Big Alcohol Is Eyeing Cannabis, Is That Good or Bad?
A year ago
For many cannabis consumers, enjoying a cold Bud with a bud is a natural combination. For others, marijuana is part of a wellness program, which helps reduce alcohol consumption. And still some cannabis opponents don’t hesitate to lump together “weed and wine” as dangerous intoxicants that should be avoided at all costs.
For years, powerful alcohol interests took an adversarial stance toward cannabis—even spending lobbying money and advertising dollars to help defeat marijuana legalization efforts. But public perception about cannabis is shifting rapidly. A recent Gallup Poll reports that 65% of Americans believe smoking marijuana is “morally acceptable.”
With the cannabis industry’s financial potential piquing the interest of liquor companies, is their involvement in this fledgling industry a good or bad thing?
Why Is Big Alcohol Interested in Cannabis?
As with everything else in today’s complex economy, you only need to follow the money to figure out why Big Alcohol has taken notice of the marijuana industry. A 2017 study by the University of Connecticut found that in regions where cannabis is legal, monthly alcohol sales have fallen by 15%. A 2016 study in Colorado, Oregon and Washington confirmed that beer sales underperformed in the two years following cannabis legalization in those states.
Other studies indicate that cannabis consumers aren’t pairing marijuana with alcohol use; they’re consuming cannabis as a substitute. If this trend continues, it could spell trouble for the liquor industry.
When Pitted Against Each Other, Alcohol Comes Up Short Next to Cannabis
Members of the alcohol industry know that liquor is responsible for a staggering number of health conditions, as well as 90,000 deaths per year, according to the Centers for Disease Control. Conversely, cannabis has no known fatal dose. Experts might disagree about whether cannabis can be proven to be good for people, but all of us know alcohol has been shown to be extremely bad for many.
The alcohol industry has spent incalculable amounts of money touting the one health idea they’ve got: that drinking a glass of wine per day is good for you. Meanwhile, the cannabis industry can point to a growing list of health benefits that are gaining acceptance by medical practitioners. Many of marijuana’s relatively minor side effects like increased appetite or dry mouth can be controlled by the user.
Cannabis, Wine, Women & Wellness
The uptick in cannabis sales that Big Alcohol is observing could be tied to cannabis’s health benefits and alcohol’s health risks. Some analysts note that it’s the wine, and not the beer industry, that may soon feel the financial pinch. This is because cannabis offers women an alternative to their relaxation routine of an evening glass of rosé.
Another reason women and some adults are turning to cannabis over alcohol is simple: calories. While younger alcohol consumers may not be concerned about alcohol’s calorific expense, people in their 40s and older have started to pay attention to the fact that smoking a marijuana pre-roll or eating a 10 mg cannabis gummy has a fraction of the calories or the carbs of a glass of wine or a flight of beers.
That said, cannabis is well known for bringing on the munchies. However, recent research has found that regular cannabis consumers have smaller waists and a lower BMI (body mass index) than their non-cannabis-consuming counterparts.
So, is the wine industry eyeing legal marijuana like beer and liquor companies are? Rebel Coast seems to be the first winery combining its product with marijuana. The company has come up with a tetrahydrocannabinol (THC) oil-infused sauvignon blanc.
For now, until regulations change, the alcohol must be removed from the wine and the focus is on taste. Brewers and vintners see some promise in large-sale cannabis-infused wine and beer, because of their ability to make a very consistent product from one batch to another.
Canada, Corona & Cannabis?
So, Big Alcohol isn’t wasting any time getting into the cannabis market. To see how this is playing out, watch what’s happening in Canada. Our neighbors to the north very recently became the first G7 country to nationally legalize recreational cannabis.
Constellation Brands Inc. is an alcohol powerhouse. They own Corona Beer, Svedka Vodka and many other well-known alcohol brands. In February, in anticipation of Canada’s cannabis legalization, they purchased a 9.9% stake in Canopy Growth, one of Canada’s biggest suppliers of medical marijuana.
Southern Glazer’s is the largest liquor distributor in the United States. The American company distributes wine and spirits in 35 states as well as in Canada. In May, it announced a partnering with Aphria, Canada’s largest legal cannabis producer. This deal pairs the enormous liquor distributor with one of the three largest cannabis companies in Canada.
To some, this all may seem like a Big Alcohol takeover. Others may see the injection of the alcohol industry’s considerable capital as a way to push forward cannabis research and product development as well as make legal cannabis even more accessible to consumers. When announcing the deal, Aphria made sure to highlight Southern Glazer’s wide-reaching infrastructure and distribution operations.
In a fledgling industry with lots of competition and a continuing stigma attached to the product, it makes sense why a Canadian cannabis company would say yes to all of the advantages a Big Alcohol deal brings.
Alcohol companies collaborating within the marijuana industry could also mean that the plant and its products will gain mainstream acceptance that much quicker. This could help break the many negative stereotypes attached to cannabis that persist today.
To make this happen, Big Alcohol will have to go about its new investments in the right way, listen to its marijuana industry counterparts, and hopefully keep the integrity of the plant and its products in mind. Of course, because of the United States’ federal ban on cannabis, these titans of alcohol aren’t talking about working within the U.S. cannabis market—yet.
Are Cannabis-Alcohol Mergers Inevitable?
Torsten Kuenzlen is a former executive for The Coca-Cola Co. and Molson Coors. He signed on with Sundial Growers, a Canadian cannabis firm. Mr. Kuenzlen doesn’t mince words when he says, “We know that virtually all alcohol companies are very carefully looking at the cannabis space and looking to partner in some shape or form.”
From the regulatory standpoint, there has always been a push to treat cannabis the same way as liquor. Investors seem to agree and analysts foresee cannabis mimicking alcohol. They predict that it won’t be the actual cannabis plant matter that sells, rather products derived from the plant like edibles, tinctures, vape cartridges and topicals. This is much like the beer and wine industries in that we don’t buy grapes or hops, but products derived from them.
The numbers don’t lie. With estimates that U.S. cannabis sales could top $30 billion by 2030, and with current U.S. wine sales estimated to be at about $60 billion, it’s no wonder that liquor industry executives are putting down bottles and picking up vape pens.
Make Your Voice Heard on Big Alcohol in Cannabis
In Sonoma, Mendocino and Napa counties, as well as many other Central California regions where the climate is favorable for the production of wine grapes and cannabis, dozens of regulations governing water use, stream siltation and even disabled access parking in vineyards and cannabis orchards are completely different. Cannabis farmers are held to standards that agriculture experts agree couldn’t be met by the majority of grape growers.
“I can’t tell you how upset it makes me when I’m being forced to pay tens of thousands of dollars to comply with environmental regulations that my neighbor who grows grapes doesn’t have to comply with,” one farmer told HelloMD.
If you feel strongly about the alcohol industry’s growing involvement in legal marijuana, reach out to your city and county governments to make your voice heard. Talk to dispensary operators, who are often among the most informed people in the cannabis movement. Many counties have citizen-based committees helping draft their local ordinances.
Your cannabis expertise could be invaluable to your community. When it comes to creating an inclusive industry that welcomes and supports small and large operators, lawmakers need to hear a spectrum of voices—not just the lobbyists representing Big Alcohol.
Photo credit: Eaters Collective