How Alcohol Companies are Dealing with Cannabis Legalization

What are Big Alcohol Companies Doing about Marijuana Legalization? from CannabisNet on Vimeo.

If there are two comparable recreational substances on the market – it’s alcohol and tobacco. I know some of you are quietly raging about that statement. “Alcohol and Cannabis are NOTHING ALIKE!”

That is true, the substances are completely different. The safety profile of cannabis is far better than that of alcohol. However, alcohol and cannabis are both substances used for its recreational effects. These are also some of the more common substances used by the vast majority of the people.

In fact, over the years, alcohol companies have seen a decline in beer sales in places that have legalized weed. It’s not a significant number yet, however there is a steady decline over the years. This is because within the legal recreational market – Cannabis is a direct competitor to beer and other alcoholic beverages.

Consumers often find that cannabis is the superior choice when deciding between the substances. Firstly, because irrespective of how much cannabis you smoke, you won’t ever get a hang-over. Additionally, you don’t have the fear of dying due to overconsumption.

These are important points for consumers who just want to take the edge off.

Of course, alcohol companies aren’t stupid either. They are noticing the trends and are doing something about it.

If you can’t beat them…eat them!

Understanding the behavioral habits of consumers, people who consume cannabis often start cutting back on their drinking activities for the above mentioned reasons. This is why the alcohol industry would never be able to fully compete with the cannabis industry in terms of “which recreational substance is better”.

Hands down…cannabis would win every time.

As cannabis continues to get legalized all over the world, it’s only a matter of time before every consumer will have the options to choose between cannabis and alcohol.

And here is where the alcohol companies have found a way to corner a part of the cannabis market before it goes completely global.

Non-Alcoholic Cannabis-Infused Drinks! It’s a blooming new market and are perfect for alcohol companies to integrate into their supply chain.

We’ve seen several alcohol companies invest large sums of money into cannabis businesses. For instance, Constellation Brands (owners of Corona) just dropped $4 billion on Canopy (a Canadian Cannabis company) to make cannabis-infused drinks.

This is quite significant because it’s one of the largest investment pools in modern cannabis history. Other alcohol companies such as Heineken also partnered with a cannabis companies to do the exact same thing.

Why is this not a bad thing?

I’m sure there are plenty of you who would like to have alcohol companies as far away from the cannabis industry as possible. Putting aside all the emotional reasons, there is a positive side to all of this.

Alcohol companies already have the infrastructure to produce mass amounts of cannabis infused drinks. Currently, there aren’t too many companies focused on the cannabis beverage sector within the industry.

For newer companies to build the infrastructure and establish their supply chain will take many years to complete. Why not simply integrate this growing sector into an already established model that has shown success over many years?

Their infrastructure will allow them to mass produce cannabis beverages which would drive down costs and will ultimately benefit the end-consumer. Furthermore, the fact that alcohol companies are creating an alternative to their alcoholic beverage also has a lot of unforeseen benefits.

For instance, we don’t know if this move will further dig into their alcohol sales? If a consumer is presented with a non-alcoholic recreational substance vs let’s say a bottle of wine…what would they choose?

Obviously, if you’re an alcoholic you’re going for the booze…however for the rest of us that enjoy a drink every now and then…I’d much rather feel the buzz of cannabinoids over the buzz of ethanol. That’s me personally, however I recently went around and did a small unscientific survey within my personal social network.

Most people opt in for the cannabis drinks over the alcoholic ones.

This doesn’t mean that people will stop drinking alcohol entirely, but it might reduce the number of people buying alcoholic beverages.

This results in fewer people drinking alcohol and fewer people getting behind the wheel of a car under the influence. They might do it under the influence of a cannabis-infused drink, however the level of impairment comparatively between the two substances renders cannabis ‘less-mind-altering’ than someone who is drunk.

In other words, you pose less of a risk being under the influence of cannabis as being under the influence of alcohol.

Of course, these are all suppositions at this point but there is one thing we can say for certain…if the alcohol industry is gearing up for legal cannabis…then we can in all likeliness expect legal cannabis to be around the corner.