Marijuana legalization Part 2

MARY REICHARD, HOST: Today is Thursday, August 9th. Thank you for turning to WORLD Radio to help start your day. Good morning. I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher.

Last week we told you about WORLD’s investigation into the nationwide push to legalize marijuana. The first installment in the series provided a broad overview of the corporate players wanting a slice of the “Pot Pie.”

Today we’ll talk about the alcohol industry in the United States, which has big plans to enter the marijuana market. That’s the subject of the second story in our series, out now in the latest issue of WORLD magazine.

Jim Long heads up our investigative team, the Caleb Team. Jim, good morning.

JIM LONG, REPORTER: Good morning!

EICHER: Jim, your team’s done a great job in framing up the cleverly named “Green Rush.” The rush of corporate America to position themselves for what seems a political inevitability: the legalization of so-called recreational marijuana.

And in particular, your most recent report talks about the wine, beer, and distilled spirits companies lining up to get their share.

Jim, talk about who the players are here in the United States.

LONG: Sure, Nick. There are really three types of players: The big brewing distribution companies like Molson-Coors, which of course has U.S. and Canadian ties. And then, too, there would be the Canadian pot producers. Companies like Canopy Growth Corporation, they’re a big medical marijuana supplier. They had over $40 million in revenue last year. And then the third player would be small craft beer targets like Lagunitas Brewing Company based out of Petaluma, California.

EICHER: How are they entering the market?

LONG: Yeah, the first thing to say about the market is that in the United States it’s a grey market. Grey in the sense that there’s still conflict between federal law and state law. So, because of that, they’re doing it two ways. 1) Through the great white north, through Canada. So that’s where you have companies such as Molson-Coors and Constellation Brands, that’s the company that markets for instance Corona beer inside the United States. Those two companies, they’re either in negotiations or made outright acquisitions with Canadian pot-producing entities.

And then the second way that big alcohol is moving into the market is in the United States in those states where marijuana has been made legal for recreational use. And the new euphemism, by the way, that is bantered about in this new industry is called the “adult” use, but that’s where you have a company like the Dutch brewer Heineken. Heineken actually initially bought a 50 percent stake in Lagunitas Brewing Company in California, which was kind of a notorious brewing company that was known to be very pot-friendly.

So, Heineken then last year finished that deal by buying the company outright in California where now it is approved for a “adult” use of marijuana.  

EICHER: Paint the picture for us. What kind of future do we have where these two intoxicants are merged, or will they be?

LONG: Yeah, that’s an important distinction to make. First of all, it looks like initially there will not be an infusion of both intoxicants—those being THC, which is the psychoactive ingredient in cannabis, and alcohol. It looks like states aren’t going to allow that. It looks like big alcohol recognizes that that’s a social and PR liability they’re not willing to take on at this point. Nor are they willing to dilute their own brands by creating necessarily a parallel alcohol brand and a THC brand to compete with themselves.

What we are seeing, though, and I think the best model to kind of get some sort of insight or forecast into how it’s going to be rolled out is if you look at Heineken and you look at what they’ve done with Lagunitas Brewing. What they first did is they came out with what they called a marijuana or cannabis-infused beer. But it did not have THC, it had no intoxicating effects other than the alcohol itself. So, it was not a dual ingredient.

Then, they came out recently with a THC-infused water. A seltzer water that also had hops in it. So it had hops to give it a beer flavor, it had THC to give you the intoxication, it did not have alcohol, so it didn’t have dual intoxication, and they did not call it beer. It tasted like beer, but they called it water. So, you can kind of see how I think they are—and no pun intended—testing the waters with their marketing rollout.

EICHER: What are some concerns, risks, and challenges you see associated with this development?

LONG: Well, as I mentioned last week, one of the concerns would be just that double intoxicants. Because even if THC is not infused in an alcohol product, you still have some studies suggesting, and in fact it may have actually served as encouragement to big alcohol, suggesting that the use of marijuana actually increases the use of alcohol at the same time. So, you have the potential dual use of both drugs. That’s a big concern with people getting behind the wheel. And that leads to the other concern, which would be health risk.

One problem with marijuana being decriminalized for so long is that there is just a great dearth of long-term research to help us understand what are the long-term effects on the human body when you have not only the intoxicant of THC being consumed, but you have on top of that the use of alcohol. And so that’s why we have even now controversies.

For instance, last week we talked about big pharma looking at medical marijuana as a competitor for the pain relief market. And there were studies being cited by the pro-marijuana market showing a reduction in opiate overdose mortality rates. But at the same time you also have studies like those published by the National Institutes for Drug Abuse showing that people who use, smoke marijuana are 2.2 times more likely to develop an opioid addiction.

So, we just simply don’t have the long-term sampling frames and research studies to tell us what we’re getting ourself into as a nation by releasing yet one more category of intoxicants on the public.

EICHER: Reporter Jim Long is a lawyer, recently retired from the FBI, and he heads up WORLD’s Caleb Team, our team of investigative reporters. Good work, Jim. Thanks!

LONG: Thank you, sir!

(Photo illustration/Krieg Barrie)

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