Dagga drinks: the next big thing in the booze biz?
The world's major alcohol producers can no longer ignore the dagga phenomenon, as young consumers may increasingly swap beer and cocktails for joints and cannabis-infused drinks.
Some have decisively seized the moment. Constellation Brands, makers of Corona beer, has poured $4bn into the Canadian marijuana firm Canopy Growth.
The coming market is "potentially one of the most significant global growth opportunities of the next decade," said Constellation Chief Executive Robert Sands.
Diageo, the world's largest producer of spirits, including Smirnoff vodka and Johnny Walker whisky, is also in talks with Canadian marijuana producers, according to Bloomberg.
Following in Uruguay's footsteps, Canada on Wednesday will become the second country in the world to legalise recreational marijuana.
Since the Constitutional Court effectively decriminalised the private use of dagga in SA‚ local alcohol producers have also been getting in on the action.
Durban-based craft beer company, Poison City Brewing, has started selling a lager and an India Pale Ale (IPA) containing hemp — a type of cannabis devoid of the mind-altering ingredient tetrahydrocannabinol (THC) — in major liquor chains.
"Cannabis beers are becoming a massive worldwide trend … We’re setting a precedent for other breweries in SA by being the first to experiment with this ingredient here," Graeme Bird, co-owner of Poison City Brewing, told Business Day
South Africa has also been introduced to it's first hemp-infused gin, aptly named Mary Jane, courtesy of Monks, a craft gin maker in the Cape.
Last year, researchers at the University of Connecticut and Georgia State University found sales of alcohol dipped 12.4% in US counties where medical marijuana was legalised.
Soft drink makers, which have seen sales suffer as consumers turn away from high-sugar beverages, can't afford to ignore rising demand either.
Coca-Cola has reportedly discussed producing cannabis-infused drinks with Canada's Aurora Cannabis. And while PepsiCo said this month it had no plans to develop a similar drink, Chief Financial Officer Hugh Johnston told CNBC the company would still "look at it critically."
• Additional reporting: staff reporter