alcohol Archives - Green Market Report

Peggi CloughMay 9, 2018


In states where legalization has occurred, recreational marijuana consumers are now using far less alcohol and over-the-counter medications, according to a new report by High Yield Insights.

The consumer behavior company looked at feedback from recreational users in states where recreational cannabis is legal. They found that more than 20 percent of people who consume marijuana recreationally are using 27 percent less OTC pain relievers and 21 percent less alcoholic beverages. Those weren’t the only steep drops found, either. The report also indicated those consumers are using 22 percent fewer sleep aids, consuming 20 percent less beer, and 18 percent less wine.

“We are just starting to grasp how legalization has impacted consumer behavior, be it spending, usage occasions, or shopping habits. Understanding these changes will lead to new growth opportunities for cannabis and further disruption for other categories,” said Mike Luce, co-founder of HighYield Insights. “Our findings uncovered promising consumer niches for the industry as well. For example, many older consumers 55+ are reengaging with marijuana, with 56 percent reporting a return to marijuana after having tried cannabis products at a younger age.”

The High Yield Insights report concluded that people are using recreational cannabis for pain, anxiety, and sleep due to the fact that the largest total decline in use was in pharmaceuticals. Prescription pain reliever use dropped 13 percent; anxiety medications, 13 percent; and prescription sleep aids, 11 percent.

According to the survey, when asked which type of occasion they typically use cannabis for, the top answers were for relaxation, as a sleep aid and to socialize at casual get-togethers. Other reasons or occasions included creativity, anxiety and before a meal with a friend or partner. People between the ages of 35-44 were more likely to use cannabis for relaxation, while younger consumers used it before various social activities.

Nearly half of the people surveyed use marijuana multiple times a week. Men are more likely to be heavy users, with 50 percent of them using it multiple times a week. Women were close behind at 47 percent. Sixteen percent of consumers use cannabis 3-4 times a month, while 13 percent use 1-2 times a month. Twenty-one percent of people surveyed use cannabis less than once a month.

The report showed that convenient forms, such as edibles and pre-rolls, are in high demand.
It concluded that packaging explaining a product’s effects is necessary to assist people who may not be familiar with the strain they’re purchasing.

The survey found that 65 percent of recreational cannabis consumers see legalization as positive for their communities, even though some are concerned with underage users.

High Yield Insights believes the report can be used by everyone in the cannabis industry to better understand consumers and their wants and needs. More information can be found in their “Recreational Cannabis Consumer” report.

Jack SmithMay 9, 2018


A new report from Moody’s highlights the impact that legalized marijuana could have in the U.S. and Canada and the implications for other recreational substances, such as alcohol could be damning.

Moody’s estimates that marijuana could replace alcohol “on some occasions,” but spirits makers aren’t sitting on their laurels. Beer maker Constellation Brands (NYSE: STZ) purchased a 9.9 percent stake in Canopy Growth, a Canadian cannabis company. Additionally, Scotts Miracle Gro (NYSE: SMG) and leaf tobacco company Alliance One International have both acquired or invested in cannabis-related companies.

In the report, Moody’s notes that the legalization of marijuana could impact tax revenue from alcohol and potentially create “modest downward pressure on the use of pharmaceutical products,” especially those used to treat pain, anxiety, and depression as marijuana would theoretically replace them for treatment.

The negative effect would be felt greater at smaller pharmaceutical companies, particularly those with nascent drug pipelines, Moody’s says.

“Some small, unrated pharmaceutical companies are developing products based on the chemical cannabidiol, with one product advancing to the FDA review stage,” said Michael Levesque, a Moody’s Senior Vice President. “Thus far, large, traditional pharmaceutical companies haven’t invested heavily in cannabidiol, but that could change if smaller drug makers develop a market for these products.”

There is uncertainty about how the U.S. tobacco companies would enter the sector if and when marijuana is legalized at the federal level. Altria (NYSE: MO) and Vector Group (NYSE: VGR) have seen cigarette smoking on the decline for several years and there remain several questions about heated tobacco products and their long-term viability.

Still, the legalization is likely to have some modest positive impact on tax revenue, especially for the areas where it’s already legal.

“For US states and local governments that allow retail sales of marijuana, the related tax revenue is marginally credit positive,” said Grayson Nichols, a Moody’s Vice President-Senior Analyst in a press release. “Even for states with mature industries, such as Colorado, and large states like California expected revenue will remain only a small share of annual general fund revenue, given the limited opportunities for significant market expansion.”

In the U.S., 29 states have legalized some form of marijuana use. Nine states, including the District of Columbia, allow it to be used for recreational use, though it is still illegal at the federal level.

Canada is expected to legalize marijuana across the entire country sometime this summer. However, recent industry reports have noted that Prime Minister Justin Trudeau and his team could push that back to the fall, as opposed to July, as had been previously thought.

As with the U.S., Moody’s notes its difficult to anticipate how legalization would impact tax revenue in Canadian provinces.

“Given Canadian provinces’ limited experience with legalization, competitive pressures and calls to offset the costs of increased policing, we anticipate limited fiscal gain from legalized marijuana,” observed Michael Yake, a Moody’s Vice President – Senior Credit Officer. “On the other hand, legalization has the potential to reduce judicial burden, boost employment and offer a new revenue stream for First Nations populations. Suffice to say, if passed, the transition to adopting legal cannabis is expected to be complicated in the medium-term.”

That uncertainty has impacted the share price of many Canadian-based cannabis companies, including those in the Green Market Cannabis Index.

William SumnerApril 4, 2018


From Mesopotamia to ancient Rome, people have been infusing alcohol with cannabis for as long as cannabis has been around. In recent years, cannabis-infused alcohol has seen a resurgence of public interest, due largely to the spread of legalized cannabis in the United States. Most recently, the creators of Blue Moon announced that they would develop and release their own brand of craft cannabis beer.

But while cannabis beer and liquors have generated some interest, the bulk of the public’s attention has been centered squarely on the idea of cannabis wine, or cannawine as some call it, and it is easy to see why. Both cannabis and wine have a rich tradition of craftsmanship, which perfectly lends itself to the artisanal craft markets.

Perhaps the most famous brand of cannawine on the market at the moment is Know Label Wine Tincture, which is owned by singer-songwriter Melissa Etheridge. As the name implies, Know Label is technically not a wine but rather a “wine tincture.” The reason why it’s called a tincture is largely for legal purposes.

No U.S. state allows for the production of cannabis-infused alcoholic products. By calling Know Label a tincture, which is defined as “a medicine made by dissolving a drug in alcohol,” and by only selling it to medical cannabis patients, Etheridge is able to just barely skirt around the law. Other brands aren’t so lucky.

Currently, Know Label is the only product on the market that offers both THC and alcohol in one product.  Instead, most other “cannabis-infused” alcoholic products on the market, from cannabis vodka to cannawine,  will usually contain cannabidiol (CBD); a trend which Warren Bobrow finds disappointing and dishonest.

Known as the Cocktail Whisperer, Bobrow is a chef and mixologist who has made a name for himself in recent years as a cannabis cocktail guru. In 2016, Bobrow wrote the book “Cannabis Cocktails, Mocktails, and Tonics: The Art of Spirited Drinks and Buzz-Worthy Libations,” a how-to guide on creating cannabis-infused cocktails.

“They’re selling these hemp-flavored vodkas, and people see the marijuana leaf and immediately think they’re going to get high,” lamented Bobrow. “This is a product that has absolutely no THC, yet it is being framed as sold as something that gets you stoned, and I have a lot of difficulty with that.”

Bobrow went on to say that not only do many of these products pull a bait-and-switch, they’re also generally poor products to begin with. One brand in particular that Bobrow singled out was the California-based Mary Jane Wines, which he described as tasting like a “muddled mess.”

“The wine was out of balance,” added Bobrow. “There were no refreshing qualities and it certainly didn’t taste like something that I would be proud to serve on my dinner table.”

But while some try to pull a bait-and-switch or skirt the law by reclassifying their product, other brands are trying to redefine what cannawine means altogether, like Rebel Coast Winery. Offering a cannabis-infused sauvignon blanc, Rebel Coast sets its cannawine apart by taking out the alcohol and leaving in the THC.

To do this the company makes a normal batch of sauvignon blanc, which is then sent to a third party processor to remove the alcohol. The company then infuses the alcohol-free wine with cannabis using a proprietary process. According to Rebel Coast Co-Founder & Chief Operations Officer, Alex Howe, the end result is a product that tastes very similar to regular bottle but with a cannabis kick.

“One aspect that we have probably put the most time and resources into is making it taste it good, ” said Howe. “We’re trying to stay as close to the wine bottle experience as possible, we’re just swapping out one key component for another.”

Rebel Coast’s cannawine is not quite on the market yet, but you can pre-order a bottle online. Pending a successful rollout, the company hopes to start selling their cannawine in states outside of California where cannabis is legal.

So far that looks more like an inevitability than a maybe. The company has already received a large number of pre-orders for their cannawine, which Howe believes is thanks in large part to the massive consumer interest in finding an alternative to alcohol.

“I meet so many people who have either given up drinking or are looking to cut back on alcohol because they don’t like the negative side effects, and they’re looking for a better alternative,” said Howe. “I think a lot of people look to cannabis as that alternative.”

Not a big fan of wine? Not to worry, cannabis and hemp based beers are quickly coming to market. Stay tuned for when Green Market Report takes you into the world of cannabis beer.

Debra BorchardtFebruary 15, 2018


In states where marijuana has been legalized, alcohol sales have started to slide. Big alcohol companies admit they are keeping an eye out for this new competition for recreational dollars.

The latest to make a comment is Molson Coors Brewing Company (TAP) whose history goes back to the state of Colorado, ground zero for legalized recreational marijuana. In the company’s 10K filed yesterday it stated, “Although the ultimate impact is currently unknown, the emergence of legal cannabis in certain U.S. states and Canada may result in a shift of discretionary income away from our products or a change in consumer preferences away from beer. As a result, a shift in consumer preferences away from our products or beer or a decline in the consumption of our products could result in a material adverse effect on our business and financial results.”

The company even noted during its conference call that 21 to 24-year-olds have “primarily walked away from beer.”

In 2017, cannabis sales topped alcohol sales in the ski town of Aspen, CO. There are now more dispensaries in the town than there are liquor stores.

At a Bloomberg event, it was reported that Alexandre Ricard, who runs the Beefeater gin and Havana rum maker Pernod Ricard (PDRDY), said his company was “watching it closely” when asked whether he was monitoring the cannabis sector.

Constellation Brands (STZ) seems to be the only alcohol company so far that is fighting its competition by buying in. Last fall, the company which is known for its Corona beer brand bought a 9.9% stake in Canadian cannabis company Canopy Growth.

“Canopy Growth has a seasoned leadership team that understands the legal, regulatory and economic landscape for an emerging market that is predicted to become a significant consumer category in the future,” said Constellation Brands CEO Rob Sands in a statement. “Our company’s success is the result of our focus on identifying early-stage consumer trends, and this is another step in that direction.”

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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