Big Alcohol Fights Marijuana Legalization
I love my booze, but I don’t think I’m alone when I say that while pot is great there are many occasions when it could actually be even more enjoyable when paired with a delicious stout. Sadly, the alcohol companies don’t share the same kind of love.
The US alcohol industry is reportedly worth $200 billion, so it’s no surprise that they aren’t exactly feeling high about thoughts of marijuana legalization. The industry feels threatened and more companies are fighting legalization of our favorite plant.
According to a 110-page report by Vivien Azer from Cowen and Co, “While the alcohol beverage category has looked insulated from cannabis thus far—from a revenue perspective—with the legal market still in its infancy we think the risk to alcoholic beverage consumption will become increasingly apparent.” She adds that more men are replacing booze and prefer a toke. The alcohol incidence for American men has dropped 200 basis points, while marijuana use has increased 260 basis points, Azer says.
The study also revealed some interesting findings. “Over the last decade, while we have seen a rise in drinkers who use cannabis, we have also seen declines in cannabis users who drink,” states Azer. The Cowen report consolidates studies from 10 analysts across a wide range of industries. The study also estimates that the legal cannabis market is worth around $6 billion in sales yearly, and 32 million American adults have admitted to using cannabis in the 4 states which have legalized recreational use as well as the 25 which have provisions for medical marijuana. The analysts also estimate that an additional $25 billion can be added from black market sales, yet once these make it into the legal marijuana market and the use of pot grows even more, the market could be worth $50 billion come 2026. The analysts add, “With more cannabis dispensaries in Colorado than Starbucks, assuming full legalization, we estimate there could be as many as ~17,000 legal cannabis retailers in the U.S. upon full legalization.”
According to Daniel Rees, an economist at the University of Colorado, people will use pot as a substitute to booze if given the chance. According to his research, “studies based on clearly defined natural experiments generally support the hypothesis that marijuana and alcohol are substitutes.”
Alcohol Fights Back
The booze industry is worried that their market share will take a hit, and they are trying to do something about it. Earlier in September, a beer industry group called the Beer Distributors PAC made a massive donation worth $25,000 to an organization in Massachusetts which was established to fight marijuana legalization. The donation to the Campaign for a Safe and Healthy Massachusetts is currently at third place among the biggest donors towards the anti-marijuana group.
The Arizona Wine and Spirits Wholesale Association also donated $10,000 worth to another group fighting legalization. Arizona is one of the 5 states with legal marijuana initiatives in the ballot for November’s elections. In 2010, the California Beer and Beverage Distributors also donated $10,000 to support a campaign backed by law enforcement to fight legalization.
However, this doesn’t speak for the entire alcohol industry since many craft brewing companies are actually welcoming more relaxed marijuana laws.
Securities and Exchange Commission filings actually reveal that some of the big-name alcohol companies are open about being afraid that cannabis can threaten their revenue. The Brown-Forman Company, the same guys who make the delicious Jack Daniels that we love, stated in their 10-k filing: “consumer preferences and purchases may shift due to a host of factors, many of which are difficult to predict, including … the potential legalization of marijuana use on a more widespread basis within the United States, and changes in travel, leisure, dining, gifting, entertaining, and beverage consumption trends.”
But what’s there to be afraid of? Look at Colorado: alcohol and beer sales have gone up together with pot legalization, based on state tax records. While tax from marijuana sales tripled from June 2014 to May 2015, sales of booze actually continued to grow in a steady pace.
It seems that big alcohol is so afraid of cannabis legalization that they’ve even resorted to bribing congress to be anti-marijuana. Wikileaks found an email which was sent to the DNC Finance Director Jordon Kaplan, stating:
“** A message from Wine & Spirits Wholesalers of America: While neutral on the issue of legalization, WSWA believes states that legalize marijuana need to ensure appropriate and effective regulations are enacted to protect the public from the dangers associated with the abuse and misuse of marijuana.
23 states and the District of Columbia have legalized medicinal marijuana while Alaska, Colorado, Oregon, Washington and D.C. have legalized possession and recreational use. In the years since the state legalized medicinal use, Colorado law enforcement officials have documented a significant increase in traffic fatalities in which drivers tested positive for marijuana.
Congress should fully fund Section 4008 of the FAST Act (PL 114-94) in the FY 2017 Appropriations process to document the prevalence of marijuana impaired driving, outline impairment standards and determine driving impairment detection methods.”
If you take a look at the WSWA website, they try to come out with a neutral stance but what they did isn’t helping their cause at all nor does it improve the image of the booze industry. Cheap shot, guys.
As the CDC says, "In 2014, 9,967 people were killed in alcohol-impaired driving crashes, accounting for nearly one-third (31%) of all traffic-related deaths in the United States."
Yet, big alcohol is worried about driving with a joint.
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