cannabis industry bringing in around $10 billion last year in revenue in the U.S. alone, it’s not surprising that alcohol companies are now looking at adult cannabis users as potential customers.
By the end of 2020, cannabis sales may surpass the projected $15-plus billion revenue generated by the National Football League each year. The newest estimates are that the cannabis industry could grow to $22 billion by 2022 and over $40 billion by 2025.
But cannabis-infused beverages are a bit more complex than simply dropping in ground-up marijuana into holding tanks. Some drinks are infused with tetrahydrocannabinol (THC) and are similar to alcoholic beverages in that their purpose is to give the consumer a buzz. Other drinks use cannabidiol (CBD) with the intention of being therapeutic and easing inflammation and pain.
It may not be long before cannabis will overlap with almost any beverage, from beer to tea, coffee, flavored water and beyond.
A few prominent beverage companies making the jump to cannabis include:
Molson Coors Brewing Company
Last year, the Denver-based company announced a joint venture with the Hydropothecary Corporation (HEXO), a leader in Canadian medical cannabis, to develop a non-alcoholic cannabis-infused beverage for Canadian markets; it’s expected to launch this December. It’s also looking to sell CBD-infused beverages in the U.S. in eight states by 2020. The Coors Distributing Company will also soon start distributing CBD-infused drinks called Sparkling CBD, a line of hemp-derived sodas and sparkling beverages; availability is currently limited to metro Denver.
The manufacturer of Budweiser, Bud Light, and many other beers, is the world’s leading brewer. The company recently invested $50 million toward a joint venture with Tilray, a Canadian cannabis company, to research non-alcohol beverages containing THC and CBD.
Constellation Brands Inc.
Constellation Brands, which makes Corona and Modelo beers, invested $4 billion (38% stake) in Canopy Growth Corp. (CGC), Canada’s largest cannabis producer. The beer company plans to develop beverages infused with cannabis to reach markets where marijuana is legal.
One of the world’s largest beer makers (ranking second behind Anheuser-Busch InBev.), Heineken sells more than 300 beers and ciders. The company owns Lagunitas Brewing, which launched its own cannabis-infused beer in 2018. Hi-Fi Hops is non-alcoholic and designed to taste like beer. It’s available in California and Colorado as a 10mg THC version or a 5mg THC/5mg CBD hybrid.
Coca Cola Inc.
The soft drink company recently has said they are watching the cannabis market for possible entry by infusing drinks with CBD as functional wellness beverages.
It’s still very early in the marijuana beverage industry mainly due to mixed legal status of many U.S. states or most of the world. Only Canada and Uruguay have made headway to legalized recreational marijuana at the national level.
For now, companies will need to balance out the decline in alcohol sales by marketing cannabis-infused beverages. These companies, along with non-alcoholic beverages, may see more profits initially from non-intoxicating CBD-infused beverages.
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.