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Drugs & Leisure

The Smoke Out: Big Business Is Taking Over the Cannabis Industry

The inevitable is upon us. Big business is getting into the cannabis industry. Alcohol-beverage conglomerates, like Molson-Coors and Constellation Brands, makers of Corona, have very recently invested billions of dollars in the budding cannabis industry. And, as of the writing of this piece, the largest distillery in the world, Diageo, maker of Guinness and Smirnoff, is apparently courting three major Canadian cannabis players. The question is, "Why?"

For one, Big Alcohol views cannabis as a threat; it’s a competing intoxicating substance that helps people relax and unwind. In fact, in states with medical cannabis laws, alcohol sales have dropped 12.4 percent according to researchers at the University of Connecticut. What’s more, binge drinking has also dropped about 10 percent in states with adult use cannabis according to researchers at Cowen & Company—which for society, is a good thing, but for major players in the alcohol industry— it’s a risk.

I know for me personally, nothing says the end of the work week like a cold craft brew and dank, fat spliff. Jessica Lukas, Vice President of BDS Analytics, a leading cannabis data agency, tells Playboy that I’m not alone; 72 percent of cannabis consumers also drink alcohol. But the problem is—for Big Booze anyway—20 to 30 percent of people who pair the two are also drinking less. While our livers couldn’t be happier, Constellation Brands and other alcohol-beverage giants are less than ecstatic—and need to find a way to make up for the loss.
While our livers couldn’t be happier, Constellation Brands and other alcohol-beverage giants are less than ecstatic—and need to find a way to make up for the loss.
Pharmaceutical companies have also begun making investments and partnerships with cannabis brands, especially in Canada where our favorite plant will be federally legal for all adults starting on October 17. GW Pharmaceuticals made the first major move into weed when their CBD medication for childhood epilepsy recently became the first FDA-approved cannabis medicine. Plus, the Novartis Group, one of the world’s largest pharmaceutical companies, recently partnered with Tilray, one of Canada’s leading licensed cannabis producers, to make “non-smokable” Tilray grown pot products available at Canadian hospitals and pharmacies.

“Every additional dollar spent on legal cannabis is pulling from somewhere,” says Lukas. And that’s a lot of dollars; an estimated $57 billion worldwide by 2027, to be exact, according to BDS Analytics. Lukas explains that cannabis has the power to disrupt a multitude of different industries beyond alcohol and pharmaceuticals. Consumer package goods, beauty and wellness, Big Tobacco are all threatened by legal weed. “We’re also seeing people decrease how much coffee they drink. They’re finding alternative stimulants to energize them in the morning and that’s coming from cannabinoids… The list goes on and on,” Lukas adds.

Even though I’m all for having weed in literally every product I use throughout the day, do we really want giant corporations touching our beloved bud? “There’s a big part of me that sees this outside investment as validation for the industry,” says cannabis activist and small business owner, Tyler Strause. “Proof that we have in fact transitioned from an illicit black market to a legal regulated market.”
It's hard to decipher fairness when contemplating the people still incarcerated for non-violent cannabis offenses while big corporations start to get rich off the same plant, consequence free.
If you're a cannabis advocate, these recent investments a sign that the world is coming around when it comes to weed —which helps to further destigmatize the plant—but these companies also potentially have the money and lobbying power to finally legalize cannabis federally in the U.S. Plus, Lukas explains, industries like Big Pharma, Big Alcohol and Big Tobacco are accustomed to navigating complex regulations that can vary state by state, something that small cannabis business owners can struggle with.

However, both Lukas and Strause express that once big business is involved, it will be much harder for small cannabis businesses to survive. “There’s a real concern, when you look at the alcohol industry, liquor industry, tobacco industry and you start counting how many businesses are there really… You start to realize you can count them on your hand,” Strause says. And that consolidation of all the individual players who fought so hard to make the cannabis industry what it is, scares the folks who fought so hard to legalize the plant in the first place. It's hard to decipher fairness when contemplating the people still incarcerated for non-violent cannabis offenses while big corporations start to get rich off the same plant, consequence free.

When Big Business takes over the cannabis industry, it comes with the risk of losing the product's grade—after all, these businesses get so large because they're most concerned with quantity, not quality. The reason I stopped drinking Budweiser is because now I can (sort of) afford beer that tastes better. There is a possibility that Constellation Brands comes in and makes the “Budweiser of weed,” meaning a cheap, flavorless version of the plant I love.

Lukas points out that, even if Big Business starts producing a mainstream, affordable product, a “craft” market could still exist for cannabis connoisseurs, but she also reminds me that not everyone is a connoisseur who understands or even cares about the complexities of terpenes and sustainable, organic growing techniques. Lukas explains having budget and mainstream options for cannabis consumers is a good thing, and they’re already emerging in legal markets alongside luxury products.

It seems the hard truth is, in order for cannabis to become mainstream and legal in the United States, Big Business is a necessary evil, regardless of what that means for the little guy. All eyes are on Canada this fall to see how these corporate partnerships play out and what they mean for the future of legalization, worldwide.

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