Weed through distributors is likely just a smoke screen!
As the battle over marijuana heats up in various legislative bodies there are a lot of articles written about how weed will just be another product carried by adult beverage distributors to great success. Those same blogs and articles talk about the windfall that the industry will receive as it is the only system setup to properly regulate such distribution at this time.
I am telling you, I am calling bull malarkey on that statement. Mark your calendars and look back on this piece in a few years. My official position is that I do not care if weed is legalized or not, that is not my argument, and not my flight. My argument is that weed sales will hurt the commodity beer market as consumers are forced to make choices.
You see, when you are a generalist, from a flavor profile, you can be replaced. When you are a specialty beer or spirit, you cannot as you are a “called” brand. The consumer will make a choice whether to use marijuana or drink a beer. The consumer will also make a choice whether to drink a craft beer or cocktail or to use marijuana, I believe that choice is harder and frankly more of a separatist choice. It is either one or the other, not both! Physically and mentally that is a lot on the body.
During a session-able occasion, we choose a method to celebrate, and if we choose one method it is often hard to choose another, and even more difficult to choose both. That said, being a “light beer” for instance, is not as distinguishable as being an IPA and therefore replaceable. Being a Vodka is not as distinguishable as being a PauiMaui Vodka, for instance, and thus less memorable.
All my peers in state government, or at distributors who are touting the ability of the three tier system to be the best option to successfully sell and deliver marijuana, should really look at the deep end before jumping into this pool. It is my feeling that you will not be adding sales but rather trading sales. The retailer will have the same issue. If the consumer has only so much disposable income to spend on purchases, what will they buy? And what will they not purchase given a fixed dollar amount to spend?
Now I realize that all of this is off in the distance but not really that far off. As of today, beer distributors/liquor distributors cannot sell or carry pot, and retailers cannot sell pot, but there will be a day for sure, and something will give in order for this to be a successful selling venture.
Distributors are all lobbying their states for early adopter licenses. Large pharmacies like Walmart, CVS and the like are all quietly positioning themselves for a day when they can double as dispensaries. When you look at what is happening in California, Nevada and Colorado, the success stories and the revenue, none of those dispensaries carry anything else aside from the controlled substance.
This is a similar story that played out with craft beverages and why there is a wave of consolidations and closings. We are not creating a new consumer but rather trading the consumer. So the same consumer that was buying a bottle of beer is now buying a roll up and thus trading dollars.
When Marijuana becomes legal, and I believe it will, the commodity/everyday adult beverage category will be the category that will remain flat to down while the higher end, more “crafty” products will remain ‘high’.
Expert Editorial
by Brian Rosen, Rosen Retail Method
Brian Rosen is Former CEO of America’s #1 Retailer, Sam’s Wines in Chicago, Former Partner at PricewaterhouseCoopers in Retail and sought after retailer consultant.
He can be reached at @roseretail or brian@briandrosen.com
