Diageo rumoured to be lining up cannabis deal

UK-based alcoholic drinks giant Diageo is reported to be in talks with at least three leading cannabis producers as it considers adding marijuana-infused drinks to its portfolio.

As reported by BNN Bloomberg, which stated that it received the information from “multiple sources familiar with the matter”, Diageo has held “serious discussions” with at least three major cannabis producers.

The owner of Gordon’s Gin and Guinness may potentially be entering a field already occupied by drinks companies including Constellation Brands and Molson Coors.

Diageo has met with several Canadian companies to discuss a possible investment or collaboration to create new cannabis-infused drinks, according to BNN Bloomberg.

The news site also noted that a “senior executive team” from the company attended a marijuana conference in Toronto two weeks ago during which they held several meetings to “discuss possible partnerships or an equity arrangement”.

The sources contacted by BNN Bloomberg differed as to when they thought the deal would be completed, with one stating that Diageo would take time to weigh up the deal, while another believed it was close to making a move with a Canadian producer.

A spokesperson from Diageo refused to comment on the reports, but did add: “As we’ve said before, we are monitoring this space closely”.

As a result of reports, shares in several Cannabis companies have risen dramatically, including Tilray, Cronos Group, Aphria (already working with Southern Glazer’s Wine and Spirits) and Aurora Cannabis. Recreational cannabis is set to be legalised in Canada on 17 October.

At the beginning of this month, it was announced that brewer Molson Coors had made a deal with The Hydropothecary Corporation, a Canadian cannabis producer, to launch a new stand-alone business which will develop “non-alcoholic, cannabis-infused beverages for the Canadian market following legalisation”.

Meanwhile, Constellation Brands, which bought a stake in Canadian company Canopy Growth in October last year, this month increased its stake in the business, investing US$4 billion to acquire a 38% share. The new deal, which it claims is “the largest to date in the cannabis space,” cements Canopy Growth as its exclusive global cannabis partner. Constellation said that the funds will enable Canopy Growth to “build and/or acquire key assets” in around 30 countries that are legally developing a medical cannabis programmes.

Last month, a team of Canadian scientists announced that they were attempting to make a beer brewed with the “stalks, stem and roots of the cannabis plant”.

Meanwhile, in May, the Canadian branch of distributor Southern Glazer’s Wine and Spirits created an off-shoot dedicated to cannabis products. It hatched a deal with marijuana producer Aphria to distribute its products across Canada when the drug is officially legalised later this year.

Among those planning to launch cannabis-related drinks products include Heineken-owned US craft brewer Lagunitas with its “IPA-inspired, THC-infused sparkling water,” a cannabis-infused Sauvignon Blanc from California’s Rebel Coast Winery and Blue Moon creator Keith Villa’s new business dedicated to producing cannabis-infused craft beer.