Cannabis ‘the big green elephant in the room’ for drinks sector claims report

By Rob Brown

Published: 05 June, 2018

The global alcoholic drinks industry is facing a moment of reckoning as cannabis laws across the world continue to be relaxed.

That’s according to the author of a report that claims global drinks volumes have hit a five-year high, driven in part by a recovery in demand from China and Russia.

“The category reaching a five year high shouldn’t be seen as a reason for complacency,” said Euromonitor International alcoholic drinks industry manager Spiros Malandrakis.

“The biggest disruptor on the horizon is what I call the ‘big green elephant in the room’ – the legalisation of cannabis. We’re starting to see hybrid products in the US that contain cannabis and alcohol. This will be the big question for the industry in the next 10 years.”

Canada is expected to ratify a bill legalising recreational use of marijuana on Thursday 7 June.

Constellation Brands’ December acquisition of a minority stake in Canopy Growth, the world’s only publically traded cannabis company, and Blue Moon Brewing Co founder Keith Villa’s new alcohol-free cannabis beer venture Ceria add weight to this prediction.

“Today, the opportunity and the demand are here, inviting Americans to enjoy a more social way of consuming cannabis – by drinking rather than by smoking it or through ingestion of edibles,” Villa said in April.

It’s not just in the US. Uruguay became the first country to legalise recreational cannabis use back in 2013 and laws are being relaxed from Australia to Europe (although in most cases recreational use is still prohibited).

UK parliament is due to debate the issue this week following a proposal that the drug should be partially legalised for medicinal purposes. Right wine think tank the Adam Smith Institute estimates that up to £1bn could be generated in tax if cannabis were regulated like alcohol.

Euromonitor International estimates that global drinks volumes hit 252.8 billion litres in 2017, up 1% on the previous year. Spirits volumes increased by 1.5%, driven in part by the continuing growth of gin. Wine volumes grew 1.4%.

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