After the House of Commons and the Senate passed the Cannabis Act in June, the adult use of cannabis is finally set to be officially legal to go on sale on October 17 in Canada.
According to experts, this would result in billions of income for the legal cannabis industry in the country. They also believe that this will validate the expectation of investors in cannabis stocks.
Alcohol Industry Set its Sights on Cannabis-Infused Beverages
It is not only Canada, the acceptance of cannabis is growing globally. On the other hand, it might be one of the reasons why the alcohol industry’s growth is gradually slowing down. Sales in the alcohol business are not what it was used to be.
From time to time, innovation has provided a spark for big alcohol producers but they still find it tough to make a notable difference in recent years.
Another factor for this uncertainty is the legalization of cannabis throughout the globe that could actually compel customers to choose cannabis products as opposed to alcohol. With this development serving as a wake-up call for major alcohol companies, they started to consider joining rather than to fighting the legal cannabis movement.
In October last year, Constellation Brands, the maker of Corona beer and a number of other well-known alcohol brands became the first big alcohol company to partner with the cannabis industry.
They wound up taking a 9.9% equity stake in the cannabis company, Canopy Growth Corp. The deal grossed about $190 million and has since increased their shares and acquired more than $150 million in convertible debt from the cannabis company.
Molson Coors Brewing Co. just recently announced that it had partnered with Hydropothecary Corporation as its infused-beverage partner.
It was an interesting partnership for Molson Coors as Hydropothecary is not even included in the top 10 cannabis producers in terms of yearly production. Nevertheless, Hydropothecary’s huge deal amassing 200,000 kgs worth of cannabis supply in Quebec over a five-year period might be enough to make Molson Coors believe that the cannabis company is ready for this major partnership.
Molson Coors needed to take the jump as the company’s stock suffered through its worst single-day loss in 13 years after they reported their first-quarter operating results in May.
Welcome the Newest Major Player in the Cannabis-Infused Beverages
Another major alcohol company angling for the piece of the growing cannabis industry to create cannabis-infused drinks is Heineken.
On the surface, this beer giant’s worldwide influence seems to be paying dividends. Heineken’s combined international beer volume grew by up to 4.3% on the first quarter from last year with its strongest surge seen in the Asia Pacific where it rose up to 11.3% and the Americas by up to 6.8%.
But what is not seen on the surface is the high single-digit drop in beer volume at Heineken USA.
Even as the federal government in the U.S. still holds firm on its Schedule 1 classification of cannabis, the flourishing new industry in the U.S. is seen by Heineken as a profitable opportunity.
Last month, on July 30, Heineken launched a cannabis-infused beverage in some of the dispensaries in California. They did this through their wholly owned craft-brewed beer brand- Lagunitas.
Made to taste like beer, this brew has no alcohol content. Heineken hopes that this beverage catches on quickly with the U.S. market.
As of this date, the beverage has two forms- the first one is infused with 10 mg of THC, the psychoactive compound found in the cannabis plant that gives the users the feeling of “high”.
The other option is a hybrid version with 5 mg of THC and 5 mg of cannabidiol or CBD, the non-psychoactive compound of cannabis plants known for its medical benefits.
As outlined in the article on Business Insider, the drink is a bit costly than its competition at $8 per can. But according to the report, products are flying off the shelves.
Things to Consider when Buying Cannabis-Infused Drinks
Although it has become abundantly apparent that cannabis-infused beverages are one of the next evolutions for the cannabis industry, it is also important for the people who have invested in these awesome infusions to keep their anticipation in check.
As they have noted, it could still be a year or more before Canada gives the go signal and OKs the sale of edibles and cannabis-infused drinks in the country.
Though it does not slow down companies from creating ideas of such products, it slows down sales that could become substantial to alcohol companies like Constellation Brands and Molson Coors.
Furthermore, it is still not clear whether the sales from the beverages could be enough to really move the needle for these giants in the alcohol business.
That is to say, although it is really easy to get on the hype train about the possibility of the cannabis stocks and big alcohol brands tying the knot, there is still a lot of things that needs to be hashed out with regard to the development of the products, the date when they can officially launch, and other complex business figures and data.
Everything still has time to mature, and the revolution for cannabis-infused beverages will be no different.