Investment Bank Cowen just came out with a report on beer sales and it’s not intoxicating. Sales are way down and legalization of cannabis in the majority of states in the U.S. and full legalization in Canada last year are the likely culprits according to Vivien Azer, managing director at Cowen.
Azer in a report published in early January cited Nielsen data, which showed combined beer sales were flat for the four weeks ending on December 29, coming in just slightly above the 0.3% decline seen over the past 12 weeks. And the National Beer Wholesalers Association’s Purchasers’ Index registered at 47 for December, coming in below the reading of 55 from December 2017 and extending a four-month trend of readings below 50, indicating contraction in total beer orders placed with suppliers.
Based on a Cowen survey, beer was the most popular alcoholic beverage among current and former cannabis users, and 60% of current consumers cited a reduction in alcohol consumption when mixing the two products. And 70% of lapsed cannabis users – or those who had used cannabis in their lifetimes but were not current users – said they believed they would reduce their alcohol consumption if they returned to use, “suggesting there could be an even greater impact to alcohol consumption if and when lapsed users re-enter the category,” Azer said.
While only about 20% of consumers reported perfect substitution between cannabis and traditional alcoholic beverages, “What you’re really worried about is this marginal alcohol unit,” Azer said.
“Hypothetically you take a consumer that on a beer occasion would have three or four beers and then add cannabis to the mix, well now that’s one or two beers plus cannabis,” she added. “As we think ahead to 2019, we are increasingly cautious again on beer.”
Enter Sproutly Canada (CSE: SPR) who has burst on the scene with the first truly water-soluble cannabis that can be used in measured dosages and added to any drink for medicinal purposes or to alcohol and non-alcoholic beverages with none of the bad taste or harsh chemicals. CEO Keith Dolo explains his technology in the following video.