Your New Years’ Bubbly May Soon Be Pot Infused
Marijuana legalization across much of the U.S. — spurred by election-night victories — is creating a huge new market for legal weed. Voters approved marijuana for recreational use in California, Maine, Massachusetts and Nevada. That brings the tally of states with legal pot to eight, plus Washington, D.C., meaning one in five American adults now lives in an area where it will be legal to get high.
Though marijuana has been viewed as a threat to the spirits industry, money guys see it as an opportunity. The industry is expected to grow more than eightfold in the next decade, from $6 billion in 2015 to $50 billion by 2026, according to data from Cowen & Co. That’s about the size of the North American market for salty snacks.
Just Give It Time…
Why wouldn’t big business, so to speak, be acutely interested in a category of that magnitude? If there’s a lot of money involved, it’s not going to be left to small mom-and-pops.
The national elections may have been more mixed for Constellation, a company considered particularly vulnerable to a Donald Trump presidency. Mexican imports account for more than half of the Victor, New York-based company’s net sales, and Hispanic consumers make up 40 percent of its customers. Trump, of course, has pledged to build a wall between the U.S. and Mexico and to renegotiate the North American Free Trade Agreement.
Don’t Fret Just Yet…
A unified Republican government should be good for business overall, most claim.
A more immediate barrier for Constellation is that pot is still illegal under federal law, and as an alcohol seller, the company relies on the federal government for permits and licenses.
Others in the booze industry have been less stoked about legal pot, afraid that it will cannibalize alcohol sales. In Massachusetts, a pair of alcohol industry trade groups gave $75,000 to the Campaign for a Healthy and Safe Massachusetts, which opposed its measure. In Arizona, where voters chose to keep marijuana legal only by prescription, the state’s Wine & Spirits Association gave $10,000 to the anti side.
Numbers Support The Need…
The number of drinkers who also smoke cannabis has grown over the past decade, while the number of pot smokers who drink has declined, according to data from Cowen and the National Survey on Drug Use and Health.
For the moment, there seems to be an ample market for both. Alcohol sales haven’t declined in Colorado or Washington since legalization in those states.