A lot of people are celebrating this season, and not because of the holidays. They’re celebrating the legalization of marijuana for recreational purposes in California, Maine, Massachusetts, and Nevada. Voters approved ballot initiatives in November to legalize recreational pot – with some important restrictions – in those four states. One group, however, isn’t celebrating: the $200 billion-a-year alcohol industry in the United States.
Although some consumers use both alcohol and cannabis, most brewers in the U.S. see cannabis as competition, and some industry groups have even made large contributions to anti-legalization efforts. The Boston Beer Company, which makes Sam Adams and a number of other brands, said in a regulatory filing in 2016, “It is possible that legal marijuana usage could adversely impact the demand for the company’s products” and “the craft beer industry.”
Brewers in Massachusetts gave $25,000 in donations this year to fight pot legalization in their state. Trevor Stirling, an investment analyst at Sanford C. Bernstein, says it’s no surprise that domestic brewers list legal cannabis as a potential risk factor. Stirling points out that the large international corporations like Anheuser-Busch do not consider pot legalization to be an immediate risk.
“Craft beer tends to appeal to a younger and more hipster crowd who are also more likely to be smoking cannabis,” Stirling explained to Financial Times. Budweiser drinkers are “less likely to smoke cannabis, so potentially there’s more risk for craft beer than for mainstream beer.” Beer makers aren’t the only ones who fear the potential competition of marijuana. Brown-Forman, the distiller of Jack Daniel’s whiskey, includes the legalization of cannabis as a potential risk factor in its accounts.
IS THERE ANY EVIDENCE THAT LEGAL POT HURTS ALCOHOL SALES?
So far, any evidence that legalizing pot actually has a negative impact on alcohol sales is scant, because only Washington and Colorado have had legal recreational marijuana for any significant duration of time. The Beer Institute, a national trade association, speaking primarily for the larger brewers, focuses more on the potential risks of cannabis use. The Institute states, “Given the few states where the sale of marijuana for recreational purposes is legal, there is a lack of data to determine any potential impact marijuana may or may not have on other industries.”
Colorado legalized recreational pot in 2012, but nothing suggests a leveling-off or a decline in alcohol consumption there. Tax revenue from alcohol sales in Colorado rose by 4.5 percent in the state in the first eight months of 2016 compared with the same period in 2015. In 2015, the increase in the first eight months was 2.7 percent over the same eight months in 2014. There seems to be “plenty of space” in the market for both the alcohol and cannabis industries to continue growing and flourishing.
Bart Watson, an economist at the Brewers Association, a trade group speaking for craft brewers, explains that when legalization lowers the price of pot, the purchasing power of pot consumers increases, making them more likely rather than less likely to purchase alcohol. Nevertheless, Vivien Azer, a managing director and senior research analyst at Cowen and Company, recently published evidence that marijuana has been increasing its market share among adult men – at the alcohol industry’s expense – slowly and incrementally for at least a decade. She believes that “the risk to alcoholic beverage consumption will become increasingly apparent.”
HOW ARE ALCOHOL PRODUCERS RESPONDING TO LEGALIZED CANNABIS?
Cowen and Company analysts also believe that the market for recreational marijuana in the U.S. could rise to $50 billion by 2026, nine times its current value. However, some alcohol producers see a chance to respond creatively to a challenge. Constellation Brands says cannabis could be used for flavor and perhaps in other ways. “While we have no plans to introduce a cannabis-related product, we are watching the market closely. It could be a potential opportunity,” the company said in a statement.
Over half the population of the U.S. now has access to medical or recreational marijuana. Pot is still prohibited at the federal level, which means that companies in the marijuana business have limited access to banking services. The U.S. Drug Enforcement Administration continues to classify marijuana as a “Schedule One” drug comparable to heroin. Nevertheless, investors are “high” on cannabis, so to speak, and it’s a rapidly-growing new sector of the U.S. economy.
Every recent survey shows that more than half of us in the United States support the legalization of marijuana, and that support rises to 70 percent for those under age 30. Surprisingly, support for legalization among those over age 50 has doubled since 2000, according to Vivien Azer at Cowen and Company, who adds that “voter momentum will likely ultimately spur action at the federal level.”
HOW IS DRIVING UNDER THE INFLUENCE OF MARIJUANA HANDLED IN CALIFORNIA?
While recreational marijuana consumption has been approved by California’s voters, driving under the influence is still considered a very serious crime in this state, and that’s not going to change. It doesn’t matter if a motorist is intoxicated by alcohol or by marijuana – the charge and the penalties are the same. Even a conviction for a first-offense misdemeanor DUI with no injuries or property damage can send a convicted driver to jail for up to six months in this state. Causing serious injuries or a fatality could send a driver to a state prison for a much longer sentence.
All intoxicated driving is against the law in California and is covered by California’s DUI statutes, whether a driver is impaired by marijuana, alcohol, an illegal drug or substance, a legal prescription, or an over-the-counter medication. Anyone facing a DUI prosecution in southern California will need the advice and services of an experienced Orange County DUI attorney. Of course, the best way to avoid DUI penalties is to avoid – entirely – driving under the influence.
With that in mind, whether you are celebrating the holidays or the legalization of marijuana in California this season, don’t drink – or smoke – and drive. The holidays are when California police agencies set up more sobriety checkpoints and tend to be “on the lookout” for intoxicated drivers. While an Orange County DUI attorney can help anyone who is charged with DUI, there’s no reason at all for drinking or smoking and driving, especially in southern California. Before you celebrate, arrange for a taxi or a limo, contact a ride-share service, arrange for a designated driver, or get a room for the night. Whatever you celebrate this season, do it safely.