Teens Trade Beer For Pot

Over the holidays Cowen Inc., an American investment leader, released a report with data indicating that school children are changing how they choose to get high.

And the New York-headquartered investment company is suggesting that this transition is and will affect the beer industry negatively going forward…

Data shows that schoolchildren in eighth, tenth and twelfth grades are continuing to make trade-offs between cannabis and alcohol and as Cowen financial analyst  Vivien Azer noted “increasingly shifting away from legacy consumption offerings,”

Why Cowen’s report cited data from schoolchildren in eighth, tenth and twelfth grades, for investment advice on beer and cigarette companies is a separate and no doubt concerning discussion… But that’s what they did.

In a report published Friday, Azer cited Nielsen data, which showed that 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.

The impact of the widespread legalization of recreational cannabis on the beer industry is a concerning issue for the drinks biz giving consumers a new vice to consider.

In a Cowen sector survey released in January 2019, 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 according to Yahoo Finance, “What you’re really worried about is this marginal alcohol unit,” Azer said.

“Given the declines in youth incidence of alcohol, the shifts in underlying sub-category trends will ultimately be increasingly important,” Azer said, noting that “pockets of beer, including imports, continue to expand at healthy rates.”

“In comparing social lubricants, alcohol incidence remains on the decline and at record lows,” wrote the Cowen analysts, adding that “teenage cannabis consumption has interestingly remained fairly steady.”

Cowen projects that the growing recreational cannabis industry was worth $50 billion in 2018 and could reach $75 billion by 2030.

(Pot Beer Image Credit: Mitchell Maglio)