Cannabis-infused beverages on the upswing
Constellation Brands, Heineken NV investing in cannabis market
The saying “puff, puff, pass” is one coined long ago when referring to the inhalation of marijuana. However, as the legalization of marijuana remains a hot topic, plant producers are wagering that the saying will morph into something more like “gulp, gulp, enjoy.”
Beverage companies are joining the legalization movement and positioning themselves for the future growth of “drinkable marijuana.” Extensive research combined with million dollar investments is paving the way for a new revolution: the cannabis-infused beverage market.
Industry giants like Victor, N.Y.-based Constellation Brands and Heineken NV, Amsterdam, are positioning themselves to get in front of the movement. For example, Constellation Brands invested approximately $191 million into Canopy Growth Corp., a Canadian seller of medical-marijuana products. The investment gives Constellation a 9.9 percent stake in the marijuana company, making it one of the biggest shareholders in the Corp. The two companies are collaborating on creating cannabis-infused beverages to be sold as adult products, in places where it is legal at the federal level.
Heineken NV also is boarding the cannabis beverage train. One of their brands, Lagunitas, recently announced plans to roll out an IPA-inspired sparkling water line. The beverage will be infused with THC, the psychoactive chemical from cannabis plants and/or cannabinoid (CBD), a less intense compound from the plant. Dubbed Hi-Fi Hops, the new beverage is part of a joint venture between Lagunitas and Cannacraft, a producer of cannabis-based products in California. Hi-Fi Hops does not contain any alcohol and will only be legally sold in compliance with all relevant laws and regulations, the companies said.
On the other hand, delving into the cannabis market could pose a potential threat to traditional alcohol companies. A Bloomberg Intelligence report from February cited research indicating that retail sales of beer and wine experienced a “sharp decrease” in U.S. states that have legalized medical marijuana.
Although it is of high-interest, the cannabis-infused beverage market still has a long way to go. With recreational use only being legal in nine states and Washington, D.C., it puts innovative companies in a distribution bind that can be lifted solely by its legalization. Yet, because beverage stalwarts like Constellation and Heineken are setting the tone for the industry, it will be interesting to see if other beverage brands bite the bullet and join the movement.
Going forward, consumers should be on the lookout for the legalization of marijuana, as that will be vital to this new beverage segment. As industry experts are predicting, it will only be a matter of time before legalization happens. So those who wish to partake can enjoy a plethora of alcoholic and non-alcoholic cannabis-infused beverages.