Cannabis May Pose a ‘Long-Term Risk’ to the Alcohol Industry

February 21, 2019, 6:10 PM UTC

The legal marijuana industry could emerge to become one of the biggest threats to the multi-billion dollar beverage alcohol business, according to a new report from a top analytical firm.

The IWSR, the leading source of data and intelligence on the alcoholic beverage market, in conjunction with and BDS Analytics, says a growing number of consumers, especially millennials, are showing a preferences to consume both booze and buds, versus older generations which tend to stick with just one. That could cut into long-term loyalty efforts by beverage makers, especially those in the beer and spirits fields.

“Our research shows that up to 40% of adults 21 and over consume cannabis in states where it’s legal,” said Jessica Lukas, vice-president at BDS Analytics. “Cannabis presents substantial opportunities across consumer industries, including new occasions that alcohol cannot and will not play. Consumers will continue to look to cannabis products over alcohol for occasions when they are feeling creative, need to get motivated, or seeking health, medical or wellness benefits.”

Certainly, money spend on cannabis is not necessarily money taken away from alcohol companies. But the IWSR is warning that makers of adult beverages need to begin anticipating consumer’s shifting demands now if they want to avoid trouble down the road.

Last year, Americans drank 3.345 billion cases of alcohol, a 0.8% decline from 2017. That worked out to about 7.9 billion gallons of booze, roughly 160 million bathtubs full.