Legal Cannabis Sales Threaten Liquor IndustryEdit Post
Contributed by on Feb 04, 2017
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By Warren Bobrow January 30, 2017
Cowen and Company’s recent 110-page report on the state of the cannabis industry further proves that cannabis sales do take a bite out of liquor sales, a fact that the powerful liquor industry cannot ignore.
Azer authored an article entitled “Legal Cannabis is Weighing Heavily on Beer’s Buzz,” stating “In our initiation on the U.S. Cannabis industry, we asserted that increased use of cannabis presents a risk to alcohol, in particular distilled spirits (that over-index to men) and mainstream/economy beer. Data for Colorado (Denver only), Washington and Oregon support this conclusion.”
The Nielsen (liquor industry) report shows definitively that beer volumes in Denver have fallen specifically because of legal cannabis sales at all levels of the industry, and Cowen and Company’s research further states: “To be sure, admitted annual adult cannabis use of 14% falls well below the 70% that drink alcohol, and the 25% that smoke cigarettes. However, with the category having added at least 10 million consumers over the last 12 years, and with momentum building in terms of popular support and legislation, the cannabis industry is poised to generate meaningful growth. Over the last decade we have seen incidence climb for both alcohol and tobacco, across the total population, though alcohol looks to be under pressure.”
Alan Brochstein, chartered financial analyst from the investment research firm New Cannabis Ventures said, “My own view is that the legalization of cannabis for adults is a long-term issue for the alcohol industry as consumers are allowed to substitute one intoxicant for another. The impact will be slowed to a great degree by the lack of legal social use. This is why I am watching the developments in Denver so closely, as three years after legalization, one still can’t go to a restaurant or bar and enjoy cannabis publicly.”
It would appear that the liquor industry will be paying close attention to cannabis as an unwelcome competitor going forward.
While society should be celebrating the reduction in drunks on the street, fewer car accidents caused by intoxicated drivers, falling rates of domestic abuse and increased productivity due to fewer hung-over workers, it seems that those negative consequences of alcohol abuse must be tolerated as long as the investor class continues to line their pockets with liquor profits—unless, of course, they can co-opt the cannabis market and cash in on that as well.
You can keep up with all of HIGH TIMES’ marijuana news right here.