AB InBev watching the legal marijuana market closely
By Nick Hedley - Nov 1st 2018, 10:04
The world’s biggest brewer, Anheuser-Busch InBev (AB InBev), says it is keeping a close eye on the burgeoning cannabis market as some of its peers forge ties with marijuana companies.
“We are closely following legalisation trends in the cannabis industry in North America – Canada and the US,” a spokesperson for the group said, asking not to be named.
AB InBev, which is in the process of integrating SABMiller after buying the brewer for $100bn, said its revenue grew 4.5% to $14.7bn in the September quarter thanks to slightly higher beer volumes.
But the stock plunged 10.59% after it said it had to cut its interim dividend to pay off debt.
“Recent trends in Canada and in certain US states toward legalisation of recreational marijuana are an important development – not only for us as a beer company but for society as a whole,” the spokesperson told Business Day.
There remained “many unknowns” regarding the long-term commercial and societal effects of legalisation.
“It is our hope that the public health community and policymakers examine this issue carefully so that marijuana is regulated appropriately if and where it’s legal.”
Major brewing giants are increasingly linking up with marijuana producers as countries legalise the plant. This is partly because brewers are in some cases selling less beer where cannabis has been legalised.
A 2017 study by Georgia State University found that alcohol sales had fallen 15% in US states where medicinal marijuana had been legalised.
In August, Constellation Brands, which makes Corona beers in the US, invested another $4bn into Canadian marijuana company Canopy Growth.
Diageo, which makes Guinness beers and Johnnie Walker whiskey, has reportedly been in talks with Canadian marijuana producers about a possible deal, and Molson Coors Brewing Company, through its own joint venture, plans to make cannabis drinks in Canada.
Canada legalised the recreational use of marijuana earlier in October. Even some South African firms are testing the waters after the Constitutional Court decriminalised the private use of cannabis.
Durban-based craft brewery Poison City Brewing, backed by investors including RCL Foods CEO Miles Dally and Spar CEO Graham O’Connor, launched SA’s first beer made with cannabis in September.
The company sells a lager containing hemp — a variety of the cannabis sativa plant largely devoid of mind-altering ingredients — in major liquor chains.
Soft-drinks giant Coca-Cola plans to use CBD oils – the non-psychoactive ingredient in marijuana – in its beverages, according to a recent report by Bloomberg.
The company was reportedly in talks with Canadian marijuana producer Aurora Cannabis to develop the beverages.
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