We’re headed toward a much greener future, and I don’t mean sustainability.
There’s no doubt that the bar, nightlife and restaurant industry, along with beverage brands, has been pushing for more responsible business practices. But the green I’m talking about is cannabis, and, in turn, dollars.
The topic of legal recreational cannabis and how it relates to our industry was discussed by a panel of experts at the 2017 Nightclub & Bar Show. Toward the end of October last year, Constellation Brands announced their plan to acquire a minority stake of 9.9 percent in Canada’s Canopy Growth Corporation. That investment signaled that spirits, beer and wine distributor behemoths were no longer simply watching the cannabis space—they had done their research and chosen partners.
Several new developments are signaling a green wave to come.
Constellation Brands, as reported by CNBC, expects the cannabis industry to be fully legal in the United States in the (possibly near) future. To improve their position, they’ve poured another $4 billion dollars into Canopy Growth Corporation.
Constellation’s stake is now 38 percent, and they’ll have the opportunity over the next few years to invest another $5 billion, which would equate to a stake of over 50 percent.
Read this: The Cannabis Consumption Conundrum
Lagunitas, in which Heineken acquired a 50-percent stake in 2015, launched two THC-infused, IPA-inspired sparkling waters at the end of June. Named Hi-Fi Hops, these two beverages are sold through dispensaries in California and come in two expressions: one that has 10mg of THC, and another with 5mg of THC and 5mg of CBD.
Hi-Fi Hops is a collaboration between Lagunitas and Northern California cannabis product company AbsoluteXtracts. This no-calorie drink represents the first legal THC-infused beverage to come from a major brewer.
At the start of August of this year, Molson Coors answered the big question on everyone’s mind after Constellation made their move on the cannabis industry: Who’s next? Molson Coors has chosen to partner with HEXO, a.k.a. Hydropothecary. This partnership is expected to produce cannabis-infused beverages. However, given the innovative nature of both brands, other product types could be in the works.
Toward the end of August, Forbes reported that rumors of Diageo entering the cannabis space caused shares of related stocks to spike. Diageo has, so far, only announced that they’re watching the space. However, Bloomberg reported that the drinks giant has been in talks with three or more Canadian cannabis companies.
Again, the assumption is that Diageo would partner with a cannabis brand to produce infused beverages, but other products are certainly possible.
Read this: When the Smoke Clears: Cannabis Consumer Data for Operators
Earlier this month, Breakthru Beverage Group—the biggest spirits, wine and beer broker in Canada—and a leading Canadian cannabis producer executed a letter of intent for an exclusive partnership. Breakthru would represent specialty recreational cannabis products from CannTrust and establish a cannabis-focused sales brokerage company.
Canadians will be able to purchase and consume cannabis (excluding cannabis beverages and edibles) for recreational use legally on October 17. Cannabis beverages and edibles are expected to be legalized in Canada in 2019.
Just days ago, Coca-Cola expressed their interest in CBD-infused beverages. CBD is the ingredient in cannabis that reduces pain and inflammation but has no psychoactive effects (it won’t get you high). This announcement by Coca-Cola came on the heels of news that the Farm Bill is expected to pass through Congress.
Should the Farm Bill pass, hemp would no longer be a controlled substance. The hemp plant would be legal according to federal law. Why does that matter to Coca-Cola? CBD can be derived from hemp.
Just hours ago, the DEA reclassified CBD from Schedule 1 (illegal; high potential for abuse) to Schedule 5 low potential for abuse), so long as a CBD drug has a “finished dosage formulation” of less than 0.1 percent THC and meets the approval of the FDA. This means that CBD medicines can be prescribed and speaks to the future of CBD products.
“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers told Bloomberg News in an emailed statement. “The space is evolving quickly. No decisions have been made at this time.”
The statement didn’t include a comment on Aurora Cannabis, the Canadian cannabis producer rumored to be in talks with Coca-Cola. Aurora has experienced incredible revenue growth through the 2018 fiscal year, ending June 30 up 223 percent (C$19.1 million, USD$14.7 million) and up 206 percent for the year overall.
Read this: Will Culinary Cannabis make Marijuana Mainstream?
There are also beverage heirs entering the cannabis space.
The great-great-grandson of Adolphus Busch (co-founder of Anheuser-Busch), Adolphus Busch V, has entered the world of bud instead of the world of Bud. Many people would likely be shocked to learn that not a single Busch family member sits on the Anheuser Busch InBev or works anywhere inside the company. Busch V has founded Colorado-based ABV Cannabis, and the brand’s first product is a 300mg disposable cannabis oil vaping pen.
Ben Kovler, an heir to the Jim Beam bourbon throne, is the CEO of Green Thumb Industries. The company is based in Chicago, cultivates cannabis, operates dispensaries, and has gone public in Canada. Billionaire investor and hedge fund tycoon Leon Cooperman has invested in Green Thumb.
The maneuvers that major beverage companies are making in the cannabis space indicate that it’s just a matter of time until those in the bar, nightlife and restaurant industry will have to reckon with the impact.
There are also the moves being made by investors, beverage scions, and Congress to watch. Beverage brand giants—and future cannabis millionaires and billionaires—have the financial, legal and political resources to invest in cannabis and legislation to profit from it.
Not long from now, you may just find yourself selling Budweiser Bud and BLTs with a side of CBD.