Molson Coors thinking 'very carefully' about legalization of marijuana

MONTREAL – Molson Coors says it is looking to Colorado for insight on the possible effects the legalization of marijuana in Canada could have on its beer sales.

Stewart Glendinning, CEO of Molson Coors International, was asked by an analyst Tuesday during the company’s quarterly earnings conference call for his opinion on the potential impact the legalization of marijuana could have on Canada’s beer sector.

“Cannabis is something we are thinking very carefully about, not only as a business but also as an industry,” Glendinning, who was the former head of Molson Coors’ operations in Canada, said in response.

“There’s just a lot we don’t know at the moment. … It’s steady as she goes because of the lack of clarity about the deployment of the drug itself.”

It’s not clear whether Glendinning’s comments are a signal that Molson Coors views a recreational marijuana industry as a threat or opportunity. He did not elaborate and the company did not return calls seeking clarification.

But during the call, Glendinning said Molson Coors (NYSE:TAP) is looking to Colorado, the state where the recreational use of marijuana was legalized in 2013 and where the company is headquartered, for guidance.

The federal government has said it plans to introduce a bill in the spring to legalize the recreational use of marijuana.

Stephen Beaumont, an industry watcher and Canadian author on beer trends, said the Colorado breweries he follows have not reported any impact on sales.

“It could be one of those things that hit more at mass-market breweries because if someone wants to get a buzz on instead of buying Coors Light, they’ll buy some weed,” he said.

“On the West Coast of the United States, craft beer and marijuana have happily co-existed for quite some time.”

Brittany Weissman, an analyst with Edward Jones, said any possible effect from marijuana legalization in Canada on Molson Coors’ beer sales will be mitigated. She said that’s due to the fact that Canada represents a smaller share of the company’s market following the US$12.2 billion acquisition of Miller brands and SABMiller’s 58 per cent stake in MillerCoors.

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