Diageo Reported Negotiating in Canadian Cannabis-Drink Market

Alcoholic drink companies continue to be intoxicated with the Canadian cannabis market, with Diageo Plc reportedly pursuing a deal with at least three Canadian cannabis-producing firms.

BNN Bloomberg reported the London-based company, which makes or markets such brands as Guinness beer, Smirnoff vodka and Seagram's whiskey, is in "serious discussions with at least three major [cannabis] producers … to add marijuana-infused beverages to bolster flat volume growth in its portfolio of global brands."

We recently reported on similar moves by Constellation Brands and Molson Coors Brewing Co.

Recreational use of marijuana and cannabis derivatives will become legal in Canada in October, and a number of companies are rushing to fill what they think will be a large and lucrative market for derivative products.

"One cannabis executive who recently held discussions with Diageo … said [Diageo] will likely take its time to evaluate the sector and settle on a partner … after Canada legalizes recreational adult use of the drug in October," said the BNN Bloomberg report. "However, another cannabis executive who also met with Diageo characterized the discussions as more advanced, saying that the London-based firm is close to making a deal with a Canadian producer."