The cannabis industry broke barriers in 2018 it previously seemed impossible a decade earlier.

After years of promises by Canadian Prime Minister Justin Trudeau and months of Senate debate, Canada has become the first industrialized country in the world, and only the second in total behind Uruguay, to legalize recreational marijuana. Rolling out the red carpet for cannabis is expected to generate billions of dollars in additional annual sales, but more importantly, legitimize marijuana as a business model that’s here to stay.

Image source: Getty Images.

Investors expect to make money from the cannabis industry both directly and indirectly. Marijuana growers come in direct contact with the plant and are expected to be the primary beneficiaries of the industry’s growth. According to investment firm Cowen & Co., global cannabis sales could reach $ 75 billion by 2030. For context (although this is a completely different analysis), a co-report written by Arcview Market Research and BDS Analytics request $ 16.9 billion in global cannabis sales in 2019.

Side businesses also offer a lot of potential. Think about the marketing and advertising, financing, packaging and value-added solutions that take place behind the scenes to support the industry and make cannabis sales possible.

There are fears that a flowerpot industry is siphoning off sales from the alcohol industry

But not all industries are happy to see the cannabis industry flourish before our eyes. A good example is the alcohol industry, where experts have estimated that producers of beer, spirits and wine could lose sales to the marijuana industry.

In the 2017 Monitoring the Future survey, nearly 44,000 grade 8, 10 and 12 students from 360 public and private schools were interviewed on many topics, including their perception of cannabis and alcohol. and tobacco. What the survey found is that far fewer college students today think their parents would disapprove of cannabis use compared to the “Monitoring the Future” survey conducted four decades earlier. This better perception of marijuana was visible when students were asked about infrequent, occasional, and regular potty use.

A rolled cannabis joint placed on a cannabis leaf.

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In comparison, the percentage of grade 12 students who thought their parents would disapprove of their choice to drink binge or smoke a pack of cigarettes a day actually increased in 2017 compared to the survey four decades earlier.

Now I know what you might be thinking, “These are students. Why are their opinions important? The answer is that the younger generation will dictate the future of cannabis and alcohol sales. The preference for weed tends to decrease with age, which means that the younger generation (i.e. Generation Y and Generation Z) have a much more favorable view of cannabis than older Americans. . These younger generations will be consumers of a long time, which means that their opinions will be essential in shaping these vice industries in the future.

This alcohol industry CEO suggests a lot of ado about nothing

But is this the case? Will Cannabis Steal Alcohol Industry Sales? At first the answer seems to be “no”.

This last Wednesday, Anheuser-Busch InBev (NYSE: BUD) CEO Carlos Brito was interviewed in Davos, Switzerland by CNBC’s Scream Box and noted that the company has no data to suggest that cannabis sales are hurting its beer sales in North America. Brito said: “We still don’t have enough data points because there is noise to prove that beer – alcoholic drinks – is suffering.”

A cannabis leaf on top of a soft drink, with cannabis leaves to the right of the glass.

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One of the reasons Brito may not yet have this data is that legalizations in the cannabis industry are still very recent. Canada’s recreational launch took place just three months ago, and a backlog of applications for cultivation licenses and permits to sell to Health Canada limited supply. In other words, it does not yet provide a large enough sample of data.

Another reason Anheuser-Busch InBev cannot accurately determine whether legal cannabis is an issue for its beer sales in the United States is tourism. CNBC notes that 15% of the 82 million people who visited Colorado in 2016 “participated in marijuana-related activity,” making it difficult to tell whether there is a genuine shift from alcohol to cannabis or if these non-residents distort the results.

Alcohol producers like Anheuser-Busch InBev are hedging their bets

However, what is clear is that the alcohol industry wants to cover its downsides in case cannabis becomes a problem.

In December, Anheuser-Busch InBev announced a A $ 100 million joint venture with a canadian producer Tilray (NASDAQ: TLRY) to research and develop cannabidiol (CBD) and / or tetrahydrocannabinol (THC) based drinks. CBD is the non-psychoactive cannabinoid best known for its perceived medical benefits, while THC is the cannabinoid that gets a user high. Alternative consumption options such as cannabis infused drinks are expected to be legal by next October in Canada, which would give Tilray and Anheuser-Busch ample time to develop, label and launch infused products. Tilray and Anheuser-Busch will each contribute $ 50 million to the joint venture.

A potted cannabis plant next to a bottle of wine.

Image source: Getty Images.

This partnership was particularly interesting given that Brito had little interest in a cannabis joint venture as recently as June 2018. Here’s what Brito had to say when he was interviewed by Just-Drinks.com in June:

Cannabis is something that we as a business are trying to find out more about. It will be regulated. It is going to be marketed. But it is still a very small matter and in most places it is not legal … We will continue to follow it, but for now we don’t think we have to do anything.

In addition to the Anheuser-Busch InBev-Tilray merger, beer producer Corona and Modelo Constellation brands (NYSE: STZ) should also develop products infused with Canopy growth (NASDAQ: CGC), the largest marijuana stock by market capitalization in the world. In November, Constellation Brands completed a record investment of $ 4 billion in stocks in canopy growth. This participation, totaling 37%, indicates that Constellation believes in more than just infused drinks. But given Constellation’s deep pockets and marketing prowess, as well as Canopy Growth’s top brand in the cannabis industry, the development of branded cannabis drinks seems logical.

The truth is, it’s still too early to say whether alcohol sales are going to suffer from the rise of marijuana, but alcohol producers are unlikely to take too many risks. So, expect partnership announcements to continue in 2019.

Discover the latest Transcript of the Anheuser-Busch InBev results call.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.