27th July, 2018 by Amy Hopkins

Johnnie Walker maker Diageo is “monitoring” the development of the cannabis sector in North America “very closely”, but says growing legalisation has not yet had a negative effect on its business.

Speaking at a media briefing yesterday following the publication of the group’s FY18 results, CEO Ivan Menezes said “early indication is that there’s no impact” on Diageo’s business from growing cannabis legalisation.

He added that the spirits sector in the US continues to benefit from favourable trends as “young Americans turning 21 are drinking more spirits than wine or beer”.

Dan Mobley, Diageo’s corporate relations director, said the cannabis sector in North America was “still very early days”.

“We are monitoring very closely and seeing how the market is evolving,” he said. “Some states are more advanced than others, but the legal cannabis trade is taking share from the illegal trade.”

Mobley added that currently there is not “sufficient evidence” to “see how it [cannabis] should be regulated”.

Earlier this month, the Wine & Spirits Wholesalers of America became the first trade association to announce its support for the legalisation of recreational cannabis use in the US.

In June, the Canadian senate passed a bill that will see recreational cannabis use legalised at a nationwide level.

Analysts have questioned the impact increasing cannabis legalisation could have on the alcoholic drinks industry, with some warning that booze sales could be hit.

However, a small number of drinks groups are aiming to capitalise on the legislative changes and have announced their intentions to make cannabis-infused beverages.

New York-headquartered Constellation Brands was one of the first movers, purchasing a minority stake in Canadian cannabis supplier Canopy Growth Corporation in October last year. The partnership will see both companies combine their expertise to develop cannabis-based beverages.