Cannabis & Millennial Wine Consumption

Following the 2012 initiatives in Colorado and Washington that legalized the recreational use of marijuana, questions started to be asked around the wine business about the substitution effect of pot and wine. Even more interesting to me is to think through, why the wine industry would even ask the question?

The reason the question is being asked is everyone in the wine industry has been feeling uncomfortable with sales trends for some time, and we are all trying to pin down the root causes for the changes. Many have already concluded cannabis is hurting wine sales.

While I've avoided talking about cannabis in the Annual SVB State of the Industry Report up to this point, this year because of the trends I'm seeing, I felt it necessary to take this subject head-on.

You can sign up  [here]  to receive a link to the 2019 SVB Wine Industry Report and the live videocast which will take place on January 16th this year. But here are some of the thoughts I'll present on wine and weed within the report this year.

Wine Distributors: Legalized Pot vs Prohibition

 

Thirty-seven states have liberalized the 1970 Federal Controlled Substance Act with respect to marijuana use. Thirty-five now allow medical marijuana. Two states; Colorado and Washington have fully legalized recreational and medical marijuana use. Oregon, Alaska, and Washington D.C. are expected to do so in 2014.

 

Two weeks ago I spoke to a large group of high-level sales people and distributors. I enjoy talking to this particular group because I get real-time unfiltered intelligence from very experienced business people. Outside of all the expected discussion of supply, demand, sales tactics, competition, pricing and the like, there was a surprise discussion on the impact of legalized marijuana on wine sales.