Former Molson CEO on how legal cannabis will impact the beer business
A former president and chief executive officer of Molson Inc. says most big brewers are likely exploring cannabis investments as they seek to stem declining sales amid fierce competition from craft beer makers.
“The youth that manages some of the beer companies will be much more open to do that. The older board members will probably be a little more hesitant,” Daniel O’Neill said in an interview with BNN Bloomberg Wednesday, when asked about the prospect of more cannabis and alcohol tie-ups.
“There will be that conversation going on in most of the brewers.”
BNN Bloomberg reported last month that Molson Coors Brewing Co. is in talks with several Canadian-based cannabis companies to invest in them and collaborate on marijuana-infused beverages as Canada gears up to legalize recreational marijuana on Oct. 17.
It would not be the first alcohol maker to strike a cannabis partnership. Constellation Brands Inc., the U.S. distributor for Corona beer, acquired a 9.9 per cent stake in Smith Falls, Ont.-based Canopy Growth Corp. for $245 million in October 2017.
O’Neill, who was named to Ottawa-based CannaRoyalty Corp.’s board of directors last month, added this isn’t the first time big beer makers have faced industry disruption.
When he joined Molson in 1999, large breweries were confronted with the growth of North America’s wine market and smaller brewers like Sierra Nevada Brewing Co. in California, he said.
O’Neill warned that cannabis players should learn from this shakeup in the beer sector.
“The bigness of breweries where they were leaders has dwindled,” he said. “I just worry in the cannabis industry, are the craft people going to be the leaders? The association with the craft growers is where you should be.”