Pot in the bottle
Big Alcohol is adding a new ingredient—marijuana—to its moneymaking brew
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Second in a series on the legalization of marijuana
Three major beer sellers with familiar labels—Heineken, Corona, and Coors—are blazing the path to marijuana-infused alcohol. How they got to this point is a story of marketing maximizing, whatever the social effects.
By 2015, U.S. alcohol sales had dropped 15 percent in states (most of the country) that had legalized marijuana for medical use. That’s according to a study conducted from 2006 to 2015 by researchers from the University of Connecticut, Georgia State University, and Universidad del Pacifico.
This may explain why in 2016 the Wine & Spirits Wholesalers of America (WSWA), a Big Alcohol lobbyist, expressed concern about marijuana-impaired drivers in those states. While claiming to be “neutral on the issue of legalization,” WSWA placed a paid ad in the political newsletter Huddle advising that states legalizing marijuana “need to ensure appropriate and effective regulations are enacted to protect the public from the dangers associated with the abuse and misuse of marijuana.”
WSWA reported, “In the years since the state legalized medicinal use, Colorado law enforcement officials have documented a significant increase in traffic fatalities in which drivers tested positive for marijuana.” Huddle is widely read in congressional offices, so here the WSWA punch line was a demand that Congress fund procedures to “document the prevalence of marijuana impaired driving, outline impairment standards and determine driving impairment detection methods.”
Beer companies were looking to the future, and Heineken International purchased a 50 percent stake in the Lagunitas Brewing Co., located in Petaluma, Calif., and known for its marijuana references in marketing and even accounting (ending its inventory numbers with “420,” a common pot reference to getting high at 4:20 p.m.). But much of Big Alcohol subtly fought marijuana usage throughout 2016—until California’s legalization of marijuana via Prop 64 in November suggested the future was arriving faster than expected (see “The Green Rush begins,” Aug. 4).
A Gallup poll last year reported that almost 2 out of 3 Americans approved of legalizing pot—a fivefold increase since Gallup first started tracking the topic after 1969’s Woodstock event. Big Alcohol’s response to this change: Can’t beat ’em, let’s join ’em. The “buds or suds” answer may now be: both. The Guardian reported how the Bernstein investment firm in 2017 found that “in states where medical marijuana is legal, beer consumption was down 0.6 percent on average in the three years leading up to legalization but rose 0.1 percent in the three years after.”
Heineken last year bought the other half of Lagunitas, a company reportedly worth $1 billion. That summer, Lagunitas rolled out its first beer infused with marijuana—but without THC, the particular chemical that leads to highs—in an India pale ale beer named “Supercritical.”
Heineken publicly played it both ways concerning its intent to enter the marijuana market. When a Bloomberg TV interviewer asked CFO Laurence Debroux in February whether Heineken would invest in marijuana, she said, “No,” then added, “It’s a situation that of course we’re looking at.”
Looking at? On July 30 Lagunitas debuted “Hi-Fi Hops,” a THC- and hops-infused “IPA-inspired” sparkling water. So: first a “beer” without THC, but with marijuana; now a “water” with THC and hops, but not a “beer.” Clever: By purchasing Lagunitas, a smaller craft beer and THC-friendly brewer, Heineken has avoided direct competition with its big brand labels, while benefiting from test brewing and marketing and gauging political feedback. (California claims it won’t allow pure pot and alcohol to mix.)
Constellation Brands, the U.S. seller of Corona, Modelo, and Svedka vodka, has been less coy. It made a major move into the marijuana market last October by spending $191 million to acquire a minority interest in Canada’s largest marijuana company, Canopy Growth. Constellation CEO Rob Sands said, “Our company’s success is the result of our focus on identifying early stage consumer trends, and this is another step in that direction.”
Sands is watching more than the Great White North. After Lagunitas announced its Hi-Fi Hops, he said Constellation was “pretty interested” in what the California company was doing, and how it was doing it. Last year Sands pledged to hold off entry into the U.S. marijuana market until national legalization, but in a June 29 earnings call with investors he seemed eager: “If we see that opportunity within the confines of what we can legally do, we will do it.”
Constellation’s rival, Molson Coors, also seems ready to jump in. Its CEO, Mark Hunter, told investors in June, “We have assembled a team in Canada to actively explore the risks and opportunities of entering the cannabis space in that market, where it will be federally legal by this fall [Oct. 17].” Molson Coors has talked with two big Canadian pot producers, Aphria and Aurora Cannabis, about how to “collaborate on future cannabis-infused beverages,” according to BNN Bloomberg.
Those Canadian moves will also help the big companies learn about potential U.S. markets. A Deloitte study published in June found that 6 out of 10 consumers in the legalized marijuana market would probably choose to consume edible products. Although edibles (including drinkables) won’t be allowed immediately in Canada, Big Alcohol there will have product testing, manufacturing, and distribution centers in place to ensure big splashes in markets when they open. Their drinkables will include THC-infused soda, spirits, wine, coffee, iced tea, juices, and sports drinks.
Big Alcohol is probably keeping tabs on related cottage industries. Ebbu LLC, which proclaims its goal of “mainstreaming adult-use cannabis, powering infused products and disrupting technology through a patented, lab-tested and science-based platform,” now makes 5-milligram THC drops to add to drinks. It claims the drops will make people high within five to 15 minutes and will last for 90. (Another innovation, Dro-tein, is for those who love working out high and using cannabis, especially CBD, for post-workout anti-inflammatory and pain relief).
Infusing THC into familiar products is likely to escalate marijuana’s social normalization. Having the psychoactive component of marijuana invisibly suspended in a conventional liquid and container—like a can of beer or champagne glass—will separate pot use from the negatives of skunk smell, cotton mouth, and coughing tied to traditional reefer smoking.
Pot advocates imagine a day when cannabis cocktails will be expected at most parties. High Times looks forward to highs “felt by the user at 5-30 minutes and [lasting] between 2-4 hours.” What about after the party? How much THC is too much to impair driving? California explicitly defines 0.08 percent blood content (by weight) for alcohol but offers no guidance for THC users who must determine if they are “under the influence.”
Other states that have legalized recreational marijuana do have standards. Colorado’s DUI law sets the legal limit for active THC in a driver’s system at 5 nanograms per milliliter of blood. The state of Washington has the same limit and also places a possession limit of 72 ounces on liquid edibles, with no more than 7 grams of THC concentrates.
Big Alcohol companies will try to sell the right buzz without attracting the fuzz. They’ll also be competing with Big Tobacco and Big Pharma, and using lobbying and donations to influence Big Politics. More about this in future WORLD stories.
Thinking Biblically about recreational marijuana
As the movement to legalize marijuana for recreational use gains momentum, we are asking evangelical theologians and pastors to discuss cannabis use not in relation to the law, but in relation to Christian faithfulness. Here are thoughts from Albert Mohler, president of the Southern Baptist Theological Seminary:
The sole purpose of using “recreational” marijuana is to achieve an altered state of consciousness. The Christian reflex should be to avoid any attempt to alter consciousness, and specifically any effort to achieve a form of intoxication. To put the matter bluntly, the last thing the Christian church needs is for more believers to be less alert and sober-minded.
We also know that the recreational use of cannabis is particularly dangerous for teenagers and young adults. The medical research is clear: Exposure to marijuana damages the brains of young people, particularly adolescents. It is hard to take seriously claims that children and teenagers will not be put at greater risk by legalizing marijuana.
Not long ago, a group of collegiate Christians and I discussed marijuana use. The students were very thoughtful, and their sincere trust in Christ was evident. Several admitted trying marijuana while on a trip to a state where it was legal. I asked if they felt that what they had done was wrong. One student said, “I think it was wrong, but I need a good argument for why it was wrong.”
I asked this: “If a student came up to you after you used marijuana, would you really be able to fulfill the mandate of 1 Peter 3:15, to be ready to give an answer for the hope that is in you?” Looking back to his experiment with marijuana, the student answered honestly, “I don’t think so. Not then, anyway.” Being sober-minded means more than being sober, but it certainly does not mean less.
The Bible is abundantly clear that drunkenness is a sin and a pathetic distortion of the image of God. We can make no credible claim that the use of marijuana is exempt from this Biblical admonition.
Pot players: Pro-marijuana groups
National Cannabis Industry Association National trade association with 1,530+ members and the goal of legalizing cannabis throughout the United States and reforming “unfair” banking and tax laws.
Marijuana Policy Project Nonprofit with 40,000-plus members that focuses on legalizing marijuana, establishing shorter sentences for people convicted of marijuana crimes, and financially supporting pro-pot political candidates.
National Organization for the Reform of Marijuana Laws Nonprofit that receives tax-deductible contributions and boasts 150-plus chapters. Founded in 1970 with help from Playboy’s Hugh Hefner, NORML maintains a committee of criminal defense lawyers and led efforts to decriminalize minor marijuana offenses in 11 states.
New Federalism Fund Lobbyist group that wants the federal government to adopt a laissez faire approach to marijuana, promote state-based regulation, remove cannabis from the Controlled Substances Act, and get rid of tax rules that block cannabis businesses from using the tax deductions other businesses get.
American Trade Association for Cannabis and Hemp ATACH promotes businesses in the legal marijuana and hemp trade, with the goal of moving the cannabis industry into mainstream culture. In 2016, Campaigns & Elections magazine named ATACH the “Corporate Grassroots Organization of the Year.”
Drug Policy Alliance Nonprofit that receives tax-deductible contributions to support its attempts to end the War on Drugs, combat drug overdoses, and encourage more conversations between kids, parents, and teachers. The alliance, which supports marijuana legalization, has received money from the ACLU and billionaire George Soros, and last year reported $40,412,322 in total assets.
Americans for Safe Access ASA advocates legal access to medical cannabis and claims 100,000-plus members in all 50 states. It sued the federal government to remove cannabis from a Schedule I classification under the Controlled Substances Act, but the U.S. Court of Appeals for the District of Columbia said no, since there are not “adequate and well-controlled studies.”
Law Enforcement Action Partnership LEAP wants to improve police-community relations, find alternatives to incarceration, make adult drug use a “public health problem and not a law enforcement matter,” and release nonviolent drug offenders and expunge their records.
Weedmaps Website and app that reviews marijuana dispensaries and uses location tracking to find a user’s nearest dispensaries. Weedmaps has been criticized for hosting fraudulent reviews, advertising illegal dispensaries, and placing billboard ads too close to schools. In 2011 it bought the domain name Marijuana.com for $4.2 million. —Harvest Prude
Change is in the air. Carpinteria, Calif., was once famous for its cut flower industry. That industry suffered as the United States allowed in flowers from Central and South America. Many of Carpinteria’s decrepit greenhouses now have a new use: growing legal pot. Some neighbors aren’t thrilled with the skunky odors that settle over the coastal town when pot plants are in bloom. Some residents told the Santa Barbara Independent the town sometimes smells like a new litter of skunks.
Concern about marijuana’s odor keeps most mainstream hotels from being pot-friendly, but some in California, plus a new chain of 200 Massachusetts establishments, hope to attract marijuana tourists. The Boston Globe reported that the 420 Suites chain offers hemp-infused shampoos, CBD-laced lozenges, and discount coupons (and transportation) to the local dispensary. The chain’s CEO told the Globe that it was a way to “get into a niche market, … disassociate the stigma a bit and make the process less intimidating.”
Stench and stigma go hand in hand, unless you’re talking high-end perfume. In England, 260 stores of the Perfume Shop chain sell “Carolina Herrera 212 VIP Men Party Fever,” a long name for a cannabis-themed scent aimed at men. The retailer’s spokesperson told The Telegraph that the perfume has “an elegant, refined summer scent that opens with a spicy energy then mellows with a herbaceous cannabis accord in the heart, giving the fragrance, and the man wearing it, an edge of risk.”
U.S. marijuana companies that do not want to live on the edge of risk find banking difficult, since federal illegality bars most banks from providing service. Most California pot businesses operate on a cash basis. One San Diego retailer told marijuana website Leafly that he pays his taxes by hand-delivering cash to the San Diego City Hall: “On drop-off day, there are armed guards there from the [California Highway Patrol].”
Alan Rogalski, a Detroit-area lawyer who specializes in advising marijuana businesses, described the problem earlier this year to Crain’s Detroit Business: “They are going to have to walk into the treasury with a bag full of dimes; it’s onerous … the equivalent of a Brinks truck, two guys with Glocks on their hips and ex-military personnel walking in bags of large deposits for taxes into the treasury.”
Rogalski thinks the seediness of those scenes will eventually contribute to changing the federal law: “Revenue is generated, taxable revenue, and certainly the IRS expects to be paid taxes, so that’s going to change and I think it’s going to change in the next 12 months.”
The “change” that seems to be coming could lead to increased demand for rehab facilities like High Sobriety, a center formerly in Los Angeles that allowed residents to smoke as much weed as they want while detoxing from other drugs. New management wasn’t impressed at the cloud of smoke that hung over the facility and the “patients that were high for a majority of the day.” The center has moved to San Francisco. —Susan Olasky
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