Financial analysts say they expect the expansion of the marijuana legalization movement will continue to post a “significant threat” to the alcohol industry, citing survey data that suggests more people are using cannabis as a substitute for alcoholic beverages such a beer and wine.
A report from Bloomberg Intelligence (BI) projects that slumping sales of wine and spirits “may extend indefinitely,” which will “stem largely” from the increased consumer access to “legal cannabis,” as well as rising popularity of made-to-go drinks, for example.
They estimated that the combined influence of cannabis access and shifts in consumer demand for certain alcoholic product types accounts for a 16 percent share valuation discount offered by the beverage company Constellation Brands, which owns major brands including Corona, Modelo, Pacifico and Casa Nobel Tequila.
“The use of cannabis among consumers is on the rise, and we believe it’s being substituted for alcoholic beverages” based on an August 21 survey from BI involving 1,000 adults, it said. “We also anticipate that increasing US consumer access to recreational marijuana will be a significant threat to all alcoholic drinks, particularly beer and wine, given their lower price points relative to liquor.”
According to the survey, nearly half of respondents reported using cannabis as an alcohol substitute at least once per week. Additionally, 22 percent said they use marijuana more often than alcohol.
Financial analysts say they expect the expansion of the marijuana legalization movement will continue to post a “significant threat” to the alcohol industry, citing survey data that suggests more people are using cannabis as a substitute for alcoholic beverages such a beer and wine.
A report from Bloomberg Intelligence (BI) projects that slumping sales of wine and spirits “may extend indefinitely,” which will “stem largely” from the increased consumer access to “legal cannabis,” as well as rising popularity of made-to-go drinks, for example.
They estimated that the combined influence of cannabis access and shifts in consumer demand for certain alcoholic product types accounts for a 16 percent share valuation discount offered by the beverage company Constellation Brands, which owns major brands including Corona, Modelo, Pacifico and Casa Nobel Tequila.
“The use of cannabis among consumers is on the rise, and we believe it’s being substituted for alcoholic beverages” based on an August 21 survey from BI involving 1,000 adults, it said. “We also anticipate that increasing US consumer access to recreational marijuana will be a significant threat to all alcoholic drinks, particularly beer and wine, given their lower price points relative to liquor.”
According to the survey, nearly half of respondents reported using cannabis as an alcohol substitute at least once per week. Additionally, 22 percent said they use marijuana more often than alcohol.
Meanwhile, a multinational investment bank similarly said in a report late last year that marijuana has become a “formidable competitor” to alcohol, projecting that nearly 20 million more people will regularly consume cannabis over the next five years as booze loses a couple million drinkers. It also says marijuana sales are estimated to reach $37 billion in 2027 in the U.S. as more state markets come online.
Read more at Marijuana Moment