With cannabis legalization happening in more places than ever before many are discussing how it might affect the alcohol industry. A lot of people believe that legal cannabis will pose a long-term risk to the alcohol industry. How exactly does one come to this conclusion? Unlike alcohol, cannabis does not produce the potential side effect of death nor is it involved with crimes like domestic violence, and other forms of violent crimes. The argument that cannabis will hurt the alcohol industry is a legitimate one for some while others simply laugh at this notion.
The Socialness of the Two
There are people out there that believe if cannabis is legalized consumers will just stop drinking and everyone will turn to pot. This is not the case. Cannabis and alcohol have coincided together peacefully and successfully for quite a long time. It’s very common for someone who enjoys smoking a joint to also enjoy drinking a beer or having a cocktail. Those who typically drink heavy often will avoid smoking weed until it is close for them to call it a night. This is because weed will often cause them to get hungry which in return sobers them up and induces sleep.
Cannabis consumers however typically tend to be more social drinkers. They’re the type that’ll have some fruity cocktails or a few glasses of wine or maybe throw back a few beers with their buds. Instead of going for the quantity they often opt for quality preferring craft alcohol beverages. Over the past two decades, craft beer and craft whiskey have become increasingly popular. This is not because cannabis became legal; it’s because consumers are becoming more health conscious and aware of what they’re putting in their body. Mass production alcohol uses all sorts of additives that are not present in craft alcohol production. In the state of California medical cannabis has been legal for over two decades.
California is a Prime Example the Two Can Continue to Co-Exist
The alcohol industry in California did not die. Californians did not decide to quit drinking and turn to pot. In fact, the alcohol industry has continued to grow in California and still does even with legal retail cannabis. The IWSR is considered to be the leading source for data specific to the alcohol beverage market. IWSR along with BDS Analytics suggest that consumers are showing a preference of enjoying both cannabis and alcohol.
The thought that consumers are enjoying both indicates that one is taken away from the other. In this case, legal cannabis sales are taking away from legal alcohol sales. That just doesn’t make sense if you look at the statistical data.
“The wine and spirits industry has experienced steady growth over the last ten years. The spirits segment volume has been growing at a CAGR of 1.8% over the last 10 years while revenues outpace this growth with a CAGR of 3.3%. The wine segment has been growing steadily at a CAGR of 3.4% over the last ten years in revenues and a CAGR of 2.2% in volume”.
Perhaps what people should be saying is that alcohol sales are not growing as fast as shareholders would like to see. This could be but isn’t likely to because of cannabis legalization. Alcohol sales have not been stunted or stopped because of weed. If anything, the heavily regulated cannabis industry has helped. It has helped educate more consumers towards healthier options and knowing about what they’re putting in their body. Perhaps this is a reason for the surge in craft alcohol sales.
The Reality of it All
The reality of declining alcohol sales is not related to cannabis legalization it’s related to consumer awareness. Malt liquor and beer sales are decreasing while wine, spirits, and craft beverage sales are increasing. Researchers are showing that big beer brands in America like Budweiser aren’t impressing consumers the way they have in the past.
Arnold Schwarzenegger once said “milk is for babies when you grow up you have to drink beer.” And William Shakespeare said,” for a quart of ale is a meal for a king.” I guess when it comes to beer, its beauty is in the eye of the beer holder.
When it comes to the risk that cannabis has on the alcohol industry though it seems that only real risk is to shitty products and low-quality alcoholic beverages.