Cannabis legalisation has ‘no impact’ on spirits sales

10th January, 2019 by Amy Hopkins

US trade group the Distilled Spirits Council has hit out at “misinformation” about the impact of cannabis on alcohol, stating that legalisation of the drug’s recreational use has not affected spirits sales.

Recreational use of cannabis has not affected spirits sales, according to the Distilled Spirits Council

The organisation has released a new study that analyses the performance of spirits in the three US states where recreational marijuana use has been legal for the longest period of time: Colorado, Washington and Oregon.

The study examined per capita alcohol sales in each state for the two years prior to recreational marijuana legalisation and three-four years post-legalisation. Researchers used tax and actual shipment data to gain “the most accurate insight into what is happening in the marketplace”.

Spirits sales in each state were found to be “robust”, with no pattern of decline in any of the markets analysed.

In Colorado, spirits sales have grown by 7.6% since recreational marijuana use was legalised, Washington sales went up 5.4% and Oregon sales increased 3.6%.

Per capita spirits sales in each state were found to be flat, while per capita beer sales declined, but the Distilled Spirits Council claimed this reflects the national trend.

Cannibalisation concern

The study comes as the spirits industry increases its focus on cannabis, and expresses concerns over the potential of legalisation to cannibalise sales of alcoholic drinks.

David Ozgo, the Distilled Spirits Council’s chief economist, commented: “We did this study because there is a lot of misinformation circulating about the impact of recreational marijuana legalisation on distilled spirits and the wider alcohol market.”

Ten US states and the District of Columbia have legalised recreational marijuana use to date, while a number of others are considering the move. The Distilled Spirits Council has created a set of marijuana policy principles for such states to consider, arguing that cannabis should be “regulated just like alcohol”.

Distilled Spirits Council president and CEO Chris Swonger said: “If states contemplate marijuana legalisation, we urge lawmakers to ensure they fully consider comparable taxes and regulation, strong road safety measures and social responsibility standards when they examine the issue.”

Last year, Canada became the second nation, after Uruguay, to legalise recreational cannabis use at a national level. Luxembourg is set to become the first EU nation to legalise recreational use.

Market potential

A number of drinks firms have moved into the cannabis market in the past year.

US group Constellation Brands acquired a stake in Canadian cannabis producer Canopy Growth Corporation in 2017 and recently acquired an additional stake worth US$4 billion.

Southern Glazer’s, the largest wine and spirits distribution group in North America, created a subsidiary exclusively for the representation of cannabis products by Aphria in Canada.

Meanwhile, fellow distributor Breakthru Beverage Group formed an exclusive partnership with cannabis producer CannTrust and developed its own cannabis sales platform.

Other leading spirits firms, including Diageo, have been linked to reported cannabis deals.

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