In recent years, the rise of cannabis beverages has caused quite a stir in the alcohol industry. This tension has reached a boiling point with alcohol groups, like the Beer Institute, applauding measures to limit hemp-derived products, including those containing THC. But why this sudden urgency to curb a competitor? The answer lies in the profound impact cannabis is having on the alcohol market
Point: The Beer Institute's recent support for California Governor Gavin Newsom's crackdown on intoxicating hemp products is being touted as a move to protect public health and close regulatory loopholes. They argue that hemp products with THC are sold without adequate safety measures, posing potential risks to consumers.
Counterpoint: While the Beer Institute frames its stance as a matter of public safety, the underlying motivation appears to be a fear of losing market share. A Bloomberg Intelligence report highlights that marijuana legalization is forecasted to significantly impact the alcohol industry, with cannabis consumption expected to rise by 20 million people over the next five years. In contrast, alcohol is projected to lose a couple of million drinkers.
The Changing Tides of Consumer Preferences
There's no denying the shift in consumer behavior. More people are turning to cannabis as a preferred method of relaxation and socialization. Unlike alcohol, which is associated with numerous health risks and social harms—ranging from liver disease to drunk driving fatalities—cannabis is perceived as a safer alternative. Data from the U.S. National Alcohol Survey shows a stark contrast in secondhand harm between alcohol and cannabis, with 34.2% experiencing harm from alcohol use compared to just 5.5% from cannabis.
Benefits of Cannabis Over Alcohol
Health Considerations: Excessive alcohol consumption is responsible for approximately 178,000 deaths annually in the U.S., according to the CDC. Meanwhile, cannabis-related fatalities remain significantly lower, and emerging research suggests potential therapeutic benefits of cannabis use.
Lower Social Harm: Cannabis users report fewer instances of secondhand harm. Issues such as family disputes, financial difficulties, and physical altercations are more commonly linked to alcohol than cannabis.
Market Potential: Legal cannabis sales are projected to hit $37 billion by 2027 in the U.S., a figure that underscores the booming demand and investment potential in this emerging market.
A Call for Industry Collaboration
Rather than fighting the inevitable rise of cannabis, alcohol companies should consider joining forces with the cannabis industry. This collaboration could include developing hybrid products, investing in cannabis ventures, or merely supporting sensible
regulation that ensures consumer safety without stifling innovation.
A Generational Shift
The current pushback from alcohol industry lobbyists isn't just about safety or regulation; it's about resisting a generational shift in consumer preferences. Millennials and Gen Z consumers are more health-conscious and open to alternative forms of relaxation. They are driving the demand for cannabis beverages, and this trend shows no signs of slowing down.
The alcohol industry's attempt to slow the growth of cannabis beverages is a telling sign of cannabis's rising influence. Rather than stymieing progress, it would be more beneficial for all parties involved to support the cannabis movement and work together to create a diverse, responsible, and consumer-friendly market.
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