Marijuana’s Impact on Wine Sale — Bad or Terrible?

If you make a living in the wine industry, how ought you feel about this headline:

“A new study from OutCo and Monocle Research shows 51% of millennials in California will replace alcohol with marijuana.”

Further down in the story that ran in the form of a press release we get this nugget:

“Millennials will be more open to diversity in their consumption of recreational substances than older generations, with more than 50% of them substituting cannabis for alcohol altogether. The study further shows that one in five Generation Xers will be substituting marijuana for alcohol, as will 8% of baby boomers.”

Did you catch the key word? “Altogether”. The study finds that 50% of California Millennials will substitute cannabis for alcohol.  Completely. Not using the two together. Not a little of this and a little of that. Non-use of alcohol. Cannabis instead.

What of the results of this survey and poll are off by 100% and instead of 50% of Millennials discarding alcohol completely for cannabis, but rather 25% of Millennials completely discarding all use of alcohol and instead only using cannabis. Wouldn’t that alone, if you worked in the wine industry, concerning you?

I’ve heard very little concern spoken in public from members of the wine industry about how marijuana legalization will impact alcohol sales. Instead, all I’ve heard is people poo-pooing the impact and suggesting a coming synergy between the two industries.

In a recent NY Times article written by the Times Wine Editor Eric Asimov, we have this view of the situation from renowned winegrower and winemaker Phil Cotturi:

“As for competition, Mr. Coturri said he had not experienced it, except possibly in the hiring of seasonal workers for harvests….

“ ‘I see marijuana growing as something underground that is coming to the forefront,” he said. “It’s almost a companion piece. I don’t see competition with the wine industry at all.’”

A little earlier in the same article, we get this:

” The fine wine industry, however, has not panicked. Despite occasional efforts to pit wine and weed against each other, many in the wine business exude an air of mellow acceptance that the two substances can coexist in harmony.

“ ‘People are trying to say there is a threat, but I really haven’t talked to any wine industry person yet who actually sees it that way,’ said Tina Caputo, a freelance wine and food writer, who in August will be a moderator at the first Wine & Weed Symposium. The event, a wine industry initiative, will explore possible business opportunities in California, which legalized recreational marijuana use in November.”

What if Tina is wrong? What if Phil is wrong? What if the study showing Millennials giving up alcohol in huge numbers for marijuana is right?

I’m one of those who believe and who has said for many years that there can’t be any question about whether marijuana legalization will most certainly impact alcohol sales, including wine. The reason I know it will is because, despite the fact that in the wine industry we don’t talk about it much, wine is used by a number of drinkers as a means of getting high first and foremost. Now, wine also has the benefit of often tasting really, really good. But for a lot of people, particularly those drinking in the $5-$15 per bottle range, wine is a means of altering their consciousness. And this is exactly the primary reason for using cannabis.

Why wouldn’t there be substitution.

And this is also why you are seeing a very heaving PR effort by those in the cannabis industry to push the meme, “Cannabis is safer and healthier than alcohol“. Convince those drinking wine for the high that it’s safer and healthier to take a bong hit, then combine it with the fact that the high is likely cheaper and it’s pretty clear that you’ll see a good size move to cannabis.

In the survey that led to the conclusion that 50% of Millennials will move to Cannabis, the reasons for that move were described this way:

“In regards to safety, many expressed the fear of making poor decisions when consuming alcohol, which included driving over the legal limit. Cost also came into play, with many stating that their overall spend on alcohol outstrips that of

“Cost also came into play, with many stating that their overall spend on alcohol outstrips that of high quality cannabis.

“Finally, health was stated as a factor when substituting cannabis for alcohol. Participants shared that the effects of a hangover from alcohol lasted the entire next day, while high volumes of cannabis usage had no noticeable lasting effects; thereby making them feel healthier and more active.”

So, it seems the question for the alcohol industry (and wine) is what can be done to thwart the impact of marijuana legalization on alcohol beverage sales? The answer is nothing. It’s going to happen. But is there anything that mitigates the impact?

I want to be clear that I’m not advocating the wine industry undertake any of the following options for mitigating the impact of Marijuana sales on wine sales. I’m only suggesting that they are practical options.

-Institute a public and media relations campaign highlighting the dangers of using cannabis, highlighting that cannabis is used primarily to get high (unlike wine), and highlighting the negative health impacts of using cannabis.

-Take an aggressive lobbying approach to assure that regulations of the sale and distribution of cannabis are in no way laxer or easier to navigate than alcohol sales and distribution.

-Support local initiatives to keep cannabis sales out of local jurisdictions.

-Wine producers, retailers, and wholesalers can up their game of communicating the really superior experience, heritage and culture of wine over cannabis.

-Support federal efforts to stop state-based cannabis legalization.

These are not the only steps that can be taken to protect the alcohol industry in the face of cannabis legalization. Nor would most of them be effective due in large part to the required embrace of hypocrisy they require from the alcohol industry. But they are options.

I think anyone in the wine industry who denies this industry will be financially impacted by cannabis legalization has their head in the sand. I think it’s irresponsible for anyone in the industry to deny it. I think in five years the upward wine consumption trendline we’ve watch for decades will be reversed. I think low-end wines will be hit hardest. I think wine-growing regions better get aggressive in lobbying for relaxed local and state regulations on hospitality and tourism options.


5 Responses

  1. Clark Smith - April 20, 2017

    As a champion of the small winery, those wineries under 10,000 cases that make up 95% of winemakers but only 5% of cases, I was surprised to see no mention here of the very different effect of weed legalization one might expect on us small fry. You of all people know that your argument above, insightful as always, applies only to that segment Rick Jones likes to call the McWine Business.
    Tony Coturri isn’t wrong, he just isn’t a member of the wine industry you are addressing. He makes expensive, eclectic, unique wines not intended for the novice drinker. He is the quintessential example of the fascinating experimental whacko beloved by a lucky few, unknown to most, and reviled by some. Such is the fate to which we all aspire.
    I love small winery entrepreneurs because they have all given up their all for the love of…well, what? Certainly not so other people can get high. In this they are much like musicians, except the latter get to have a day job. Winemakers are all in.
    Nobody buys my $50 2007 Russian River Pinot Noir (eight years in very neutral oak) nor my 2005 Faux Chablis (the current release) to cop a buzz. While there is some charm in social lubrication, no winemaker threw away the life of ease most of them could have had as a dentist or stockbroker just so people could get high, and any consumer looking for a nice smooth escape won’t be after the peculiarities I bottle, nor any of my 10,000 colleagues.
    If the industry is deserted by party-loving riff-raff, it only makes my job easier.

  2. Tom Wark - April 20, 2017

    Clark,

    Thanks for reading and for your comment. I would, however, direct you to these to statements in the post:

    “But for a lot of people, particularly those drinking in the $5-$15 per bottle range, wine is a means of altering their consciousness. And this is exactly the primary reason for using cannabis.”

    “I think low-end wines will be hit hardest.”

    Hope to see you soon.

    Tom…

  3. Peter Morrell - April 20, 2017

    So??? Sorry Tom, but I believe people who live in glass houses shouldn’t throw stones. I proselytized about enjoying wine (a controlled substance) as a daily enhancement to life for 5 decades with what some might say was some notable success, but when I and my friends lit up it was always with a bottle of tasty wine in hand. Did I read your meaning correctly? I hope you are not intending to urge our inexpensive wine business’ to lobby to fight expanding cannabis legalization or lose market share? That would be very bad joss…

  4. Tom Wark - April 20, 2017

    Peter,

    Many would say with “some notable success”.

    I’m not attempting to throw stones. I’m simply looking at what the wine industry is up against. and I’m not anti-cannabis. I went to Humboldt State University in Northern California when I got a fairly good education in cannibis.

    Finally, you’ll note in the post that I wrote the following: “I want to be clear that I’m not advocating the wine industry undertake any of the following options for mitigating the impact of Marijuana sales on wine sales. I’m only suggesting that they are practical options.”

    Having been involved in lobbying in the wine industry as well as PR, I have a sense of which directions those most in the line of fire might go.

    Thanks for reading and for commenting.

  5. Tom Natan - April 28, 2017

    Absolutely on regulating the same as alcohol. If the state has a 3-tier system, then marijuana shops should have to buy from distributors and not directly from growers.


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