France's Pernod Ricard, the world's No. 2 spirits company, is eyeing the cannabis market

Although the French giant has no immediate plans to enter the cannabis market, Pernod Ricard is monitoring market developments: «We’re keeping a close eye on this market. Even so, at this stage, it’s still difficult to say for sure. But there is a real question to ask: Could the legalization of cannabis cannibalize consumption of premium spirits? There is no evidence that this is the case,» says Alexandre Ricard, the company’s CEO.

A Convergence of the Two Industries

The potential of the cannabis market has not gone unnoticed by the alcohol industry giants, and some international competitors have already taken the initiative to carve out a place for themselves in this new industry. Heineken recently launched a cannabis-infused beer, which is currently available only in the United States, Molson Coors also through a partnership with Hydropothecary Corporation. The most notable partnership, however, is the one between Canopy Growth and Constellation Brands which amounts to $4 billion.

Some studies suggest that the legalization of cannabis may have a negative impact on alcohol consumption. That said, for the world’s second-largest company, the North American market represents only a part of a much larger empire, and according to its annual report, it continues to rise, by exactly 4 %. The fastest-growing markets are those in Europe and Asia: while the European market is less progressive than that of North America, the Asian market is even less so. The French giant’s annual revenue was largely driven by double-digit growth in China and India. China, in particular, is the market with the strongest growth. However, cannabis is unlikely to overshadow the company in that country.

«We remain cautious and are continuing our analysis,» added Alexandre Ricard. It may indeed be wise to study the market’s reactions to new products and see how the Canadian market develops once legal sales begin.