Despite the lows, brewers will continue to mull cannabis joint ventures

Cocaine-laced wine was once a popular “nerve tonic”. Now drug-infused drinks are making a comeback. Some marijuana-infused beverages promise to ease pain. Others advertise the buzz of alcohol without the calories or the hangover.
Take Ontario-based Tilray. It bills its cocktails as a “healthy and delicious way to enjoy the benefits of smoke-free cannabis”.
Investors should be prepared for lows, as well as highs. Tilray’s shares have more than halved since their September high. But big drinks companies are staying focused.
The legal cannabis market could grow worldwide from $US12 billion in 2018 to $US166 billion by 2025.
Last year, beer brewer AB InBev entered a $US100 million ($141 million) joint venture with Tilray, Constellation took a stake in Canopy Growth and Molson Coors signed a joint venture with cannabis producer Hexo. Lagunitas, owned by Heineken, launched Hi-Fi Hops — containing a “smidge of California sun-grown cannabis in every sip”.
There are grounds for caution. The drug is likely to remain illegal in large parts of the world and is associated with increased risks of schizophrenia. Coca-Cola, which itself originated from an alcohol-free version of cocaine wine, weighed up the cannabis drinks market but has decided against it.
But brewers are right to take the drug seriously. More than a third of alcohol drinkers also take cannabis in US states where it is legal, says research groups IWSR and BDS Analytics.
Millennials often prefer it to booze. The legal cannabis market could grow worldwide from $US12 billion in 2018 to $US166 billion by 2025 if it capitalises on “wellness trends”, says Euromonitor.
The risk to drinks companies is not universal. Globally, cannabis sales will be just 1 per cent those of alcohol by 2027, says Jefferies. But it is concentrated in the US.
Up to 6 per cent ($US10.7 billion) of beer retail sales are at risk. As the promoters of cocaine wine discovered, social mores can change.
Nearly 7 per cent of men die from alcohol-related health problems each year. The obesity crisis is fuelling a backlash against sugar. Cannabis could end up being more socially acceptable than both.