As the legal cannabis industry continues to grow in America, speculation about its effect on the alcohol industry's earnings has only increased, with even Molson Coors considering an entrance
to the budding trade. To help both sides of the equation figure out how the two will co-exist, one of pot's leading analytics firms crunched the numbers.
has been analyzing millions of legal cannabis transactions in Colorado and beyond for nearly five years now, valuing America's cannabis industry at $9.2 billion in 2017 and predicting it will swell to $24.4 billion by 2021. According to the firm, cannabis and alcohol can either be combined or consumed separately — but they're more frequently used at different times of the day or on different days of the week.
“Wake and bake: largely acceptable. But maybe waking up and drinking might not be acceptable," BDS vice president of consumer insight Jessica Lukas explained during a webinar held by the company. "I have friends who are moms, and they hashtag ‘#sendmorewine,' ‘#thekidsareinbed' or '#itstimetodrinkwine,’ and that’s socially acceptable. If you’re a mother and you post on social media ‘The kids are asleep, and I’m going to hit my vape,’ there potentially would be concern.”
Lukas said there is no "typical cannabis consumer" in states with recreational pot, adding that both men and women up to the age of forty use it for recreational and medical purposes.
“Cannabis consumers span all generations, genders; there’s varying socio-economic backgrounds, motivations. Their needs, occasions, the benefits that they’re looking for — they differ,” according to Gennifer Jackson, a managing researcher for Radius Global Market Research
and the webinar’s co-presenter.
In spite of their variety, cannabis consumers often find common ground when it comes to alcohol, the numbers show. BDS found that 72 percent of cannabis consumers also consume alcohol, and are actually more likely to drink than non-cannabis users. On top of that, the firm found that the majority of cannabis consumers haven’t changed their alcohol consumption on account of the plant. “Cannabis is not new for most adults. Alcohol and cannabis have co-existed forever," Jackson said. "The future is in how markets, consumers and technology continue to evolve."
So what will the future look like? With luck, we'll see a harmonious co-existence. Lukas observed that of people who consume both cannabis and alcohol, “about half do not see the two as appropriate for the same times of day or day of the week. They are not seen as substitutable, or even complementary.” A 12 percent minority of users viewed the two as appropriate for the same times, according to BDS, while 41 percent perceive cannabis as good for both different and similar situations as alcohol.
These areas of overlap should be the alcohol industry’s chief concern, the presentation showed, highlighting revenue risks for both substitution and complementary use. “For some people, they are substitutable — meaning maybe an occasion at night [when] you watch Netflix with your significant other, and that used to be a beer, wine or spirits occasion. Now you’re in a legal state, and [cannabis] becomes a fourth choice," Jackson said.
Even when consumers choose not to substitute, cannabis can still be a threat to alcohol's earnings. BDS found that when consuming cannabis, half of users drink less alcohol. “You used to have two glasses of wine, now you have one glass of wine and a piece of marijuana-infused chocolate," Lukas explained.
Although a risk overall, cannabis legalization still has the potential to be a positive for some members of the alcohol industry. The creator of Blue Moon expects to release a THC-infused, non-alcohol craft beer
before the end of 2018, while Lagunitas recently announced Hi-Fi Hops, an upcoming line of cannabis-infused sparkling water
You know the saying: "If you can't beat ’em, joint ’em."