Gen X, Cannabis, Millennials and the Future of Wine

Cannabis may be a more important headwind (among many) to wine adoption

Damn youngsters!!

“We’ve been calling for seven years now for cannabis to increasingly prove as a dislocator to alcohol sales—and, really, it’s just a matter of time,” she said. However, she said it was “a little surprising” to see data projecting an even greater underperformance for alcohol sales in legal marijuana states.”
—Vivien Azer, TD Cowen

Just to be clear what Ms. Azer is saying, in states that have legalized recreational cannabis use, sales of alcohol have declined significantly more than in states that have not legalized the weed’s sale.

Moreover, the investment bank, which follows the cannabis market to advise clients with big money to invest, also forecasts that “over the next 5 years, the cannabis category will add 18 million past-month consumers, while alcohol will lose 2 million past-month consumers, as consumers increasingly embrace cannabis and temper their alcohol consumption.”

Cannabis use is much more prevalent among younger Americans, the same folks the wine industry has been beaten over the brow of late to engage with. The tale is that younger consumers, particularly younger millennials, are detached from wine as they indulge in other alcoholic beverages or are avoiding alcohol altogether.

What has not been acknowledged enough by those worried about the future of wine is a migration from alcohol (including wine) to cannabis. In the past, going back a decade, I’ve warned that legalized cannabis will suck customers away from wine. It has. We just don’t know to what extent. What seems most likely is not that those consumers who choose to use cannabis abandon wine altogether, but rather drink less wine when they consume cannabis. How much of the decline of wine can be attributed to increased cannabis use that comes with the increasing pace of cannabis legalization?