How Will the Cannabis Industry Affect Alcohol Use?
January 24th, 2019
Many stakeholders in the cannabis and alcohol industries are eager to see how and if marijuana legalization will impact alcohol consumption. Due to cannabis only recently becoming more accessible, the degree to which it affects alcohol use is still uncertain, but early studies and observations suggest that many people are reducing their alcohol intake in favor of marijuana consumption.
A recent joint study by researchers at the University of Connecticut, Georgia State University, and Universidad del Pacifico suggests that there’s a reduction in alcohol consumption in the United States and it’s correlated to marijuana’s increased legality and accessibility.
Rather than survey consumers, the study used alcohol data from the Nielsen Retail Scanner for 90 alcohol chain stores between 2006-2015. The researchers opted for this data in lieu of surveys because people tend not to be truthful about their frequency and amount of alcohol intake. The study compared alcohol sales in states where medical marijuana is legal against states where it isn’t, including data before and after medical cannabis became legal in a state. Furthermore, the working paper considered socioeconomic status as that can impact how much alcohol various populations consume.
Over the 10-year time period the researchers studied, counties in states with legal medical marijuana showed nearly a 15% reduction in monthly alcohol sales. The study concluded that alcohol and cannabis are often substitutes for one another and, when presented with the option to consume marijuana, many alcohol users will forgo alcohol in favor of cannabis.
The study’s findings are even more significant considering that the study dates back to when medical cannabis programs were new in the states studied and cannabis regulations were more restrictive than they are now. However, the fact that the working paper addressed medical cannabis rather than recreational cannabis creates some questions about whether recreational cannabis results in a similar reduction in alcohol use. Alcohol tax revenues in Washington and Colorado, legal recreational states, have remained relatively stable since recreational use became legal in 2014.
That being said, because legal recreational marijuana is so new, there are many variables that have yet to be studied with respect to the relationship between cannabis and alcohol. In addition to a reduction in alcohol sales, it helps to look at how overall cannabis sales compare to alcohol. In 2018, Aspen’s cannabis sales eclipsed alcohol sales for the first time in U.S. history. According to an end-of-year sales tax report, cannabis is the fastest-growing industry of Aspen’s 12 retail sectors.
These developments have raised the alarm for alcohol businesses. In early 2018, Molson Coors determined that legal marijuana is a risk to the company’s growth and development: “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.”
Molson Coors isn’t alone with its concern; Boston Beer and Craft Brew Alliance also expressed concern while Constellation Brands, the owner of major alcohol brands like Corona, made a large investment in the cannabis industry.
Like most aspects of the cannabis industry, there needs to be more research to determine how, exactly, the increased accessibility and legality of cannabis will affect alcohol consumption. However, early research and observations suggest that the accessibility of medical and recreational marijuana reduces consumer interest in alcohol, which is causing some alcohol companies to invest in the marijuana industry while others are strategizing for how to better combat the competition.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
Follow Us on Social Media
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.