For reasons that really should not require a great deal of explanation right now, tens of thousands of people all across California are wondering how the state’s new cannabis industry will look. It’s not to say that the legal marijuana industries of numerous other states aren’t important, it’s simply that they pale in comparison to that of CA. In terms of size, power, influence and value, this is one state-wide cannabis industry that the entire world is going to be watching.
So of course, it’s natural to question exactly how things will look a little further down the line, along with how the industry will integrate with others.
The Campaign Trail
Cast your minds back just a short time to the all-important November 8 vote and you’ll probably remember hearing plenty of talk from those who didn’t want recreational cannabis to be decriminalised. You may also remember that one of the most vigorous and indeed influential of all anti-cannabis campaign groups was none other than the alcohol industry. The reason being that as far as beer-makers were concerned, more cannabis out in the wild would mean reduced demand for alcohol. The long and short of it being that just as long as it meant they’d keep getting paid, to hell with the greater good.
Just as business has always worked and will always continue to work!
But anyway, one thing they all failed to take into account was that in states where recreational cannabis has so far been legalised, beer sales have actually increased very slightly. But then again, it’s not as if anti-cannabis campaigners in general base their arguments and criticisms on facts, statistics, science and hard evidence.
The Missing Ingredient?
So it seemed as if even in the event of recreational cannabis legalization, which has of course now happened, the alcohol industry in general would be doing anything but embrace it. Which is why it has come as quite a surprise to some to hear that one of the biggest alcohol brands in the United States is giving serious thought to bringing cannabis well and truly into its own operations.
Constellation Brands is the absolutely enormous company behind Svedka vodka and Corona beer. Early thinking about exactly what the future may have in store for its own products and revenue streams, they’re apparently mulling over a new ingredient that could help entice the cannabis crowds.
And that ingredient is, of course – cannabis.
“We’re looking at it,” Constellation Chief Executive Officer Rob Sands said in an interview.
“There are going to be alcoholic beverages that will also contain cannabis.”
The Perfect Mix?
Now, the question as to whether or not it is technically a good idea to mix alcohol and cannabis is one that has an entirely different answer, depending on who you ask. For some, it’s a case of one or the other and never the two shall meet. For others, indulging in a night of heavy cannabis use without plenty of beer on-hand represents an almost unthinkable scenario. Even the experts don’t seem to be able to put a concrete answer to things, given the way in which the combination of cannabis and alcohol tends to have an entirely different impact from one person to the next. Nevertheless, the idea of bringing cannabis into the world of alcoholic beverage production isn’t an idea that is likely to sit pretty with cannabis critics.
Which is of little to no consequence, given the way in which the legalization of recreational cannabis in California, Nevada, Massachusetts and Maine means that there are now eight North American states where massive experimentation with cannabis products is an inevitable certainty. And given the fact that a full 20% of the American adult population now lives in a region where recreational cannabis is legal, it’s a subject that really isn’t going to go away anytime soon.
But back to the initial point with regard to the alcohol industry regarding legalized cannabis as a threat. It’s clearly a matter of perspective, as in the mind of Mr. Sands, it actually represents an extraordinary opportunity. By the year 2026, it is estimated that the national cannabis industry in the United States will be worth more than $50 billion. Suffice to say, this is one incredibly lucrative market it makes more sense to try and snag a piece of for yourself, as opposed to just sitting around, worrying and complaining about it.
“Why wouldn’t big business, so to speak, be acutely interested in a category of that magnitude?” Mr. Sands said.
“If there’s a lot of money involved, it’s not going to be left to small mom-and-pops.”
Of course, the folks running Constellation Brands are currently facing another relative unknown, which in this instance they have absolutely no control over. The reason being that they, just like many other business is like them, have found themselves in a somewhat vulnerable position in the wake of Donald Trump being elected president of United States.
Is it ever going to not feel weird saying that?!
The problem being that more than half of all sales chalked up on an annual basis by Constellation Brands come from Mexican imports. Needless to say, the fact that Trump mentioned on more than one occasion the idea of building a physical wall between the United States and Mexico and doing a number on the North American Free Trade Agreement doesn’t exactly bode well for those who rely on dealings with Mexico.
On the plus side, Mr. Sands pointed out the rather obvious fact that the actual legislation that is likely to follow the installation of the Trump administration will in all likelihood be extremely different to anything that was promised during his campaign. In fact, he believes that the formation of a unified republican government will actually be beneficial for his business.
So this is one alcohol company that certainly doesn’t seem to believe that cannabis legalization represents a negative for the booze industry. Nevertheless, Constellation Brands is clearly in the minority. Prior to the election, more than $75,000 was contributed to the anti-cannabis campaign camp by two of the biggest alcohol trade groups in Massachusetts, while the Wine and Spirits Association of Arizona likewise contributed $10,000 to anti-cannabis campaign groups. This, despite the fact that not only have alcohol sales been in no way negatively affected by legalized cannabis, but that official statistics show that the number of drinkers who also use cannabis regularly has grown significantly over the last 10 years.
Roughly translated, there is an enormous and growing market for both, meaning that one should not be interpreted as a threat to the other.
“People who are using cannabis may be disinclined to drink as much as they might have otherwise, but maybe they weren’t going to drink in the first place and then they drink something,” Mr. Sands said.
“Maybe the whole thing will work out synergistically.”
Still, it remains to be seen what happens long-term as we really are only just at the doorstep of the legal recreational cannabis revolution of the United States. The simple fact of the matter is that legal cannabis is here, meaning it’s up to key industry players like these to find a way of making things work for everyone.