Diageo Plc, the world’s largest alcohol company, is meeting with Canadian marijuana producers as it prepares to add marijuana-infused beverages to its product line.
Diageo, which sells brands such as Guinness beer and Crown Royal whisky, is following other major alcohol players such as Molson Coors Brewing Co. and Constellation Brands Inc. into the cannabis market.
Several Canadian media outlets have reported that Diageo has met with several Canadian marijuana producers over the summer to gauge their interest in a deal for a potential investment or collaboration to create new cannabis-infused beverages. A senior management team from Diageo was also spotted at a Toronto marijuana conference last week and held several meetings with cannabis companies in the city to discuss possible partnerships.
It’s unclear how advanced the talks between Diageo and a potential cannabis partner are. One cannabis executive who recently held discussions with Diageo to partner with the alcohol giant said that the company will likely take its time to evaluate the sector and settle on a partner in the marijuana space after Canada legalizes marijuana this October.
In July, Dan Mobley, Diageo’s Corporate Relations Director, said the marijuana sector was “still in very early days,” during a conference call with journalists. “We are monitoring very closely and seeing how the market is evolving,” said Mobley.
Diageo reported a 1% decline in volume growth in fiscal 2018 compared to the prior year, while sales edged 2% higher, according to its most recent annual results. In North America, the company’s second-biggest market behind Asia-Pacific, volume growth rose 2% in 2018, while total sales declined 1%.
Alcohol and cannabis industries have grown closer in recent months. Earlier in August, Molson Coors announced it was forming a joint venture with Hydropothecary Corp. to develop cannabis-infused drinks. Meanwhile, Constellation Brands increased its ownership interest in Canopy Growth Corp., announcing it would make a $5-billion investment that will give the alcohol producer a 40% stake in Canada’s largest licensed cannabis producer.
Marijuana and cannabis products are expected to generate $75 billion in global sales by 2030, according to Canadian government forecasts.
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