Cannabis legalization can mean something different for each person. For some, it can represent a solid help for their medical ailment. For others, it can become a chance to be open and honest about their recreational habits. Legalization can affect each individual in a personal fashion. Yet, from a general perspective, there are two main consequences that derive from legalization policies. One is greater and simplified access to marijuana. The other is a decrease in the stigma associated with its consumption.
Based on this perspective, cannabis research firm New Frontier Data set out to find out how these consequences are affecting alcohol consumption. In the first report of their Cannabis Consumer Series, the
Whatever results fate might bring, Big Alcohol companies are making sure they’re not getting left behind. Last year saw big moves in cannabis investments from Alcohol companies. The $4B stock purchase of Canopy Growth from Constellation Brands (makers of Corona beer, among many other beverages), AB InBev’s (makers of Budweiser) $100 million joint investment with Cannabis company Tilray, and Heineken’s launch of a cannabis-infused beer through its subsidiary company Lagunitas are just some examples.
We already took our stand on whether weed beats alcohol. However, the consumer population is still in power to define which industry will become the main source of intoxication for future recreational markets.
Alcohol is Popular Amongst Stoners, Though Cannabis is Preferred
Most state regulations forbid the sale of high-THC cannabis products and
According to the report, 30% of cannabis users drink alcohol once a week. And almost 50% of them do it at least once per month.
Furthermore, there appears to be a correlation between average cannabis use and alcohol consumption. Most of the consumers that reported using cannabis daily told the firm they also use alcohol every day. The same happened with weekly, monthly and occasional consumers. The majority of them reported similar levels of consumption of both drugs.
Still, alcohol consumption is commonly found amongst regular cannabis users. And 54% of them stated they believe
The Cannibalization of the Alcohol Market
‘Cannibalizing’ does not mean to turn stuff into cannabis. It’s actually a marketing term used to describe a process in which an industry loses market share because of the introduction of a new product.
As for the question of whether the alcohol is losing sales thanks to cannabis legalization, experts show contrasted opinions. The DISCUS, or Distilled Spirits Council conducted a research earlier this year. Their goal was to find out if cannabis sales in legal states are stealing share from spirit drinks. The research concluded that there is no evidence to support that assumption. CEOs of both Constellation Brands and AB InBev showed similar ideas. They stated that their own studies show no correlation between cannabis legalization and a decrease in sales. These statements are surprising given that both companies decided to make large investments in the cannabis industry.
On the other side of the court, academics disagree. A joint study from three universities concluded that alcohol sales in states with medical marijuana decreased 15% between 2006 and 2015. New Frontier Data aimed their research at solving this puzzle. Results show that in adult-use states, interviewed subjects declared a drop in their alcohol use, as opposed to the overall USA mark. 45% of cannabis users stated they had replaced some of their drinking with marijuana.
More Legal Weed, Less Alcohol Interest
As the legal cannabis market matures, and new products are released, users who have not yet been introduced to either alcohol or cannabis are likely to drift towards the green side of business. The firm considers the main consumer base of present times for both drugs to be constituted by users who developed their drinking and cannabis habits simultaneously, during the black market era. As cannabis becomes mainstream, alcohol companies risk losing much of their share to new consumers who cross the legal age barrier.
According to an expert from Brock University in Canada, that won’t happen until drinkable THC becomes a thing. “Non-alcoholic, cannabis-infused beverages (including beers) represent a substantial market opportunity for consumers who want to replace their drinking but do not want to use combusted products” concludes the report.