Anheuser-Busch InBev (NYSE:BUD), the largest brewer in the world, is known for its popular beer brands ranging from Budweiser to Modelo. At the helm of this $190 billion dollar company is CEO Carlos Brito.
With a Masters of Business Administration from Stanford University, Brito is a bright guy for sure. Given his position at A-B InBev, a company with a lot to lose as cannabis legalization continues, we were shocked to hear that he’s not worried.
‘We don’t feel we need to do anything’
In a recent interview with global beverage industry news portal just-drinks, Brito was either making an honest effort to keep A-B InBev investors from worrying, or he’s completely in the dark on the cannabis industry’s impact on his business.
“We’ll continue to follow it,” A-B InBev CEO Carlos Brito said. “But, for now, we don’t feel we need to do anything.”
A recent study conducted by multiple researchers from multiple universities concluded that counties within the states that have legalized medical marijuana showed a roughly 15% reduction in monthly booze sales.
A-B InBev is late to the game
This alarming statistic shows a nearly direct correlation between cannabis legalization trends and falling alcohol sales, yet A-B InBev is still just watching. Last October however, A-B InBev competitor Constellation Brands (NYSE:STZ) (NYSE:STZB) took action in a big way.
Last fall, the Fortune 500 alcohol giant behind Corona took a 9.9% stake in Canadian marijuana producer Canopy Growth Corp. (NYSE:CGC) (TSX:WEED) for $245 million CAD, only to follow up with the purchase of an additional $200 million CAD worth of Canopy’s debt this week.
What’s A-B InBev missing?
After the move by Constellation Brands, many are wondering what A-B InBev is waiting for. With billions of dollars on the balance sheet, money isn’t the issue. So, what is A-B InBev missing?
While Brito did admit that “there’s a big tidal wave coming,” taking no action seems foolish. His less-than-a-week-old point that Canada is “finding lots of issues as they go along the path to legalization,” is already moot. Just the other day, Canada’s senate passed historic Bill C-45 to legalize and regulate recreational marijuana nationwide.
Conclusion
With October 17th, 2018 set as the first day Canadians will be able to consume cannabis recreationally without criminal penalties, maybe A-B InBev will break into action.
After all, why drink Buds when you can burn them?
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