“We’re looking at it. There are going to be alcoholic beverages that will also contain cannabis,” said Constellation Brands CEO Rob Sands in a Bloomberg interview a year ago.

Sands is now in a position to make that a reality. His New York-based company Constellation Brands recently announced the acquisition of a minority stake in Ontario, Canada-based medical cannabis producer Canopy Growth Corporation.

Best known as the producer and marketer of top beer brands like Corona and Modelo, Constellation Brands says it has no plans to sell any cannabis products in the US or any other market unless it is “legally permissible to do so at all government levels”.

The green threat

But Constellation did not just spent C$245m ($191m) to fool around. The investment – representing 9.9% of Canopy Growth Corporation – is part of a long-term strategy to “identify, meet, and stay ahead of evolving consumer trends and market dynamics”.

The threat of lost sales from marijuana and marijuana-laced products has been on big beer’s radar for years. Wall Street investment banking firm Cowen & Company recently highlighted the risk, estimating that cannabis usage among Americans aged 18-25 rose 4.6% over the past seven years while alcohol use by this same demographic fell 2.5%.

Heineken USA CEO Ronald den Elzen alluded to cannibalization worries during a beer wholesaler’s conference last month, where he said: “Wine and spirits are not standing still, and marijuana is being legalized in many states. We have to act now, and we have to do it together.”

Constellation’s move is a different spin on ‘doing it together’, one expected to result in new cannabis-infused drinks at some point, though not necessarily alcoholic drinks. Constellation expects marijuana-laced drinks to be legalized nationwide in the US in the future, with Canada already pointed in that direction.

Medical marijuana has been legal in Canada since 2001, and the country is expected to legalize recreational use of marijuana by July 2018. Though that legalization effort does not cover marijuana edibles, legalization of these products is expected in 2019.

Eight US states have legalized the recreational consumption of marijuana with over 20 legalizing medical marijuana. Colorado and Washington state have the most experience with marijuana edibles, and provide a glimpse at the future.

Cannabis beverages on the market

Recent cannabis-infused beverage introductions in these markets include California Dreamin’ cannabis-infused sparkling fruit juices and Cannabis Quencher Sips, launches that show how beer companies may innovate.

California-based Seven Cities Beverage Companies markets California Dreamin’ sparkling fruit juice, a four-flavor line of clean label, ‘better for you’ cannabis drinks that are 100% natural with no sugar added. The Cranberry Apple flavor has 119 calories per 11.2 fluid ounce longneck glass bottle with 10 milligrams of THC (the psychoactive ingredient in cannabis). Labels recommend that “first timers” drink half the bottle and “wait an hour before enjoying more” given the delayed effect of marijuana edibles.

This delayed effect proved to be problematic for marijuana edibles in first-mover states like Colorado and Washington, which experienced some public health concerns after the legalization of marijuana edibles earlier this decade.

Because the physical effects of THC may not be felt for up to two hours after consumption (causing some consumers to “double up” on the dosage), accidental overdoses were not uncommon. To counteract this, Colorado has just phased in a dosing size restriction of 10 milligrams of THC per serving of cannabis-laced foods and drinks. New rules there also require a universal THC symbol appear on each package.

Also going the drinks route, but more inspired by energy shots, is California-based VCC Brands with its Cannabis Quencher Sips in flavors like Mango and Lemonade. These THC-infused drinks come in “sip-size bottles to encourage micro dosing.” Each two fluid ounce bottle has between 10 milligrams of THC all the way up to 25 milligrams.

Recapturing younger consumers

While it is too early to tell exactly what Constellation has in mind, the brewer’s interest in cannabis-infused drinks may kick off a scramble among other brewers eager to pair up with cannabis-infused food or drink makers to be ready to launch when legislation clears the way. Questions about whether or not the public is ready for such developments seem moot considering the latest polls on marijuana legalization and the early success of marijuana edibles.

Support for legalizing marijuana use in the US hit its highest point in nearly five decades this year. Gallup says that 64% of Americans now say its use should be made legal. That figure is up from 50% support in 2011 and 34% support in 2001.

Early sales numbers on marijuana edibles suggest that the sector is here to stay. Forbes reported in July that marijuana-infused foods and drinks already account for 10% of California’s total cannabis sales. Forbes also reported that the sale of marijuana edibles grew 121% over the last year in Washington state.

Edibles have strong potential because consumers – especially younger consumers – do not want to smoke. According to GlobalData’s Q1 2017 global survey, 54% of 18-24 year-olds globally say they have never smoked (the highest response by age) compared to just 33% of 65+ year-olds.

Brewers also understand if they want to grow the market, they need to win with younger consumers. But younger consumers are straying from beer in worrying numbers.

In sales collateral for its soon-to-be-launched Two Hats Pineapple Light Beer, MillerCoors says that 40% of its “beer losses” come from consumers ages 21-24. It also says that consumers who drink beer at the age of 21 are twice as likely to stick with beer. Cannabis-infused drinks may be one new way to hang onto younger consumers.