Pernod sees no impact yet from legal cannabis but watching closely

© Reuters. FILE PHOTO: Cannabis packaging is seen at the Cannabis World Congress and Business Exposition, a trade show for the legalized adult use, medical marijuana and industrial hemp industries, in Los Angeles© Reuters. FILE PHOTO: Cannabis packaging is seen at the Cannabis World Congress and Business Exposition, a trade show for the legalized adult use, medical marijuana and industrial hemp industries, in Los Angeles

By Martinne Geller

LONDON (Reuters) – Pernod Ricard (PA:), the world’s second-largest spirits maker, has not yet seen any impact from the legalization of cannabis in some parts of North America but is monitoring the situation closely, its chief executive said.

Alexandre Ricard told reporters the maker of Absolut vodka and Martell cognac was looking for any impact the legalization of cannabis has on its brands but had seen none so far.

“What are we going to do about it? It’s a little bit early right now to have a clear view as to the real impact cannabis may or may not have,” Ricard told a news conference on Tuesday held to discuss last week’s first-half results.

Eight U.S. states, including California and Nevada, have legalized marijuana, already widely approved for medicinal use, for recreational use and some studies show consumers would buy the drug instead of alcohol if it was freely available.

Rival Constellation Brands (N:) in October bought a near 10 percent stake in Canadian cannabis maker Canopy Growth Corp (TO:) to take advantage of any boom as legalization proliferates.

Analysts at Bryan, Garnier & Co say the global legal cannabis market is set to grow more than 1,000 percent to reach $ 140 billion by 2027.

Ricard referred to reports that suggested low-end beer sales may be impacted, but added: “Have we noticed so far, at our level, on our brands, a clear impact? No. But we’re monitoring. It’s still very early.”

Regarding Pernod’s stance on mergers and acquisitions, Ricard said the company will carry on doing bolt-on deals, like its recent purchase of a stake in mezcal brand Del Maguey, and divesting non-core assets, like its Mexican brandy business.

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