Legal highs: The drinks companies taking on cannabis
As Canada marks the legalisation of recreational cannabis today, we round up the drinks companies that have been linked to or have confirmed investment in the industry.
Canada has legalised recreational cannabis today (17 October) making it the second country after Uruguay, which passed legislation in 2013, to impose such a measure.
Potential customers must be 18 or over in order to purchase the drug. Cannabis possession was first criminalised in Canada in 1923, but medical marijuana has been legal in the country since 2001.
It is hoped legalising the drug will raise C$400m a year in tax revenue.
The legislation, which was passed in the Canadian Senate in June, was part of a 2015 campaign promise by Prime Minister Justin Trudeau.
However, only cannabis purchased from officially recognised stores will be legal, while laws will differ across the country’s 10 provinces and 3 territories.
Adults can now legally buy cannabis oil, seeds, plants and dried cannabis from licensed producers and retailers and possess up to 30 grams of dried cannabis in public.
Across the border, 9 US states and Washington DC have legalised recreational cannabis to those aged over 21. Medical marijuana is legal in another 30 states.
What Canada’s decision means for US border states that have not legalised the drug remains to be seen. Last month, Michigan has voted to ban all cannabis-infused drinks in a pre-emptive move should the state legalise marijuana for recreational use this month.
A recent report on the sales of cannabis-infused food and drink products, jointly published by two of the sector’s research firms Arcview and BDS Analytics, found that the industry has great potential for growth.
It revealed that ‘edibles’ sales are on track to reach more than $4.1 billion by 2022, with spending on the category reaching $1 billion in 2017 in the United States and Canada.
Scroll through to see the drinks companies that have already expressed an interest in the sector.
Constellation Brands jumped on the weed wagon early, purchasing a 9.9% stake in Canadian marijuana company Canopy Growth Corp for £141 million back in October 2017.
The owner of Corona, Kim Crawford Wines and Ballast Point has plans to make cannabis drinks, and this year increased its stake in Canopy Growth, investing US$4 billion to acquire a 38% share of the business.
Constellation’s confidence in the sector appears to be paying off already, with the value of its shares in the cannabis company already worth an extra $1.3 billion, as reported in its second quarter results.
Since November last year, shares in Canopy Growth have climbed more than 285%, with the producer confirming that “$1.3 billion unrealised gain has been recognised since investment in November 2017.”
“Our $4 billion investment in Canopy Growth provides us with a strong foothold in the emerging global cannabis market, which could be one of the most significant growth opportunities of the next decade,” Rob Sands, Constellation’s CEO said in a statement.
In September this year, reports emerged that drinks giant Coca-Cola was eyeing up a move into cannabis, having reportedly been in talks with Canadian cannabis producer Aurora to develop drinks infused with CBD.
“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world – the space is evolving quickly,” Coca-Cola spokesman Kent Landers told Bloomberg News.
Heather MacGregor, a spokeswoman for Aurora, told Bloomberg that the cannabis producer is interested in entering the CBD-infused drinks space.
Southern Glazer’s Wine and Spirits
In May this year, it was announced that the Canadian branch of drinks distributor Southern Glazer’s Wine and Spirits had created a separate business arm dedicated to cannabis products.
Great North Distributors, a subsidiary of Southern Glazer’s, confirmed a deal with marijuana producer Aphria to distribute its range across Canada from 17 October.
Aphria’s chief executive, Vic Neufeld, said that the drinks firm has the “right resources and expertise to allow us to capitalise on the opportunities in the industry on a national scale”.
In a release today as it launched its first official day of cannabis sales, Great North Distributors claimed that it is Canada’s first national sales broker for legalised cannabis.
Doug Wieland, executive vice president and general manager of Great North Distributors said: “This is an exciting day in Canada and we are ready to put our experience and expertise to work to ensure the efficient, legal, and safe distribution of cannabis in Canada. We not only were the first national sales broker for legalised cannabis, but I’m confident that our preparations over the past few months will make us the best”.
In August, there were reports that Diageo was in talks with at least three leading cannabis companies as it considers adding marijuana-infused drinks to its portfolio.
BNN Bloomberg reported that it had received the information from “multiple sources familiar with the matter”.
It’s understood that the owner of Gordon’s Gin and Guinness has met with several Canadian companies to discuss a possible investment or collaboration to create new cannabis-infused drinks.
A spokesperson from Diageo, however, refused to comment on the reports, but did add: “As we’ve said before, we are monitoring this space closely”
Also in August, brewing giant Molson Coors confirmed a deal with medical marijuana firm The Hydropothecary Corporation to launch a standalone startup business which will develop “non-alcoholic, cannabis-infused beverages for the Canadian market following legalisation”.
“We decided entering the cannabis space would provide us with a real growth opportunity,” Frederic Landtmeters, CEO of Molson Coors Canada, told Bloomberg.
He also revealed that Molson Coors chose Hydropothecary in light of its work in research and development, its loyal customer base and its strong brand.
US craft beer brand Lagunitas, owned by Heineken, launched an “IPA-inspired, THC-infused sparkling water,” in June this year.
Hi-Fi Hops came about through a collaboration between cannabis company AbsoluteXtracts and Lagunitas. It’s available in two versions, one with 10 mg of THC, and the other with 5 mg of THC and 5 mg of CBD.
“The idea of being a part of a no-calorie beverage infused with cannabis seemed like a perfect next step in our product innovation, and a natural way to marry our past with our future,” said Lagunitas CEO Maria Stipp.
Jeremy Marshall, Lagunitas’ brewmaster, added: “We often dream of hops and their cannabis cousin partying together at their family reunion. We wanted to bring this party to life in a drink. We believe that it’s high-time that good beer inspired a provocative yet refreshing tasting non-alcoholic alternative – bubbly, aromatic, bitter, fruity and herbaceous with no gluten, no carbohydrates and a smidge of California sun-grown cannabis in every sip.”
US multi-state wholesaler Breakthru Beverage announced that it had invested US$9.2 million in Canadian cannabis producer CannTrust in September, becoming the exclusive distributor for CannTrust products in Canada.
In a release sent out post-legislation in Canada, Breakthru announced the launch of its subsidiary Kindred Partners, a Toronto-based speciality cannabis brokerage.
Kindred will provide brokerage services and a route-to-market in Canada for CannTrust products.
David Prodanovic, Kindred’s general manager, commented: “CannTrust has a strong reputation in the medical cannabis field, and we are thrilled to partner with them in extending their reach to the recreational cannabis market. We believe this partnership provides a great opportunity for mutual, long-term growth in an emerging market and we look forward to growing our relationship”.
Last month, drinks producer Valiente teamed up with Californian cannabis-focused agriculture company Terra Tech to produce a non-alcoholic sparkling wine infused with cannabis called ‘IVXX’.
Terra Tech said the fizz boasts “a flavour profile similar to Champagne and will be marketed in luxurious packaging suitable for bottle service at a nightclub.”
According to Forbes, in addition to the cannabis-laced sparkling wine, the two companies are developing a whole host of cannabis-infused drinks under the ‘IVXX’ brand, including a non-alcoholic cider and cherry-lime sparkling water.
Keen to make the most of the growing trend for cannabis drinks, Terra Tech’s CEO, Derek Peterson, plans to build a large-scale production and bottling facility in Santa Ana, California.
Other cannabis drinks
Among the other cannabis laced drinks products already announced are Rebel Coast’s non-alcoholic THC-infused Sauvignon Blanc, Province Brand’s beer brewed with the stalks, stem and roots of the cannabis plant and Blue Moon creator Keith Villa’s new business called Ceria dedicated to producing cannabis-infused craft beer.
Sweetwater Brewing have also launched a cannabis strain flavoured beer called ‘420 Strain: G13 IPA’ while South African’s Poison City Brewing has recently released a light cannabis lager.
In the UK, craft breweries such as Cloud 9 Brewing and Stockton Brewing Company are producing beer made with cannabis oil, while restaurants and bars including Madison on Park in San Diego and London restaurant Farmacy are making cocktails laced with CBD.