Diageo (LON: DGE) chief executive Ivan Menezes has ruled out an imminent move into the fast-growing cannabis sector after revealing that legalization has not affected sales in Canada.
The world’s largest spirits producer has been linked with a move into marijuana over the past year after several of its peers have taken the plunge. Corona lager owner Constellation Brands has invested almost £4 billion into Canopy Growth, while multinational brewer AB InBev has linked up with Tilray, and Molson Coors has a joint venture with HEXO.
Diageo owns a huge suite of famous brands, including Johnnie Walker, Smirnoff, Gordon’s, Tanqueray, Talisker, Don Julio, Ketel One, Captain Morgan, Bulleit, Baileys, and Guinness. However, it still accounts for less than 5% of the global alcohol market and it said growing gin and whisky sales across the globe would remain its priority.
Deirdre Mahlan, the president at Diageo North America, said that Canada’s decision to legalize adult use cannabis in 2018 has not had “any discernible impact” on sales in the country. When asked about drinks infused with CBD and THC, she said she would not call them a threat.
Bob Pease, president and chief executive at the Brewers Association, has previously claimed that smartphones and dating apps represent a bigger threat to beer sales than marijuana. He pointed to growing sales in Colorado as proof of the craft beer sector’s resilience.
However, a survey of 1,800 adults, published by researchers at Cowen and Co this week, suggested that Canadians are enjoying more cannabis than ever before and that beer sales are dwindling. In October, concentrates will be legalized, allowing retailers to sell THC-infused drinks, and this could damage alcohol sales.
Many senior figures within the alcoholic drinks industry talk fearfully about losing a “share of buzz” and many are investing in the cannabis sector. Heineken has released an IPA-inspired, alcohol-free, THC-based Lagunitas drink called Hi-Fi Hops.
A number of smaller producers are infusing their beers, wines, and spirits with CBD, which is legal in a wide range of markets across the globe. CBD wineries are springing up across the U.S., Canada and Europe, and the trend looks set to grow in the years ahead.
Diageo chief Menezes said he is watching the North American cannabis craze with interest, but that the firm will not rush into the industry.