Continuing our discussion from the earlier part of this series, what if the sales decline in beer isn’t caused by marijuana legalization? That would mean that consumer trends are shifting. They can be driven by several factors. If declining alcohol sales are short-term, then there wouldn’t be much to worry about for alcoholic beverage companies. However, if it’s a permanent shift in trends, then it would be a real concern. Over the years, consumers have shifted away from consuming tobacco, which has led tobacco companies to look for alternatives such as vapes or e-cigarette and partnering with cannabis companies such as Cronos Group (CRON).
Trend shift not caused by marijuana
So, if consumers aren’t substituting beer with marijuana, then the premise for beverage companies partnering with cannabis companies weakens somewhat. I say “somewhat” because there’s a possibility that consumers may be willing to try cannabis-infused drinks. For example, AB InBev’s CEO mentioned that the State of Colorado has experienced an increase in tourism in 2016 of 15%, which was specific to the marijuana industry. But he added that collecting data in regards to the shift has been difficult.
Time will tell whether the cannabis industry will be a catalyst for alcohol and tobacco companies. However, as we proceed with caution, the cannabis industry (HMMJ) continues to consolidate, and companies Tilray (TLRY), Canopy Growth (WEED), Aphria (APHA), and Aurora Cannabis (ACB) are growing their footprints.