Heirs To Alcohol Fortunes Turn Their Attention To Weed
Adolphus Busch V—who in addition to having one hell of a name is also the great-great-grandson of the founder of Anheuser-Busch—isn't betting on beer. Instead, the New York Post reports, he's putting his bucks behind legal weed with a new marijuana vape-pen company called ABV Cannabis. And he's not the only one: Heir to the Jim Beam jackpot, Ben Kovler, recently took his cannabis company public in Canada. So why are these alcohol successors ditching booze for bud?
Because the alcohol industry is freaked out by the threat of legalized recreational marijuana. Recreational pot has only recently been legalized—and in a piecemeal, state-by-state way—so it's hard to analyze its overall impact on beer and other alcohol sales. (Notably, packaged craft beer sales in Oregon slowed after recreational marijuana was legalized there, though it's debatable whether that's correlation or causation.) Legal weed is certainly considered enough of a threat, though, that major players in the beer industry are covering their bases with investments in marijuana. The latest move comes from Molson Coors, which announced in early August that it would form a partnership with a cannabis company to create non-alcoholic cannabis beverages in Canada.
"The decision we had to make was: do we want to be a spectator or a participant?" Molson Coors chief executive Mark Hunter told analysts on a call following the announcement.
Whether legal weed is to blame for beer's sluggish overall sales is unclear. But the reality of Americans' lagging consumption of beer combined with the growth in the marijuana industry make cannabis an attractive draw for those concerned about the beer industry's overall health. A 2015 McKinsey & Company consulting report, damningly titled "A perfect storm brewing in the global beer business," outlines some of the challenges facing major beer companies which have led to stalled sales: "In the U.S., beer's largest market, production volumes stagnated between 2007 and 2014. In other key markets such as Germany, France and the UK, they fell by roughly 10 percent over the same period." People just aren't drinking as much beer as they used to.
Meanwhile, marijuana looks like a bright and rising industry. It's understandable that even entrepreneurs from legacy beer-brewing families would hedge their bets with investments in a cannabis industry that could only expand as more states move to legal the substance. Not that it doesn't sting a little, though, on a personal level; Adolphus Busch V told the New York Post his family initially "wasn't interested" in his new venture. Eventually though, even they came around: "Now they see the potential."