Several big players in the tobacco, alcohol and pharmaceutical industries have bought into the cannabis industry already.
- Altria, the world’s largest tobacco company and owner of Philip Morris and Marlboro cigarettes, made a $1.8 billion investment in Canadian cannabis producer Cronos for 45% of the company. The deal comes with warrants for Altria to provide an additional $1.05 billion for a 55% stake in Cronos.
- Alcohol giant Constellation Brands, maker of Corona beer, bought a 38% stake in the largest Canadian cannabis company, Canopy Growth, for $4 billion, in August 2018. This deal, was preceded by a smaller $200 million investment in October 2017 by Constellation into Canopy. The deal also came with warrants that will allow Constellation to buy a majority interest in Canopy.
- Novartis, the pharmaceutical giant, entered into a strategic arrangement with Tilray one of the largest “medicinal” cannabis companies in the world.
Just one alcohol giant, Constellation Brands, has pumped around $5 billion into the emerging Big Marijuana.
Big Alcohol investements in commercialized cannabis
Many giants of the alcohol industry are pushing into commercial cannabis in the frenzy to recapture waning interest of millennials.
As the younger generations are ditching booze, staying alcohol-free longer and in greater number, becoming suspicious of unhealthy consumer commodities and pursuing a healthier more sustainable way of life, the alcohol industry begins to feel the pressure on their profits. Therefore, cashing in on the new commercial cannabis market looks like a matter of self-preservation.
Constellation Brands – early signs of unethical marketing
Reports emerged already in 2018, as Constellation Brands nearly $5 billion investment in commercialized cannabis materialized, that they company is pushing harmful marketing: Canopy Growth CEO Bruce Linton for instance said that one potential product could be a calorie-free drink infused to “help fight depression”, according to Maxim.
Constellation Brands was the first Big Alcohol giant to push into commercial cannabis, pumping loads of cash (nearly $5 billion) into Canopy Growth in order to bring THC-infused brews to market in North America.
Molson Coors, the second-largest beer maker in North America, invested in September 2018 into a joint venture called Truss Beverage Co. with Hexo Corp., a Canadian cannabis industry giant. In the end of August 2020, they launched the first line of cannabis infused beverages in Canada, including products called “veryvell”, or “little victory” with potent THC levels.
Molson Coors CEO Mark Hunter said in 2018, the cannabis market would up to $10 billion in Canada alone. Cannabis-infused beverages could account for as much as $3 billion, or 30% of the total market, and Molson Coors was pushing to ensure their share, according to Globe Newswire.
Anheuser-Busch InBev announced in December 2018 it will invest $100 million in Tilray, a Canadian cannabis producer. A-B InBev’s Labatt Breweries of Canada will work with Tilary subsidiary High Park Co.
According to the announcement, each company plans to invest up to $50 million to research cannabidiol, or CBD.
The joint venture first brought CBD-infused non-alcoholic drinks on the Canadian market in the end of 2019, but is also investing into research to launch beverages containing THC in the future, according to The Star.
In July 2018, Heineken’s newly acquired brewery Lagunitas introduced a THC-infused drink in California, USA. Heineken, the second largest beer maker in the world, was the first beer giant to launch a beverage with THC, the active ingredient in cannabis. Lagunitas and the Californian commercial cannabis company Cannacraft collaborated to develop the IPA-inspired water with THC, called Hi-Fi Hops.
At the time, Just Drinks wrote:
Hi-Fi Hops is a landmark launch in the drinks world, becoming the first THC-infused beverage to come out of a mainstream alcohol company.”Andy Morton, Just Drinks write, June 28, 2018
In 2019, California was still the world’s largest cannabis market, according to Globe Newswire.
Also Diageo was reported in summer 2019 to be pursuing a deal with a Canadian cannabis firm, according to BNN Bloomberg. The liquor giant was holding serious discussions with at least three major commercial cannabis producers.
Diageo, too, seeks to add marijuana-infused beverages to bolster flat volume growth in its portfolio of global brands, multiple sources familiar with the matter have told BNN Bloomberg.
Diageo’s push into commercial cannabis would mean a further step to Big Marijuana firmly arriving, fueled by investments of other addiction industries, especially Big Alcohol. Diageo is among the largest alcohol producers in the world.
Diageo reported a 1% decline in volume growth in fiscal 2018. In North America, Diageo’s second-biggest market behind the Asia-Pacific region, total sales declined 1% – prior to the global coronavirus pandemic, highlighting the additional pressure the alcohol giant might be under in 2020.
Other industries pumping cash into Big Marijuana
Other partnerships between the growing commercialized cannabis industry and the corporate consumption complex of unhealthy commodity industries include the following:
- Molson (a subsidiary of Coors) announced an arrangement with Hydropothecary to create a line of non-alcoholic cannabis infused beer.
- Coca-Cola is rumored to be exploring a partnership with Aurora that would allow them to make CBD-infused beverages.
There has been major merger-and-acquisition activity among the commercial cannabis industry in the United States since 2018, signalling preparations of the U.S. cannabis industry to pursue commercial arrangements with other major addiction industries similar to those in Canada. Already, in-roads have been made.
- GW Pharmaceuticals, a British-based company focused on the development of cannabinoid based medications got “Epidiolex”, a CBD-based drug derived from the cannabis plant approved by the (Food and Druf Administration (FDA) as a prescription medication in the United States. The company’s first product, Sativex, has already been available in pharmacies across Europe and Canada for nearly a decade.
- Big Agriculture player Scotts Miracle-Gro has also joined with the commercial cannabis industry.
Other major companies not limited to the alcohol, tobacco and pharmaceuticals industries are also eyeing the emerging Big Marijuana. This includes sugar-sweetened beverage companies, tech companies as well as major delivery service providers such as Uber Eats.
Urgent priority action is needed from the global public health community to avert the threat of a third legal and commercially super-charged drug. Already the alcohol and tobacco industries are causing a massive global burden.
Beverage Daily: “Molson Coors reveals Truss’ cannabis-infused beverage line-up” (2020)
Food Supply (Swedish): “Heineken lanserar marijuana-vatten” (2018)
Just Drinks: “Heineken’s in-house expert drives cannabis strategy” (2018)