Cannabis pic 2 180x180 - Cannabis: How do you “cheers”?

The drinks industry is on edge about the encroachment of cannabis. Our CEO’s visit to the Bay Area’s cannabis scene – for research purposes only – suggests that wine doesn’t have much to worry about, at least not yet

An old investment mantra is that complacency is the enemy of profit. Management teams that think they are doing just fine with the status quo tend to be the ones that go bust; while the more successful management teams are the ones that are always worrying about opportunities and threats. If this is true, investors should be quite happy with the alcoholic drinks sector, where a growing cohort of drinks industry executives are tying themselves in knots about the looming opportunity / threat of cannabis.  

I reflected on this industry angst the other day, as I walked through a scruffy parking lot and entered a low rise converted office block in a less-than-shiny part of the Bay Area. This was my first experience of a Cannabis Dispensary in California, the epicenter of the revolution of legalized cannabis and cannabis-infused products. If I was looking for pleasurable experience on a Sunday lunchtime, it seemed like an odd place to be. It got even less buzzy as I was taken through a security screening and registration process at a front desk, before I was then permitted into the dispensary itself, which turned out to be a room with printed price lists showing what might be available to purchase and a counter where I could place an order.

Adjoining this room was a “Dab Bar”, technically an area in which customers can inhale cannabis concentrate through water pipes, and more broadly a sort of “on-premise” area for the consumption of all types of cannabis product – traditional smokable flowers, and edibles like gummies or cannabis beverages. The room looked about as far from a bar as I could imagine – think a tired looking office with grey carpet and non-descript furniture – and was occupied at noon on a Sunday by just 2 solo customers, sitting at opposite sides of the room from one another, both grimly focused on getting high.

Wine Intelligence’s tracking data of cannabis usage among US wine consumers suggests that, for the moment, the dispensary visit is a lot less common than buying wine in a store or bar. So far 16% of monthly wine drinkers in the US say they are using cannabis products, rising to 23% among 21-34 year olds. Around 7% of monthly wine drinkers say they’re drinking less wine because they have switched to cannabis.

The more exciting (or alarming) data point is that 43% of US monthly wine drinkers say they would likely buy a cannabis infused wine if it was available. This intent to purchase is significantly ahead of Biodynamic wine (32%), lower alcohol wine (31%), and not far behind Organic wine (52%) for the same population.

My visit to another Dab Bar, in a slightly less scruffy neighbourhood and at 5pm on a Thursday, revealed more of a crowd, and in a much more upbeat environment. In the next room, there was a big crowd waiting to buy product to take home. “We get a line around the block on a Friday,” one staff member told me, “people who are stocking up for the weekend at home and don’t have a dispensary nearby”.

In between my dispensary visits, I ran some focus groups in the Bay Area to find out from consumers of cannabis (and alcoholic beverages) how they were responding. The first thing to note is that mention of cannabis in a discussion group still provokes a bit of embarrassed seat-shifting and giggles – even in the heart of liberal California. Once over their social angst, the group (who were all recruited as cannabis users or non-rejectors) opened up on why they use cannabis. The story so far from these consumers: some experiments, a few mistakes with product that didn’t turn out to be very pleasant (mainly beer), an aversion to smoking, and general happiness with edibles such as gummies (soft chewy sweets) which allow much better portion control.

One theme that we touched on, but that I would like to explore more in our future research, was the tendency to mix cannabis products with other stimulants (mainly alcohol). The habit seems to be to have beers, wine, hard seltzer, plus CBD (non-psychoactive cannabis extract) and/or THC (the psychoactive part of cannabis) all in the same session. This session might start in front of a sports game on TV and end up with a meal with friends. I was reminded of this the following day, when a friendly Dispensary staff member told me when recommending a particular brand of THC gummies, “this one goes very well with a glass of white wine.”

This is probably the most extraordinary time to be working in the drinks sector. Wherever you look there is so much disruption, so many opportunities, so much at stake. However, what I would say to fretful industry executives losing sleep over the cannabis threat: remember that at the end of the day, people’s pleasure habits are long-standing, and hard to change. If you deliver the same thing (a great movie) via a more convenient method (streaming onto an iPad rather than trudging down to the video shop) then fair enough. However if you are offering mild mind alteration without a convivial atmosphere, a sense of betterment, or even a sensible way of saying “cheers”, then it’s hard to see how cannabis is going to be to your sector what Netflix was to Blockbuster.

 

Lulie 2 250x300 - Cannabis: How do you “cheers”?Author: Lulie Halstead

Email: Lulie@wineintelligence.com

 

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