The Evidence Is Piling Up: Cannabis is Bad For Wine

A new study reported in the Washington Post shows that legal marijuana sales are a key factor in reducing sales of alcohol:

“Alcoholic beverage sales fell by 15 percent following the introduction of medical marijuana laws in a number of states.”

Down the road, when this phenomenon is confirmed after legalization in enacted in a number of states (particularly California) the questions will be 1) which types of alcohol tend to be most impacted by a switch to cannabis use, 2) which price point for wine is most impacted, and 3) what is the demographic characteristics of those who will substitute cannabis for wine?

Many in the wine industry and particularly those in the cannabis industry here in California have claimed that cannabis will “compliment” wine use and have little or no impact on wine sales. This notion is close to being entirely debunked. 

Meanwhile, we continue to see conferences and seminars addressing the question of how cannabis and wine can work together to co-promote through events and tourism. From a strictly business perspective, I can’t see why wine would want to lend its greater prestige to cannabis by working with the industry to help them promote their goods as it will only lead to a reduction in wine sales.

As cannabis makes greater and greater inroads into wine’s market share, wine will have to do a better job of promoting the cultural and historical aspects of wine that cannabis simply can’t match. Additionally, wine will need to make the point that wine is, unlike cannabis, about much more than just getting high.

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3 Responses

  1. Bill McIver - December 4, 2017

    Tom, you predicted this months (years) ago.

  2. Gabriel Froymovich - December 4, 2017

    Tom,

    This is the most solid evidence I’ve seen yet for your assumption that legalization will hurt us. But do remember that the study is not yet conclusive; that it only looks at total alcohol, not wine; and that it looked only at the skewed 40% of the market that is included in scan data. That being said, it’s the first time I’ve seen evidence to worry.

    I have always thought the idea of wine and cannabis as generally complementary products was a silly hope (of course there is some niche for whom it is, but the effect of this is insignificant tot he broader market). If you’ll pardon me for cross-posting, here is a link to my summary of evidence and conclusion: https://www.vineyardfinancialassociates.com/single-post/2017/12/04/First-Evidence-We-Should-Worry-About-Marijuana-Legalization

    Excerpt: “If I had to guess based on the evidence I have seen at this point, I would assume that (a) legalization will reduce total alcohol consumption by 15% or less; (b) legalization will reduce wine consumption by significantly less than 15%; and (c) that small-production, premium wineries will see even less of a hit. Whether or not the hit to wine results in a detectable reduction in sales for all wine and/or the premium segment remains to be seen.”

  3. Patricia - December 5, 2017

    Hmmm…Many decades ago, when cannabis was terribly illegal, some of my male colleagues and friends at University managed to get hold of a few “lids”. Rather than smoke it, they wanted “funny” brownies or “funny” gingerbread. But the men’s colleges didn’t have kitchens, so I told them I’d bake the various concoctions for them. Not a problem in the ladies’ colleges, apparently? To be fair, we were on a private campus into which the police were only permitted if invited, so I suppose we didn’t think there was much of a risk. We were more likely to get caught out for having a beer in public on the beach (which WAS illegal, too!)

    I tried a piece of the gingerbread once, but got no reaction, so I decided to revert to wine. And the drinking age was 18 way back then, so having wine or another alcoholic beverage was perfectly legal, providing you weren’t driving a car if inebriated.

    Chacun a son gout.


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