Three Tiers for Cannabis!

Despite still being classified as a Schedule I drug under federal law, the cannabis we know and love that is associated with psychoactive effects (> 0.3% THC) is continuing its cross-country ascent as states like Illinois move to legalize its recreational sales.

And it seems like this industry's boom has finally created a flywheel. Why?:

• Consumers are educating themselves: Google searches for cannabis-related terms are through the roof (ex. Searches for "CBD" is up 4x vs. November 2015)
• Cannabis stigma is fading: Surveys show consumers increasingly identifying cannabis as a wellness product (ex. 52% stopping OTC treatments through use)
• You booze, you lose: And... consumers are drinking less because of the availability of cannabis products (ex. 52% reduced alcohol or 7% stopped alcohol consumption via cannabis substitutes). 

The sun is shining. The birds are chirping. The business of green surely is green. But wait--do we really want to say bye to wine and its foothold in our cultural identities? To make things worse: IWSR took the internet by storm last week with its announcement that wine consumption had dropped for the first time in 25 years. 

While I can make do in a world without the American tradition of macrobrewed patriotism, I want the wine industry to fight on, and I'd love to see that happen through allying with or making early claims in the cannabis industry.

Foremost, many envision that cannabis will scale out via a three-tier system as modeled by the broader alcohol industry. In December the Wine & Spirits Wholesalers of America (WSWA) proposed as much to members of Congress. As both alcohol and cannabis are intoxicants, the adoption of the three-tier system makes sense from both a public health perspective as well as a profitability standpoint for existing wine wholesalers. Because of its experience in this system, the wine industry could help scale out cannabis sales while directly profiting through its aid.

Boomers say "OK!" to cannabis (Source)

Additionally, the demographics that the IWSR reports are dwindling in wine consumption appear to be those who are increasingly consuming cannabis. For example while boomers are drinking less wine, they have concurrently become the fastest growing segment in cannabis (+25% YoY), as well as the highest spending ($95.04/mo). Moreover, millennials are drinking less wine while they continue to be the largest segment in cannabis.

Even better: the population of female cannabis consumers doubled YoY in 2018, now representing 38% of the US market. With females representing up to 59% of US wine drinkers, this is a valuable segment for the wine industry to monitor.

With all this in mind, the wine industry would be wise to stake a claim in the growing cannabis space if only to hone in on its distributive strengths as well as retain its customers with the products they are increasingly interested in. Cheers to cannabis over cannibalization!