Contrary to what some people believe about the cannabis industry threatening the alcohol industry, the two addiction industries are increasingly joining forces to maximize profits. More than seeing Big Marijuana as a threat Big Alcohol sees this new industry as an opportunity to target new groups of people and expand its reach and profits.
There are three main reasons why Big Alcohol views Big Marijuana as an opportunity:
- The projected growth of the cannabis market means opportunities for Big Alcohol to create new innovations and expand their market and profits.
- Research into consumer behavior shows that people pair addictive products, rather than replace one for the other.
- More people who use cannabis are pairing it with alcohol.
- Big Alcohol and Big Marijuana are pushing “premium lifestyle habits” with cannabis incorporated products.
- “Premiumization” has been a longstanding strategy by the alcohol industry to maximize profits.
The cannabis industry in the United States is set to rake in US$46 billion in revenue.
And the global cannabis industry is set to bring in US$61 billion by 2026.
Big Alcohol companies have been quick to stake their claims on this chunk of profits through investments and new products.
Big Alcohol’s investments in Big Marijuana
- Constellation Brands invested nearly $5 billion in Canopy Growth to bring THC-infused beverages to North America.
- Molson Coors invested in a joint venture called Truss Beverage Co. with Hexo Corp., a Canadian cannabis industry giant.
- At the end of August 2020, they launched the first line of cannabis infused beverages in Canada with potent THC levels.
- AB InBev announced a $100 million investment in Tilray in December 2018. The venture brought CBD-infused non-alcoholic drinks to the Canadian market at the end of 2019. And the alcohol giant invested in research to launch beverages containing THC in the future.
- In July 2018, Heineken’s newly acquired brewery Lagunitas introduced a THC-infused drink in California, USA.
- Big Beer brand Pabst Blue Ribbon launched a new THC-infused non-alcoholic seltzer in 2020.
- Diageo has also expressed its interest in marijuana-infused beverages.
These collaborations between Big Alcohol and Big Marijuana show that transnational alcohol companies are far from threatened by the growing new cannabis industry. Instead, the alcohol industry has been finding ways to increase its profits through new addictive products.
Growing normalization and prevalence of addictive products
As more people start using cannabis, consumer behavior research is showing that they are increasingly pairing it with alcohol. Thus, both cannabis and alcohol become more prevalent in ever more contexts, settings, and occasions.
Today, more consumers are pairing cannabis with alcohol than ever before, especially when relaxing or hanging out with friends,” said Roy Bingham, co-founder and CEO of BDSA, which provides market research solutions for the global cannabinoid industry, as per The Drinks Business.Roy Bingham, co-founder and CEO of BDSA
As per BDSA’s latest consumer data chances are high for the alcohol industry to grow with the growth of the cannabis industry.
This is because,
- Consumption of cannabis by those who use alcohol is on the rise.
- This means consumers are using both substances together.
- According to BDSA’s data, the proportion of people pairing cannabis with spirits or liquor increased from 12% in spring 2018 to 22% in spring 2022.
- The share of consumers who report cannabis pairing with alcoholic cocktails doubled to a total 20% in spring 2022
- Consumption occasions for alcohol and cannabis differed just enough among consumers so that rising cannabis use will not threaten alcohol sales too much.
The cannabis industry is aligning its products with “premium lifestyle habits” for example during working out or fine dining. For Big Alcohol this is a new opportunity to target new groups of people in new settings with cannabis-infused beverages, and thus, maximize profits.
Addiction industries work in similar methods and team up to maximize their profits. As Movendi International has reported before, Big Alcohol, Big Tobacco and Big Pharma are all in on Big Marijuana and have been investing in this new addiction industry.
The strategies used by Big Marijuana are very similar to the strategies of Big Alcohol. For instance, a study published in the journal Addiction found the cannabis industry’s activity in New Zealand provided the following signs of industry influence strategies:
- The medicinal cannabis industry has,
- associated the establishment of a legal cannabis sector with regional economic development and employment,
- supported lobbying for drug legalization,
- funded NGOs involved in lobbying for drug legalization,
- established research partnerships with universities,
- invited ex‐politicians on advisory boards, and
- participated in government public sector partnerships.
This evidence shows that the legal cannabis industry is using strategies to influence the regulatory environment in New Zealand. This is quite similar to alcohol industry strategies globally.
The Drinks Business: “Experts reveal how the cannabis sector’s popularity will affect alcohol sales“