Diageo does not want to enter the Cannabis
space for now. https://www.ft.com/content/94ef3e96-7cf3-11e9-81d2-f785092ab560 Diageo watching cannabis trend but no need to rush, says chief Ivan Menezes focuses on spirits as drinks group sets out new financial targets Chief executive Ivan Menezes says there are so many markets where Diageo is really just starting Diageos chief executive has said he is watching North Americas cannabis craze but will avoid rushing in to the market as the FTSE 100 drinks company could push sales and profits higher without turning away from alcohol. Speaking after he laid out new financial targets in New York this week, Ivan Menezes said the Smirnoff and Guinness maker would be able to deliver on his goals without needing to find new avenues for growth. Several of the worlds biggest consumer goods companies are making a push into cannabis-related products, as decriminalization spreads across North America and makes weed a potential competitive threat to cigarettes and alcohol. Constellation Brands, whose products include Corona Extra lager and Casa Noble Tequila, last year pumped almost $4bn into Canopy Growth, a Canadian cannabis group. Tobacco company Altria, which makes Marlboro cigarettes, struck a C$2.4bn deal for a stake in Cronos, another Canadian marijuana company. Anheuser-Busch InBev, the brewer behind Budweiser, has a partnership with another, Tilray. Diageo itself was linked last year to three Canadian cannabis companies over potential partnerships or investments. While Diageo was tracking what is happening in cannabis in North America, Mr Menezes said, the company was focused on its portfolio of traditional drinks as consumers were ditching beer in favour of spirits. Decriminalisation in North America has led to a profusion of cannabis infused drinks and edible products Reuters A key source of growth is out of other [alcohol] categories, he said. Were not an industry [that is] ex-growth. This week Diageo said it planned to generate annual organic net sales growth over the medium term in the mid-single digit range, and operating profit between 5 per cent and 7 per cent. Diageo, whose brands include Johnnie Walker, Tanqueray and Baileys, still controlled less than 5 per cent of the global market for alcoholic drinks. In gin and whisky, the chief executive added, there are so many markets of the world where the company was really just starting. Recommended Cannabis industry Weed producer Canopy moves into skincare with 43m This Works buy London-listed shares in Diageo are trading near record highs, giving the group a market capitalisation of 78.9bn. A growing trend for gin drinking in the UK and expansion in its US tequila brands including Casamigos, co-founded by George Clooney and acquired by Diageo in 2017, have boosted sales. Deirdre Mahlan, the companys North America chief, added that the legalisation of cannabis in Canada had so far not had any discernible impact on Diageos business in the country. I wouldnt call them a threat, she said of a new wave of alternatives to alcoholic drinks, including beverages infused with CBD, a compound found in cannabis, and Kombucha, a fermented tea.