Home Industry Can the Cannabis and Alcohol Industries Co-Exist?

Can the Cannabis and Alcohol Industries Co-Exist?

‘Regulate marijuana like alcohol’ is a campaign slogan that the cannabis community has rallied around this decade, and for good reason.

The slogan gets a lot of traction for the cannabis legalization campaigns that have used it.

The reasoning goes that if alcohol is legal, so too should cannabis be legal.

After all, cannabis has been found to be 114 times safer than alcohol by at least one study.

Studies have found that cannabis can often be used as a substitute for alcohol, thereby potentially reducing alcohol sales.

Does that threat of competition worry the alcohol industry?

Does cannabis reform reduce alcohol sales?

The alcohol industry has every reason to be concerned. But how concerned?

A study from 2017 found that alcohol sales dropped in areas following medical cannabis legalization.

A study from 2016 looked at adult-use cannabis legalization, which found that in Oregon and Washington State beer sales had dropped but only by an estimated two percent.

Studies like these suggest that cannabis reform can hurt alcohol sales, and it will be awhile before there’s enough data to make a more definitive determination.

Whether there is an impact, and the impact is significant, is yet to be seen but it hasn’t stopped alcohol companies from opposing cannabis reform.

The alcohol industry lobbies against cannabis reform

The alcohol industry has a history of opposing cannabis political reform efforts via campaign contributions.

For instance, in 2010 the California Beer & Beverage Distributors organization donated $10,000 to oppose a legalization initiative in California.

The Beer Distributors PAC, an organization that represents beer-distribution companies in Massachusetts, donated $25,000 to the Campaign for a Safe and Healthy Massachusetts which opposed cannabis legalization in 2016 in Massachusetts.

The Arizona Wine and Spirits Wholesale Association donated $10,000 to oppose cannabis legalization in Arizona in 2016.

Those amounts are a drop in the bucket from a political standpoint, but they are still significant in that they demonstrate the level of fear the alcohol industry has towards the cannabis movement.

Tensions continue to mount

In mid-February Molson Coors Brewing Co. listed cannabis reform as a ‘risk factor’ to its business model in reports filed with the U.S. Securities and Exchange Commission.

Below is what was stated:

“Although the ultimate impact is currently unknown, the emergence of legal cannabis in certain U.S. states and Canada may result in a shift of discretionary income away from our products or a change in consumer preferences away from beer,” officials wrote in the filing. “As a result, a shift in consumer preferences away from our products or beer or a decline in the consumption of our products could result in a material adverse effect on our business and financial results.”

Opposition to the expanding cannabis industry is not just limited to brewers either. A showdown has been underway between cannabis growers and vineyard owners.

Vineyard owners in Oregon have filed a lawsuit against nearby cannabis growers, claiming that the smell from the cannabis plants is harming the grapes that they are growing on their property.

Despite the campaign contributions to anti-cannabis efforts, filings, and lawsuits, not every alcohol company opposes reform.

Cross-industry collaboration

Some alcohol companies have decided to embrace the cannabis industry instead of opposing it.

The company that is probably the best example of that is Lagunitas Brewing Company.

Lagunitas once created a limited edition beer that contained cannabis terpenes (Supercritical) and has sponsored a number of cannabis events.

The company also created a beer, Undercover Investigation Shut-Down Ale, to commemorate the time the company lost its liquor license due to cannabis being consumed on company property.

In late 2017 Constellation Brands, which creates Corona beer (among others), made a massive investment in the cannabis industry with plans to create cannabis-infused alcohol beverages.

The alcohol industry pursuing plans in the cannabis industry makes some cannabis industry members and consumers worried.

It will be interesting to see if the two industries can successfully co-exist and/or collaborate, but only time will tell as it’s too soon to say for sure either way.

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