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Increased cannabis consumption in the US “poses a long-term risk” to the alcoholic beverage industry.
Increased cannabis consumption in the US “poses a long-term risk” to the alcoholic beverage industry.

Cannabis ‘poses long-term risk’ to US alcohol industry


By Jules Scully - Feb 26th, 08:52

Increased cannabis consumption in the US “poses a long-term risk” to the alcoholic beverage industry, according to new research from the IWSR and BDS Analytics. 

Though legal cannabis is currently only a fraction of comparable alcohol sales, the study shows that the risk to beverage alcohol is expected to expand as cannabis acceptance and consumption grows, particularly among beer and spirits drinkers.

The report also notes that millennial consumers represent 45% of ‘dualists’ (those who consume both cannabis and alcohol), which it says is a “sobering statistic” for alcohol companies who are trying to maintain sales in this important demographic.

Titled ‘Beverage Alcohol, Cannabis and the Changing U.S. Consumer: What are the Real Risks and Opportunities to Consumption Behavior?’, the report is an initiative between IWSR Drinks Market Analysis and BDS Analytics, the consumer research analysts in the fields of beverage alcohol and cannabis respectively.

The US cannabis industry has surged in recent years – ten states have now approved adult recreational use of cannabis products and 34 states have approved cannabis for medicinal purposes.

Jessica Lukas, vice-president of BDS Analytics, said: “Our research shows that up to 40% of adults 21 and over consume cannabis in states where it’s legal. 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.”

Brandy Rand, IWSR US president, added: “Though not yet mainstream, cannabis adoption is certainly growing in states where it’s legal and does pose a risk to the beverage alcohol industry in the future."

“It’s important that alcohol brands pay attention to their consumers, recognising that some occasions may result in a decrease in alcohol consumption in place of, or alongside, legal cannabis.”

The news follows a study by the Distilled Spirits Council published last month, which suggested that spirits sales have not been negatively impacted in the three US states that have legalised recreational cannabis the longest.

It revealed that since recreational cannabis was legalised, spirits sales grew in Colorado by 7.6%, in Washington state by 5.4% and in Oregon by 3.6%.

Distilled Spirits Council chief economist David Ozgo said: “Simply put, the data show there has been no impact on spirits sales from recreational marijuana legalisation.”

Read more about: us | spirits | liquor | cannabis | beverage industry | alcohol

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