As more states continue to legalize recreational marijuana, some of the biggest uncertainty has come from the alcohol industry. The question: Will an increase in pot use lead to a reduction in consumption of beer, wine and spirits? The Wall Street firm Cowen has repeatedly made its position clear: Yes, weed spells trouble for the beer world. And one of their analysts decided to hammer home that point by releasing new research—on 4/20 no less.
As we wrote about back in November, Cowen’s Vivien Azer—managing director and senior research analyst specializing in the beverage, tobacco and cannabis sectors—was already expressing concern about the underperformance of beer in states like Colorado, Oregon and Washington months ago. Now, she’s back again with an even more dire prediction for the beer business: Sales could struggle for 10 years. “We believe alcohol could be under pressure for the next decade, based on our data analysis covering 80 years of alcohol and 35 years of cannabis incidence in the US,” Azer was quoted as writing by CNBC. “Since 1980, we have seen 3 distinct substitution cycles between alcohol and cannabis; we are entering another cycle.” She makes it sound like were entering the beer equivalent of another ice age.
- California’s First ‘Wine & Weed Symposium’ Arrives in August
- How Weed Smells to Wine Experts
- Snoop Dogg Says He's Never Smoked Marijuana with Potluck Cohost Martha Stewart: 'She Don't Partake'
Azer stresses that she has the data to back up her assertions. Specifically, she cites how an 18 percent uptick in marijuana use during the 1980s and 1990s correlated to a 22 percent drop in alcohol consumption. Probably even worse news for the future is that 18 to 25-year-olds have seen their drinking levels decline for five straight years while their marijuana use has increased over that same period. “Coming out of the recession, alcohol's recovery has been uneven, while cannabis incidence (and legal sales) have both risen markedly. We believe this sets up the alcoholic beverage category for another cycle of falling per capita consumption,” she wrote. “With cannabis adoption accelerating, alcohol volumes will remain under pressure.”
Though other analysist have come to similar conclusions—such as a recent report from the Cannabiz Consumer Group saying that pot could cost the beer industry billions—not everyone agrees with Azer’s prediction. In January 2016, Taylor West of the National Cannabis Industry Association said, “Given the relative sizes of the two markets, I don’t see cannabis taking over beer anytime soon.” Yeah, everyone knows the best parties have plenty of both, dude.