VICE CANADA: The Market for Legal Cannabis Beverages Could Be Huge

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"The federal government does not intend to legalize derivatives this year, but more and more entrepreneurs are already interested in them.

Cannabis can be smoked, eaten, taken in suppository form... and even drunk. With legalization looming, mixing alcohol and weed may emerge as the newest trend, as more and more industry players move into the liquid cannabis market.

Last month, Pernod Ricard President and CEO Alexandre Ricard told Bloomberg his industry is keeping an eye on newly legal cannabis markets around the world. The company's stable of brands includes Beefeater, Havana Club and Absolut Vodka, among others.

Constellation Brands, the company that distributes Corona beer in North America, may have an edge over its competitors. In October, Constellation acquired 9.9% of Canopy Growth, the largest authorized cannabis producer in Canada, in a deal worth $ 245 million. The companies are looking to develop weed-infused drinks.

"Drinkable cannabis is a good way to reintegrate it into society," says Canopy Growth's head of brands in Quebec, Adam Greenblatt. "People already drink in a recreational setting, it's less taboo than smoking."

In fact, the Ontario company has just hired Molson Coors's former Vice President of Marketing, Dave Bigioni, to be its marketing director.

Enrico Bouchard, a Quebec businessman in the cannabis industry, has also recently launched a sparkling wine with infused with terpenes, extracts of essential oils and plant resins. These components provide the full aromatic profile of the cannabis plant, without the psychoactive effects of the drug. The result is a drink that tastes like weed but doesn't get you high.

The wine is distributed by Les Quatre Vins is made in Spain and flavoured with cannabis from Canada. To make it, Enrico Bouchard and Alan Jaremowich teamed up with Viña Fragrance, a Spanish producer of cava, though they aren't allowed to call it "cava" because it's altered by terpenes.

"While everyone focuses on THC and CBD, the active agents of cannabis, we go for the natural essences that perfume the plant," he says. "Terpenes come from cannabis, but they do not contain any drugs. Legalization may be coming to Canada, but it's still illegal in most places. "

Ironically, Enrico Bouchard got the idea for terpene wine during the filming of the VICE documentary Le Peuple de l'herbe in Montreal. In the scene that inspired him, a cannabis extraction specialist, Hugo Senécal, produces a terpene-flavoured sparkling water. "We call it terp champagne," Senécal said. "My $4.99 bottle of water is now worth $150."

"I went back to Spain and I did the same thing with real sparkling wine," explains Enrico Bouchard. "Today, we have an international patent to add terpenes in any alcoholic or non-alcoholic drink. Our first product is a wine, but we plan to launch a vodka soon."

Bouchard is well known in the field of Canadian cannabis, notably as the inventor of the Sublimator, a high-end bong, and for his fertilizer company. In 2014, he was arrested by the Sûreté du Québec for selling seeds. He then went to British Columbia and lives in Spain today.

Bouchard hopes to obtain his export permit in the coming weeks. His wine should be on sale in Canada within two months, starting in Alberta and Ontario, and eventually in Quebec.

According a report by the New York-based Anderson Economic Group, the legal pot market is expected to eat into alcohol sales in Canada to the tune of a less than 1% (or about $160 million in an industry worth more than $22 billion). The figure may seem small, but booze companies aren't likely to just watch their market shrink.

In Canada, only 3% of cannabis users say they consume it in liquid form according to a survey conducted by Health Canada. The figure could well grow as major brands join the game as the market develops. For now, though, they'll have to watch from the sidelines, since the federal government has already decided that the marketing of edible products will not be allowed in the first year of legalization."