The world’s largest spirits marketer is reportedly eyeing deals to enter the cannabis market. Citing people close to the situation, Canada’s BNN Bloomberg TV reported today that Diageo has held discussions with at least three Canadian cannabis producers about potential deals.
Diageo hasn’t commented on the report, but Diageo NA president and CEO Deirdre Mahlan told SND earlier this year that the company is monitoring the cannabis space. “This is an area we’re watching closely,” Mahlan said. “When we talk about the future of socializing, of course, we should be interested in what other products people use on social occasions. I won’t comment specifically on any plans we may or may not have, but that category is going to continue to develop. We see that happening as it expands in Canada and some states in the U.S.”
The news follows Constellation’s announcement last week that it’s pouring $4 billion into the cannabis category via an investment in Canadian producer Canopy Growth.
Recreational sales of cannabis will begin in Canada on October 17, and other drinks players including Southern Glazer’s and Molson Coors are also gearing up to enter the category.
The legalization push in the U.S. got a major boost earlier this summer when the Wine and Spirits Wholesalers of America came out in favour of states’ rights to legalize on the condition that cannabis is regulated like alcohol. Investment bank RBC Capital Markets recently said in a memo that the U.S. cannabis market has the potential to reach $47 billion in the next 10 years.