It won’t be the first or the largest alcoholic beverage maker to look at marijuana as a means to staunch falling sales, and that may be part of the reason that sources are revealing that Molson Coors Brewing Co. (NYSE: TAP) is searching for a partner to collaborate with on brewing up a cannabis-infused beer. Beverage maker Constellation Brands Inc. (NYSE: STZ) paid $245 million last year for a 9.9% stake in Canada’s Canopy Growth Corp. (NYSE: CGC) with an eye on the same prize.
Retail beer sales have been falling in markets where marijuana sales are legal — down 7% according to marijuana industry research firm Cannabiz Consumer Group. Big beer companies like Molson Coors and Constellation have to think of something, and marijuana might be just that something.
BNN Bloomberg reports that Molson Coors has held discussions with as many as four cannabis companies including two of Canada’s largest growers (behind Canopy): Aphria and Aurora Cannabis, both of which trade on the Toronto Exchange. A deal between the brewer and one of the growers is possible by the end of this year.
Even if an agreement is reached, however, that doesn’t solve all the brewers’ problems. Buying a six-pack and taking it home is one way to consume beer. Another way is to load up a cooler and take it to the park. Or you could visit your local gin joint or your favorite craft-brew pub.
A cannabis-laced beer (or any other cannabis product) can currently only be legally consumed in the privacy of your own home. For the big brewers, a cannabis-infused beer may not be sufficient to bring those errant customers back. One of BNN Bloomberg’s sources said that Molson Coors is looking for a cannabis partner to “produce marijuana with a fast-infused reaction that can mimic the experience of drinking alcohol in a relatively quick time span, such as 15 to 20 minutes.” Getting drinkers high faster does not seem like winning plan for more sales.
Cannabiz Consumer Group noted last year that craft beer sales take only about half the sales punishment as the big national brands. The firm’s founder, Rick Maturo, explains:
With craft beers, consumers have a wide assortment of brands to choose from, so their decision process and affinity for craft is often tied to the experience and exploration to discover new tastes and varieties – they are sensation seekers and less risk-averse. This makes cannabis much more likely to enter their consideration set, but not as likely to be perceived as a substitute for the craft beer ‘hunt’. This decision-making paradigm differs from domestic beer where choice is predicated on familiarity, availability, value, and mood enhancement. In these instances, cannabis is much more of a viable alternative and has additional benefits — no hangover, fewer calories, all natural ingredients, pain relief, and a perception of less risk for addition or harm to their health.
But craft brewers and national brands alike face the likelihood that public consumption of marijuana products is the next step for states like Colorado and California, where recreational pot use is legal. Beer makers have to get a stake in the ground before that happens.