The Association Between Big Alcohol and the Cannabis Industry Continues to Grow

CannaRoyalty is a cannabis products company based in Canada that is focused on building branded marijuana products for distribution into Canadian and US markets. In a recent interview with Marijuana Business Daily, Mr. O'Neill noted that it was only a matter of time before much of the alcohol beverage industry becomes significantly involved in the cannabis industry.

Mr. O’Neill believes his background in the alcohol beverage industry will provide value-add to CannaRoyalty over time as the company and cannabis industry continue to evolve. Clearly, many in the industry agree that the alcohol beverage companies with nationwide distribution provide the most scalable business model to market branded cannabis products of consistently high quality into the growing marketplace. However, many of the larger alcohol beverage manufacturers and distributors are traditionally more conservative companies that are still “slow-walking” any future involvement with the cannabis industry until they become more comfortable with what, if any, steps the federal government plans to take going-forward to regulate the cannabis industry.

On a related front, however, Lagunitas Brewing Company, which is a US subsidiary of international brewer, Heineken NV, has just announced that it plans to begin marketing an IPA-inspired sparkling water line infused with THC and/or CBD, which will be called “Hi-Fi Hops.” Lagunitas intends to partner with CannaCraft, a producer of cannabis-based products in California, to make its cannabis-infused sparkling waters. Hi-Fi Hops won’t contain any alcohol, and will be sold in California in compliance with applicable laws and regulations.

In addition, we previously reported that Constellation Brands, a major distributor of alcohol beverages, had agreed to purchase a 9.9 percent minority stake in Canopy Growth, a Canadian medical marijuana company. As part of the investment, Constellation will utilize Canopy Growth’s expertise to help develop cannabis infused drinks that will be sold in Canada, as well as in the US if and when cannabis becomes legal for recreational use nationwide.

In summary, we expect the growing partnership between the alcohol beverage industry and the cannabis industry to continue to grow, especially once the federal government provides greater clarity on how cannabis products will be regulated in the future.